Calculating ROI for Social Media

Another great post from Jose Uzcategui:

Its true, social media is a tough sell for business – and understandably so. Execs want numbers, data, percentages… something other than opinions on how spending time and resources on Facebook or Twitter is worth the money – ROI.

To illustrate, allow me to share a brief conversation I had last week.

As I was finishing a social media workshop, someone waiting outside asked me, “are you a web designer?” Huh? This person knew the workshop had nothing to do with web design. Then she continued to explain that, for her, web traffic was the only way you could make the case social for media to business. Hence, it would only make sense that those who use social media in business would come from a web design background…

True, web traffic is a good indicator of the ROI on social media. But increased visits to a site is not always the goal. Plus, increased visitors doesnt necessarily mean increased conversions, and businesses know that.

So do you justify time and resources for social media if you cant predict clear results? How do we make the case for it?

Here are 3 other arguments for social media:

1. Consider the other ROI (Risk Of Inaction).

Its not a good idea to ignore major trends. Having a plan is better than experimenting, but doing nothing is just plain risky. When you see big, medium, and small businesses from different industries jump on a trend, you know something is coming. Or as Sun Tzu says, “When there is dust rising in a high column, it is the sign of chariots advancing…”

2.Think about other investments that are difficult to measure.

How do you measure the ROI for media coverage, public relations or employee relations? Youll find this discussion has been a hot topic since… forever. The between these and social media is time – established industries like PR have been out there for decades while social media is still being born.

3. Its cheap!

30 seconds on cable TV can cost about the same amount as a couple of full-fledged, year-long social media campaigns… I know, you can probably think of better comparisons, but you get the point.

The best way to measure success with social media, though, is to measure your bottom line. It doesnt matter if your web traffic has quintupled if youre not selling more, getting more subscribers, nor making more money.

So, what are your arguments for social media?

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