The following short article will show how Social Media is one arm of the entire marketing channel of any business.

Many marketing companies have debated on the best ways to measure the Return on Investment for Social Media. With the tremendous expansion in the world of more and more businesses implementing and using Social Media new ‘jargon has emerged on the various social media platforms’. Terms such as ‘re-tweets, mentions, likes and shares’ are unique to Social Media. 

The question is how does one determine an ROI on things like ‘social media community influence, engagement and conversation’? Its one thing generating many fans and followers, however its concrete proof of the ROI that people are looking for. If we cant find a way of measuring the ROI then businesses cant justify what to spend on Social Media marketing.

We feel the main problem is that RIO is a financial term. The good news is  that whether this is the best way to try and measure the success of social media really doesnt matter! At the end of the day ROI is the measure for success of the business. Social Media is one marketing sector that plays its roll amongst many other aspects to boost the overall ROI of any business. 

An interesting and very valid point is that your Social Media expenses can be compared to what an average business would spend on Google Adwords or PPC advertising. A simple measurement can be taken here, such as the cost per click, cost per impression, cost per conversion and all the internet traffic generated to your website. When doing this you will have something concrete that justifies a marketing budget.

When reviewing your social media insights you will see an exact measurement of engagement and clicks on ‘like per post’ on Facebook or ‘re-tweets and mentions’ on Twitter. Monitoring the success of these is directly comparable to what you would have to spend on Google Adwords / PPC.

At Sapphire Dawn, we print monthly Insights Reports from Facebook Business Page Insights. This tell us how often people are engaging and what type of content is performing. We also have our clients registered on Google Analytics. Once you have a clear understanding of the above dynamics, it is much easier to measure costs and ROI when conversions are directly resulting from social media.

A common question is ‘will Social Media result in more sales for my business?’ There is a clear misunderstanding here as Social Media is a platform to develop connections in the company’s target market and to generate leads! It is the duty of the company’s sales team to convert leads to sales and therefore expectations have to be aligned accordingly.

To put it clearly Social Media generates soft leads, the conversion of sale will depend on proactive actions from the Sales team to call, email or visit/meet with, once the lead is successfully generated and passed on. To summarise, Social Media is ‘one line item’ on the budget of many marketing channels. Its up to the company to understand its role and integrate this into the overall marketing plan of the company. To exclude Social Media simply means a ‘missing link’ in the marketing division of any business that wishes to grow and utilise all effective channels when pursuing company objectives and growth.

Our advice? Happy Tweeting and Posting 🙂




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