What is the ROI of Social Media?

If I had a dollar for every time I heard or read the question, “What is the ROI of Social Media?”, well, i’d be rich.

The ROI of social media is with out a doubt one of the most common questions asked by executives, in particular when you might be attempting to “sell” a social media program or the “need”, to them. It indeed can be a tough sell. I am fortunate enough to have a boss who see’s the value and has given the reigns to me to grow our presence, which has enabled me the flexibility for the company to become the leader in social media within our space.

For those not as fortunate as me, you might find yourself trying to analyze numbers and put down into some magical formula a “dollar value” that can be attributed to a FaceBook fan or Twitter follower etc. It’s not easy, I have attempted the same myself. Being within the retail industry, we can track traffic from FaceBook and Twitter through to a conversion on our site using general traffic source data from Google Analytics, or to be more specific using Google UTM tracking tags. This records quite well a click to sale metric, but fails to record any fans that convert at a later date after seeing something on the social media presence.

The truth is that social media isn’t just about selling, its about building an experience for your customers, whereby they can learn to love your brand and engage with you on a whole different level that by phone or email. But how do you measure that? Answer. You can’t.

You can however, measure engagement, Likes, Follows, Tweets, Comments, Shares etc etc. Again these aren’t necessarily going to convert to a sale directly, but there’s know doubt that they will have an influence on a buying decision when the time comes.

Over the past month or so, i’ve heard a couple of quotes by online marketing professionals pertaining to the ROI of social media, that sum up the topic rather well.

Gary Vaynerchuck (@garyvee) answered the question “What is the ROI of Social Media?” with another question, “What is the ROI of your mom?”. While you may chuckle, he’s right. How could you attribute a monetary value to the role your mom plays in your life?

Paul Castain (@paulcastain) has a different take on the question. “What is the ROI of Social Media?”. “The ROI of Social Media is that your company will still be in business in 5 years time”. I love this, Paul is implying that social media is at the forefront of the marketing field right now and if you don’t get on board you are going to fall behind your competition and eventually disappear. I totally agree.

What’s your take on the ROI of social media? How would you answer the question?

Related Posts:

About Sam Beamond

Sam Beamond is President of Beamond Creative, LLC and writes on Internet Marketing topics for the DDIN Journal. He is presently employed by Dennis Kirk as Internet Marketing Manager and founded the LinkedIn group, "Internet Marketing Source".

  • http://yoursalesplaybook.com paulcastain

    Thank you so much for the mention Sam.

    I really cant comprehend why companies continue to push back on Social Media because they are waiting to get clarity on ROI.

    To me, its a very simple decision . . . It doesn’t matter if I “get” social media or not. My customer and potential customers don’t care, nor should they.

    They care that I show up where they wish to engage me.

    If I don’t and my competitor does . . . what’s the ROI on ignoring?

    Thanks again Sam . . . very kind of you!

    Respectfully,
    Paul Castain

  • http://www.internetmarketingsource.net Sam Beamond

    Yes, Paul, I couldn’t agree more. Like you said, plain and simple. Its not a case of ROI, its a case of keeping with the times, meeting your customers where they are at and ensuring that you’re in business in the next 5 years.

  • Doshanif

    Hi Sam..

    Ni post. I’m a librarian from Malaysia and as an administrator for Social Media in our library, I had been questioning this my self ..What would be the ROI for our library in applying Social Media..Like you said, different institution will have different objective and goals in applying Social Media but as for Library I think is more towards promoting the services that it provides to users. Do you agree with that ?

  • http://www.internetmarketingsource.net Sam Beamond

    Doshanif, promoting your services to potential customers will always be a part of any marketing campaign. however, its most important to keep the promotional content in social media to an absolute minimum. Social media is about building relationships with your customers. By providing them with engaging content and information and building trust through your non-promotional approach, sales and business growth will follow. It works every time.

Switch to our mobile site