CALCULATING ROI IN SOCIAL
MEDIA
What is ROI and how the are you going to measure it?
return on investment –nounthe amount of profit, before tax and after depreciation, from an investment made, usually expressed as a percentage of the original total cost invested.
Abbreviation: ROI
ROI
(gain from investment – cost of investment)
cost of investmentROI=
Sounds simple, right?
Actually, it’s a little more difficult…
You cannot succeed in anything if success is never defined.
Success is definable and attainable
What’s the return you seek?
Drive Sales
….then return is the number of sales that you can attribute to your social media campaign
Drive customer insights
….then return is the quantity and quality of the consumer insights you get from your fans and followers.
Drive brand awareness
….then return is brand awareness
Social media return is the value that you derive from social media based on the goals of your campaign.
Quantifying Your Return
Counting What Counts
…
Developing a method for dollar quantification can be hard..
but not impossible…….
Measuring Sales
I’m going to assume you know how to measure sales already
Quantifying consumer insights
compare the quantity and quality of consumer insights from offline focus groups to consumer insights from your social
media campaign
Quantifying brand awareness
Conduct surveys, polls, reach out to your customers and place values on the responses.
You can’t quantify your return…..
… until you’ve defined what you’re measuring
… and how you’re measuring it
Social Media Is Free!
NOT EXACTLY……
Just create a Facebook page…….
and people will follow
right??
WRONG!
additional cost factors to consider…..
staff costscampaign manager
support teamdesign team
advertising costs
Ad words, Follow Buttons, Facebook Ads, Email campaigns…..
content creation, external costsoutsourcing costs
analytics tools, additional tools …technical & creative costs
Now that you have your values…..
Plug them into your ROI formula
Now compare your campaign returns
Against your print, radio and other campaigns
ROI is the most powerful tool in your toolbox
USE IT WISELY
THANK YOU FOR YOUR TIME
[email protected] facebook.com/yoursocialmediacompany twitter.com/ursocialmediaco youtube.com/yoursocialmediacom Kgorsline 843.732.0234 781.357.7697
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