If you take the time to talk to business owners about social media, most will agree that it is a necessity in order to effectively do business in today’s world. How exactly do they know this fact? How does one measure the effectiveness or the lack of effectiveness of one’s efforts on social media sites using ROI (return on investment)?
Definitive Way To Measure ROI
There are no real definitive answers at this time or definite ways to measure ROI. Since 84% of professionals involved in social media actually don’t measure ROI anyway, at least according to a 2009 study done by Mzingar and Babson Executive Education, there’s not a great need to establish measurements.
Why You Should Measure ROI
However, it is practical to want to establish a way to measure ROI if for no other reason than to be able to make sound marketing decisions. Should you spend your advertising budget on traditional marketing methods or should you diversify your advertising methods? Right now, there are some things you can do to help shed some light on the ROI issue.
Determine your goals. It is virtually impossible to measure the effectiveness of an advertising campaign if you have not established the goals of that campaign. For example, are you hoping to increase your page views, increase your sales, increase the number of your followers on social media sites, or simply increase the amount of times that your business is mentioned in the news or in passing?
Don’t totally rely on numbers. It is impossible to totally gauge the effectiveness of a social media campaign using numbers. For example, Dell made many headlines when it announced that using social media helped to increase its sales. However, it is impossible to actually know how many of those sales were due to their presence on social media sites.
Make correlations to determine effectiveness. For example, if you have an increase in the number of your followers on Twitter due to advertising and then an increase in your sales, you might be safe in saying that your ROI by using social media was justified.
The Present and the Future
Until more effective ways of measuring return of investment or ROI are developed, companies and business owners will have to use common sense and a little bit of guesswork in order to determine if the time, effort, and money that they are expending to achieve a social media presence is really worth it in the long run.
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