I apologize, but I’m going to get a little more technical and dry than usual. I’m putting my fun and creative marketing hat on the shelf for a minute (thought it is my favorite hat to wear) to address an issue about social media that I get asked again and again:
“How do I measure the ROI for my social media campaign?”
ROI, or the return on investment, is a very basic business calculation. Often used to measure the value of investment, or the return, that can be generated and given back to the original investor or business. Companies have been measuring ROI for marketing campaigns for decades, so the answer to the above questions isn’t tricky…it’s the same as it’s always been!
ROI = (gain from investment – cost of investment) / cost of investment
ROI can be measured for any business division, whether it be stocks, equipment, personnel or social media. Though some might disagree, I strongly believe that social media falls under the marketing category of a business. Therefore, treat it as if it’s any other marketing investment, such as print advertising, public relations, TV commercials, etc. Just because the medium has changed to social media does not mean the measurement for ROI has changed! There is no new formula, so just stick with what you know.
The only thing that changes when looking at social media is that dollars is not usually the measurement. Think more in terms of Twitter followers, number of retweets, Facebook fans, etc. Just be sure to be consistent throughout the equation. By that I mean your “gain” and your “cost” of the investment must be of the same measurement (Twitter followers) or else confusion will abound!
It is important to know and understand the ROI of social media efforts, especially if your campaign is new and is still finding its footing. Various ROI measurements from different social media outlets will direct your business where to spend valuable resources. So, don’t be afraid or intimidated by the social media ROI…embrace it and use it to your advantage!
- Remind me why you’re doing social media again? (adigaskell.org)
- Only 1 in 10 Brands in the UK measure Social media ROI, says study (c24.co.uk)
- The ROI of Pinterest: 5 Must-Reads (firebellymarketing.com)