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A Guide to Measuring ROI in Social Media

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Businesses of every size are concerned about their return on investment (ROI). Time and or money are our biggest investments and they must generate a positive return in order to remain in business. The return on investment for reaching new buyers is often the hardest to calculate due to intangible evidence used in the equation.

Social media is intense with over 8 new people coming online every single minute!

In just a few short years the Internet economy will be worth $5 Trillion according to some projections. CEO’s hear those numbers and are scrambling to develop a plan and a strategy that will keep some of that money for their company. At the very same time, other leaders are scrounging for every cent of savings. So the question remains: is there any way to calculate the return on investment (ROI) in social media versus other channels?

There are always people who will listen to anything that they want to hear, but the real answer the answer is no, not definitively.
The difficulty is how we describe the buying context – such as via e-commerce advertising, or social media recommendations – means there is not yet a conclusive measure for the contribution of social engagement overall.

However, there are some effective ways to make an evaluation.

The most advanced tools capture the non-financial value of lead indicators, such as online relationships. Since word-of-mouth recommendations are one of the cheapest and most effective forms of marketing, getting some back ground on how online relationships influence the purchasing decisions of consumers is a useful for business leaders.

In this case, the return on investment of social media could be measured by the cost saving from trying to obtain the same data by other means, such as focus groups, which are expensive, or surveys, which can be inaccurate.

Here are four metrics with four different perspectives


Has revenue or profit increased or costs decreased?


Have consumer attitudes about the brand improved?

Risk management:

Is the organization better prepared to note and respond to attacks or problems that affect reputation?


Has your company enhanced its digital assets?


Keith Thorn, LLC
On Point Business Solutions – Working Smarter, Not Harder® Apps

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December 2nd, 2020 03:49 pm
November 23rd, 2020 12:19 pm

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