There’s plenty of debate out there about whether or not the Return on Investment (ROI) can be measured for social media. The social media outlets we use (Twitter, Facebook, etc.) tell us that it’s possible, but is that just another marketing ploy? It seems there are a lot of opinions out there, so we’ve pulled together both sides – we’ll lay out the arguments for and against the ability to use ROI and let you be the judge.
Position One: You Can’t Measure ROI for Social Media
Many claim that ROI is traditionally a financial term that cannot be easily translated into terms of social media measurement. The complexity and diversity of social media data doesn’t fit well into the “cost versus increase in sales equation” that usually describes ROI. ROI originated when trying to find a return based on the cumulative cost of production. In social media, where we can’t determine a specific cause and effect for what we’re measuring, discovering our return just seems improbable. When it comes down to it, there are too many numbers! Social media gives us too many to metrics to collect and interpret. A single ROI number is impossible to calculate. Courtney Seiter of Marketing Land and Lakshmanan (Lux) Narayan, CEO at Unmetric, both agree that ROI can’t be measured – click their names to see their thoughts.
Position Two: You Can Measure ROI for Social Media – And Here’s How
Calculating ROI might not have to be done in a traditional sense. If your business can look outside the box of an ROI equation, you might recognize some helpful trends. Look at your overall sales in relation to how much time and money you dedicated to social media this month. Use handy tools like Google Analytics and TwentyFeet, which are already offering detailed sets of metrics that can help determine how effective your social media work is. (Example metric: How many people per month find your site through social media clicks?) Calculate your monthly reach on all of your social media sites and compare those stats to last month. Collecting data and interpreting how effectively your finances allocated for social media are being used can be easier than we think. Social Media Today’s Michael Cohn and Mashable’s Todd Wasserman think measuring ROI for social media is entirely possible – click their names to read their take on the issue. Want to learn even more? Social Media Examiner interviews Nichole Kelly, author of How to Measure Social Media and the CEO of Social Media Explorer and SME Digital – watch her breakdown of the debate here. We want to hear from you! Do you think ROI can be measured for social media? If so, how do you do it for your business? Comment below! Photo credit