Everywhere you seem to turn these days within the social media landscape, there’s talk about ROI.
What are the metrics that should be used? What KPIs should be considered when measuring ROI?
While it is important to get a good handle on the returns of an investment – be it time, money or people – there seems to be an obsession about social media ROI. Maybe it’s because metrics are a key ingredient of social media when you consider the focus on the number of comments, tweets, RTs, updates, Likes, views, followers, etc.
Since social media can be measured in different ways, it is measured in many ways. In some respects, it’s like baseball, which involves so many statistics that it spawns endless approaches and way to measure just about any team or player.
The strange part about the obsession with social media ROI is how so much marketing spending isn’t measure or can’t be measured – something that was highlighted in a recent comment.
For example, what’s the ROI on a brochure? What about a billboard? How about an ad in a newspaper?
It is possible to measure how many brochures are printed and how many are distributed but you can’t measure how many people read a brochure. In the same way, you can measure how many automobiles pass a particular billboard you can’t measure how many drivers actually look at the billboard.
Despite the inability to accurate measure the effectiveness of a billboard or brochures, billions of dollars are still spent on them by companies as part of their sales and marketing activities.
Another reason for the fascination with social media ROI may be because it’s relatively new. As companies experiment with social media as opposed to spending on other marketing activities, the ability to measure social media ROI could make it easier to justify spending more if the results are encouraging.
This can be particularly powerful within an organization that is reluctant to changes it ways, even though the market dynamics and the competitive landscape may make social media a no-brainer.
Perhaps we’re overly concerned about social media ROI because it is so new. And while it would be wrong to dismiss social media ROI, we may need to be stressed and focused on it.