By: Abdulhadi Hafez
We’ve stumbled upon an enlightening video produced by MDG Advertising, providing a great insight into how marketers are defining their returns on investments (ROI) in deploying social media for their businesses.
We’ve written an article on this subject before, titled Finally! Some Ways to Measure Social Media Impact on Business, where we argued that although it may be too early to set a solid standard measurement of social media success, marketers are finally starting to come up with some ways to do so. And the good news is that the video gives some us even more eye-opening tips and metrics to help compute social media ROI.
One of the best takeaways from the video is the results of the Forrester study, which provides us with 4 factors to consider in computing social media ROI:
- Financial - Have sales increased or costs decreased?
- Brand - Have perceptions of the brand improved?
- Risk Management - Are you better prepared to respond to brand reputation issues?
- Digital - Has the brand enhanced its digital assets?
By defining the goals and metrics of your social media campaign, not only will you be in a better position to track results, but also determine whether social media producing a healthy ROI or not.
By: Abdulhadi Hafez
One of the terms that gets thrown around way too loosely and vaguely, is the concept of ‘Return on Investment’ (ROI), what is it exactly?
Simply, it is the yields that you receive in return for some sort of resource that you’re sacrificing, such as people (we’re not talking about the Chichen Itza style of human sacrificing), money, time, or anything that keeps you from sleeping at night. Here’s the equation to compute ROI:
But here’s the tricky question, how do you define gain from investment? What exactly is the gain? If you hire a marketing coordinator, then you know the cost of the investment, it’s his or her salary and related expenses. But how will you determine whether you’re generating a healthy ROI with this hire? Will the gain be attributed to leads, sales, profits, or some other sort of metric. You see how confusing it can get!
To make it even more confusing, let’s talk about social media? Does social media actually generate a ROI? That is the least of many questions circulating this topic. Some experts argue that the because of the importance of social media in today’s information, collaboration, and sharing age, the ROI of social media is that your business will exist in 5 years!
Some argue that there is a ROI, but it’s too early in the game to define exactly what gain you receive from your social media investment. Even if you were able to pinpoint exactly what sort of gain you receive out of the whole crazy world called social media. The truth is that marketers have yet to come out with a solid standard measurement of social media success, but they’re getting closer to doing so.
For instance, Wildfire conducted a ROI survey of over 700 marketers from all around the World to reveal what kind of impact social media is having on their businesses, and what are some of the top measurements they value the most. The results were compiled into an easy-to-digest infographic, found below. I know it;s too small to view, so just click on it so you can be taken to the larger version, enjoy!