- Image via Wikipedia
The Social Media ROI discussion deserves a much longer post.
However, I wanted to take a look at this from a mathematical approach and look at calculators that are available. It will get your mind stirring, if you are not familiar with how to measure SMM. And, as you’ll see – for social media calculators are flawed, and as it will certainly not be exact for all businesses.
There are too many variables to capture an exact picture, and some things we don’t know until the social media program is under way. We also need time – to collect data – and analyze against baselines from previous periods. Some are guesstimates, as you’ll see. A level of measurement is important to start though.
To find out how well we are doing, we cannot simply use industry data alone. For example – a conversion rate. Industry analysts will say a 1-3% conversion rate is probably “average” – you should not concern yourself too much with it.
Get your own numbers.
How do we do that for social media?
For the search marketing industry – and CPC (cost per click) and CPM (cost per thousand impressions), we often will see various calculators to help see numbers from future or existing programs.
The ROI (return on investment) for a cost per click program can be tested with the use of a CPC ROI Calculator. Input the numbers, and see the results. You can also use CPM buys calculators, and they are pretty straight forward to understand.
Typical inputs for an online CPC-based calculator are:
- Number of clicks
- Estimate average CPC
- Conversion rate (%)
- Average profit per conversion ($)
Your ROI is calculated from it – and it will make sense to your accountant.
- Image via Wikipedia
For social media however, it is a different story.
For a fast measurement of success for social media, variables commonly looked at are:
- Number of Followers in a period
- Number of ‘Likes’ in a period
- Number or RT’s (re-tweets) in a period
- Number of mentions by brand (social monitoring)
- Number of incoming links to your website (from social media)
- Web analytics tracking numbers
The Social Media Marketing ROI Calculator – opens up a whole new level of thinking. It’s not perfect, but trying it will make you plan and reflect more on the way your organization produces content and web assets that have “value”. How do you assign this value?
It looks at start up costs, ongoing costs and annual benefits across your campaigns within the organization.
What do you think? How do you track success metrics within social media today?
Related articles
- How to Calculate the ROI of Enterprise Social Media (pamorama.net)
- ROI vs. KPI – Why Social Media Can’t Show You the Money (customerthink.com)
- Six Minute Strategist Guide to the Social Media Ecosystem [John Colley] (ecademy.com)
- Are you a Social Media Addict ? [Infographic] (madrasgeek.com)
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Entrepreneur Magazine says Jon Rognerud is one of the most sought-after Digital Marketing Experts. His clients extend from high-end brands and middle-tier businesses in both B2B and B2C. His SEO website optimization book, "The Ultimate Guide to Optimizing Your Website" from Entrepreneur Press is in bookstores now.