8 Steps To Demonstrate Positive Return On Investment For Social Media Marketing

Jeff,
Great post! I like the idea of a pilot program, it makes sense, and analytics are a definite must. Traffic will increase when all these social media marketing strategies you mention are in place, and traffic will produce eyes on your business through the great content you post and support you provide. Top skills must be focused on conversion of the traffic. There is definite social proof traffic increases. You are correct in mentioning that the old standard methods of advertising must be reevaluated, just for their lack of quantifiable analytics alone. I have found that some will argue it costs more to employ the necessary size team to take on all these social media marketing tasks than to simply throw ads out there and hope they stick- it is all the same gamble. Which, personally I disagree with; because once you set carefully planed social media marketing strategies and efforts in place you can forget it and scale back. A portion of the correct thinking should be analyzing the building of your brand as well, which may take a year- hopefully not- to produce enough data to calculate your ROI from social media marketing efforts.

This is tricky business. I recently wrote a post (http://bit.ly/13INRH) that demonstrated how even an extremely modest social media marketing effort would have to generate $680,000 in quantifiable new revenue just to break even. That’s an ROI of 0.0%

Facing hard numbers like these makes it easy to see why so many people prefer to stick their head in the sand and ignore the true to cost/benefit of social media programs. Whether you work under the banner of “brand equity” or “awareness” or whatever, at some point it gest back to money.

Hi Jeff,

I like your suggestions of goals for measuring the effect of social media marketing. In this exact field it is relatively easy to get quantifiable data.

Connecting the effect of projects to bottom line value though – is a little harder. Especially when it comes to other social media activities or innovations projects.

I have written a post on the need to make a distinction between project and effect goals when evaluating the sucess of social media activities: http://www.sofusmidtgaard.dk/measuring-the-success-of-open-innovation-and-idea-platforms/

If you accept a “less than perfect” approach to data you would be able to link effects to $-value. Here an attemt based on setting goals for and evaluating the value of innovation projects:
http://www.sofusmidtgaard.dk/how-does-innovation-contribute-to-the-financial-results-of-companies/

All the best
Sofus

A truly brilliant post much-needed for any client-facing social media marketing consultant challenged on costs and ROI.

@Jeff I think ROI, in regards to social media, is case-sensitive. Goals should be set before engaging in social media. It’s also important to focus on platforms that are best suited to reach those goals and not spread yourself too thin.

[...] 8 Steps To Demonstrate Positive Return On Investment For Social Media Marketing « Jeffbullas’s Bl… Social Media Marketing’s ROI (Return on Investment) has been discussed on the web in blogs and websites and comments are frequently heard such as “You can’t measure the ROI of social media marketing” (tags: socialmedia marketing roi strategy framework) [...]

Hi Jeff, great post which will definitely be useful for corporations and enterprises. Thanks for sharing

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[...] Betrachtungen haben Jeff Bullas mit seiner prozessorientierten Zusammenstellung von acht Stufen des Social Media Marketing sowie Don Bartholomew in seinem Entwurf [...]

let make this question :
¿does the websites without selling point make revenues? , no directly but yes on a comercial universe.

Great post, well researched and presented. I especially like your section on the framework for measuring social media benefits. Participation is critical, if users and of course businesses don’t engage then there will be a substantially lower ROI.

[...] 8 steps to show Social Media ROI [...]

I ask the simple question: What’s your Return-on-Ignoring?

One only has to read a few ‘social media horror stories’ to realize that at the very least organizations should be monitoring the social media space.

[...] can’t measure the “ROI” for Social [...]

[...] Takeaway: Johnston says “Qualitative rather than quantitative improvements” is what Twitter is about, not ROI. [...]

[...] those discounts without ever leaving Facebook.  The bottom line is if retailers are looking for an ROI on social media, give shoppers the same [...]

[...] 8 Steps To Demonstrate Positive Return On Investment For Social Media Marketing [...]

As a small business owner and adopter of social media, at least Facebook and Linked in, I found this a very useful article. I thought there was no way to quantify the benefit of engaging in the social media whirl.
Your article was thoughtful and technical rather than just theoretical and I appreciate that.
I’ve made some sales because of my involvement in social media. Surprisingly I enjoy it, which is a hidden benefit. Perhaps a bit too much!

Great comment – let’s say your sales stayed the same, but what if you have not done any social marketing. Would your sales have tumbled? A way to test hat is to promote a single product with social marketing, building a micro-site …

A couple of other pitfalls:

1/ Measuring your sales or hit-rate on the website before might not be enough if you’re in a cyclical industry: an increase of sales of your XMas store near XMas is probably nothing unexpected. The question is whether your increase was A) higher than in the years before, and B) whether your market share amongst your competitors was increased as well

2/ If you’re a larger company probably many activities are geared towards higher revenue / lower costs. The problem now is to connect your efforts directly to your activities. Maybe the sales went up because everyone else increased their price by 10cents. Maybe a major competitor went out of business. Maybe there was a product consolidation and now each of your products – including the social marketed one – gets a larger wallet share of your customers.

3/ Also measure the internal cross-conversion rate: We know that social marketing sometimes has its own way… a couple of times we realized that our campaign was not what we expected it to be: it drove lots of people to the website, but the items they bought were actually something else. We tried to do this on purpose a couple of times – have people teasered with a lower-priced product to make them buy a higher-margined procuct – but with mixed results. I don’t think we can promise clients that we can use this strategy on any product and it will execute every time…

8 Steps to demonstrate positive return on investment for social media marketing http://ow.ly/18oQt

Eight ways to show positive return on investment for social media marketing http://ow.ly/1fqMS

Ways to demonstrate positive return on investment for social media marketing http://ow.ly/1fPui

8 simple ways to demonstrate positive return on investment for social media marketing http://ow.ly/1fPEe

Eight ways to demonstrate positive return on investment for social media marketing http://ow.ly/1gbrk

The idea of quantifying social media may sound difficult or vague at this point of time, but so were most media concepts in their infancy. A few years ago, when the internet was invented, no one thought that it would be a major source of revenue for thousands of firms or that entire businesses would based off just a single machine in some corner of the world.

All the metrics to measure its success were developed as the idea matured. Each new concept has its own set of unique metrics that are developed based on the idea itself. E.g. the idea of “Retweets” or “Fans” or “Friends” would not make any sense without the concept of Twitter or Facebook themselves.

This article is a step in the positive direction to determining the quantifiable results of Social Media Marketing. All marketing concepts revolve around the idea of reaching out and spreading the word to as many people as possible. It is human nature to get bored with one concept and move to newer avenues. Hence, in the history of marketing we see a trend of constant change from Gutenberg’s metal movable type to the use of the Telegraph to our modern day E-commerce. Now we find a huge bulk of the people involved in social media – more people talk to each other through Facebook than face-to-face. So, as the old adage goes “Fish where the fish are…”

Social media marketing is all about ‘Listening first and selling second’. As with any other channels of marketing, Social media marketing comes with its own set of implications, such as identifying the correct social media channel (Youtube, facebook etc…) for different types of target audiences and also aligning end goals to the type of channel.

Social media marketing can be measured through various metrics such number Retweets, number of blog mentions, number of friends or followers. The Non-financial and Financial impacts are clear ROI indicators. Even though social media marketing returns may not fit into currently existing metrics defined to calculate ROI. It has its own set of indicators to measure the cost saving and increased revenue for an organization. Hence I feel that the ROI of social media is as measurable as any other form of media and it is slowly but steadily gaining acceptance in professional environments.

8 Steps To Demonstrate Positive Return On Investment For Social Media Marketing http://tinyurl.com/y8orkfl #roi #socialmedia

@Calibrero. Tnx for the follow! 8 Steps For Social Media Marketing http://ow.ly/1sJM8 | Excellent post indeed!

Chicken & egg indeed it often is in terms of engaging senior management to buy into the SMM ‘Spiel’. Great post and well in line with our thinking put into the Social Media Marketing ROI Benchmark Study: http://bit.ly/smmroi – Calibrero & DutchmarQ would welcome anybody’s comments to this Study via Twitter at @calibrero or @phasselsmonning – thank you.

8 Steps To Demonstrate Positive Return On Investment For Social Media Marketing « http://ow.ly/1xB7s

#ROI in social media marketing: interessant : von @JeffBullas (#SIM Score / #OPS) > http://cot.ag/a9Vc9N @StephanRink

8 Steps To Demonstrate Positive Return On Investment For Social Media Marketing http://bit.ly/4vChB3

[...] Customer participation: This includes how much your customers engage themselves with your online content.  Measurements include how many Facebook wall posts you receive, how many Tweets your receive, or how many comments your blog receives.  You must not only count these things, however, but you must also re-engage the customers.  Respond to comments, Tweet about what customers talk about, or make new products tailored to customer requests.  Engaged customers are loyal customers, so the more engaged your customers are, the more likely they are to buy your products. [...]

[...] October 10, 2010 by Claire LaBar Leave a Comment Soft ROI measurement is the measurement of qualitative, non-financial factors. Soft ROI provides a humanized perception of your organization, and distinguishes it from the competition. Important soft ROI measurements include customer participation and satisfaction, brand metrics, and overall influence. [...]

[...] 8 Steps to Demonstrate Positive Return on Investment for Social Media Marketing [...]

This is an excellent post that still resonates today, a year later. However, the challenge is that the process of moving through these eight steps is great, but Social Media is a continuously changing medium. How do marketers optimize in real-time when competitors are increasing influence, sharing, and changing the media with their own participation. Marketing is no longer simply about fixed websites or fixed audiences.

On our Terametric Blog, http://www.terametric.com/blog, discuss which metrics matter and how marketers can measure and optimize in real-time to maximize Social Media marketing ROI.

Great post, great definition of metrics
Norm Van Wieren

SE DEBE ENTENDER QUE LA INVERSION EN SOCIAL MEDIA TRAERA CONSIGO BUENOS RESUSTADOS CUANTIFICABLES…

SE DEBE ENTENDER QUE LA INVERSION EN SOCIAL MEDIA TRAERA CONSIGO BUENOS RESUSTADOS CUANTIFICABLES…

I like this post because every thing you said is very useful and i also use these strategies.

Project Assistant

Social media as a marketing, as with any marketing channel, is more effective when it is integrated and augments other channels. To look for an ROI for social media in isolation is myopic. The problem is that organisations are still operating in silos and separate social media. I interviewed 30 major brands and found that over 60% of them had unwittingly not integrated social media. Mainly due to lack of understanding as to how to use social commerce strategically.

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