Social Media – What is the Return on Investment?

We asked this question at our Flintshire Means Business event in February, but finally, the rest of the world is also asking the question! What is the total cost of implementing a social media marketing plan on your business? What is it actually costing you to ‘play’ with Twitter, Facebook etc everyday?

The average businessperson wouldn’t even imagine buying and selling stock without first checking shares’ prices and historical performance. It turns out that all sorts of folks fail to measure the profitability of their social media programs, however, and that’s a pattern of which you shouldn’t be a part.

Granted, the beauty of a lot of social media stuff is that it’s free; you only have to worry about how much time you’re wasting if you’re posting on Facebook or Twitter. And many businesses have a social media presence less for the sake of generating direct sales than to improve their image and engage potential customers.

Still, if you’re spending some money producing YouTube videos or paying someone to create Facebook apps, it’d be a good idea to know how that’s working out, and according to an eMarketer article, only 16 percent of a poll’s participants said that they measured their social media programs’ ROI.

The article then continued, “Measuring the success of social media marketing can be difficult, but using a variety of hard and soft ROI metrics is one solution. For example, distributing a coupon via a social network and monitoring its redemption can put a concrete number on social success. And marketers can also assign a dollar value to soft metrics, such as number of fans or followers, to measure ROI.”

Other options include tracking people’s movements using Google Analytics or asking customers to take part in a quick poll (”How did you hear about us?”).

Hat tip goes to Christina Warren.

Originally posted 2009-09-24 12:45:50.