I’ve written about measuring ROI in social media before, but I just found a great article on the subject on Mashable by Christina Warren.
She points to a really fantastic presentation by Olivier Blanchard, which I will also use here:
Christina talks about goals, and the importance of having them before you even try to find your ROI. And it’s true. I know so many companies who want to get into social media because everyone else is. But why? What do you hope to attain by doing so? It’s not going to get you instant sales, so you need to be ok with using social media to build your brand and connect with your customers. If you think this is a waste of money, social media is not for you.
Assign a value to everything you do. If your Twitter reach is 5,000 people, that’s worth something. (not if you don’t interact regularly, though). If a Google AdWords click is $1, that’s a value. What’s a click worth from Twitter? Even if you start with arbitrary numbers, at least you’ve got something to look to for metrics. If you spend 20 hours on Twitter to get 1 sale, that ROI isn’t as good as if you spent 15 minutes crafting a custom email. Got it?
Here’s an interesting Twitter conversation I had with @jacobm on the subject.
What are your thoughts? Do you measure social media ROI? How?
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Susan Payton is the Marketing Eggspert, and owner of 
Good articles.
As my tweet: I think businesses are too ROI focused without plain old business savy. They want “guarantee” like in the stock market – instead of realizing that “guarantee”=”low profits”.
@David–
You’re up early (or live in another country)! You’re right. Why the sudden focus on ROI? To me it’s about branding and that can’t be measured. If you see an ad a thousand times and don’t need a product, but then go buy it when you do, what’s the ROI on that?
When advertising or using social media as a marketing tool, I think it’s important to focus on what brings you money in order to evaluate the net present value of your action.
Sure it’s more difficult with social media than with a click paid campaign, but yet it’s still possible.