How to Estimate Your Social Media Return on InvestmentPosted on October 12, 2011 by Social Media Examiner in Social Media
Are you wondering how to determine the return on your social media activities? If so, look no further.
Why Estimate a Return?
Before we go any further, let’s review why we need the social media return and ROI again.
You use the return and the ROI to compare the efficiency of marketing campaigns; for an in-house team, you can use these numbers to negotiate budgets with your management; for agencies, you can use estimated numbers to land prospective clients and to retain current clients. The numbers are used in conjunction with social and web metrics to analyze and optimize current and future campaigns.
Last but not the least, a primary reason for using the return and the ROI is social media financial accountability. As social media initiatives become mainstream, executives are holding them to the same accountability as other business initiatives, demanding financial returns and ROI on social media investments.
In the article mentioned above, I also said that the ROI calculation is easy; you simply use the financial ROI formula. The tough part of social media ROI is to tie a hard-dollar value to the social media return.