Changing the way we look at social media ROI
Trying to calculate the Return On Investment of Social media strategies within marketing departments, is one of those complex care jobs that must be done, yet no one really knows how to do it. In a business environment, ROI is used to measure the financial efficiency of an investment
ROI is based on the financial formula of
ROI = (return – investment) / investment %
Simply, if you increase your return over time and keep your investment at the same level you increase your return on investment which is positive. Many companies still struggle to fully understand how to approach the task of calculating the Return on investment on a social media campaign. The main catalyst behind this struggle is that companies seek specific tools to measure their social media return on investment in quantitative ways. This is difficult for a number of reasons, mainly because exposure of your company on various social media platforms does not necessarily convert to hard sales. Social media is just as valuable in creating awareness and building a brand presence as it is in making the tills ring and profit margin widen. I put forward that a company needs to take a more holistic approach to measuring the return on the investment they have made in to a social media campaign or indeed their companies social media presence as a whole. Social media should over time become part of your companies integrated marketing communications as well as your inner infrastructure - essentially being your ‘social infrastructure‘.
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