HOW TO: Measure Social Media ROI

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HOW TO: Measure Social Media ROI

Last month, we reported on a survey that found that 84% of social media programs don’t measure return on investment (ROI). The comments in that post indicated that a lot of individuals and businesses want to be able to measure the ROI of their social media strategies and campaigns, but they don’t know where to start.

Companies and executives are finally beginning to really jump on the social media bandwagon, and that’s fantastic. However, for social media to fully work (for everyone), businesses and brands need to be able to evaluate the impact their social media use is having, both positive and negative. Measuring social media ROI isn’t impossible, but it can be difficult because many of the pieces that need to be evaluated are difficult to track. This guide is designed to help you track down those pieces and determine the ROI you’re getting on social media.

ROI Reality Check

Oliver Blanchard’s Social Media ROI Presentation is a witty, fun introduction to ROI in terms of social media. If you’re confused about what ROI is (or rather, how it is measured), in the context of social media, check out his presentation (below), before you proceed with this post.

Defining Clear Goals

As a standard formula, ROI is pretty basic, ROI = (X – Y) / Y, where X is your final value and Y is your starting value. In other words, if you invest $5 and get back $20, your ROI is (20 – 5) / 5 = 3 times your initial investment. In the financial sense, ROI is measured purely in the context of dollars and cents, however, the principles can really apply to any type of investment — monetary or not.

Having concrete goals and concrete baselines is crucial to ...

Original URL

http://mashable.com/2009/10/27/social-media-roi/

http://mashable.com/2009/10/27/social-media-roi/