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ROI is RETURN ON INVESTMENT!


Posted on 18th February, by Tom Williams in ROI. 4 Comments

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Lately, ROI has become a dirty word in the Social Media arena.  VPs and Execs who are just beginning to look at social media as a channel are asking the first question they always ask when evaluating anything new…”What’s the ROI?”

The problem with ROI and Social Media is that no one has truly cracked the ROI formula yet.  We know Social Media is valuable.  We have seen first hand how it drives web traffic and increases chances of sales.  We know it connects people and creates relationships that would otherwise be impossible…but we can’t seem to say “If you invest $10,000 in these social media applications, you will see a return on your sales of $100,000 in 12 months”)

So, what are we to do?

Lately I have been noticing a disturbing trend among social media practitioners.  Instead of admitting the difficulty of ROI and seeking to crack the formula, people are simply renaming it!   I’ve heard it called “Return on Influence” and “Retention on investment“.  I also recently saw the letters re-arranged to IOR for “Impact on Relationships“.  This does little to satisfy the executive’s need for hard data.

So…instead of jumping on the re-definition bandwagon, I went on the hunt for some smart folks who have begun to address ROI for what it is… a way to measure the success or failure of time and money spent on social media.

Here is a great consolidated list of ROI resources.  This list is quite extensive.  So, if you are short on time, here are a few of my favorites:

Social Media Compendium

Calculating the ROI of Blogging

Ten things to know about measuring Social Media

Social Media FAQ #3: How do I Measure ROI?

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4 Responses to “ROI is RETURN ON INVESTMENT!”

  1. John McTigue says:

    I guess I don’t see what the problem is. If you use social media in a marketing campaign and track the traffic and conversion rates of specific landing pages with calls to action, you can measure ROI directly. I’m assuming most people don’t do that (yet), hence the dirty word.

    • Studio C5 says:

      True, but you do not know the percentage that viewed said link that didn’t follow it. Additional tools can help you draw more knowledge and go from there.

  2. Allen Taylor says:

    Nice writing. You are on my RSS reader now so I can read more from you down the road.

    Allen Taylor

  3. [...] as our greatest FREE marketing tool.  Social Networking is all the rage these days, but what about Social Media?  Tom Williams asks: Is there any ROI?  Is all this blogging, tweeting and facebooking really [...]

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