The bane of any marketing consultant is the question about proving social media’s ROI. An easy answer is to compare social media with newspaper advertising. It’s difficult to prove ROI on either, however, many business owners, possibly because of their distrust of the Internet, have a fascination with trying to prove there is a solid return on any online investment in social media marketing.
If you’re business owner, I suggest you check out an infographic that has appeared on Pinterest. A little tongue in cheek, it still makes some valid points about social media marketing and ROI. The infographic makes some interesting points, for example:
- social media measurement is a priority
- most marketing people don’t know how to calculate social media ROI
- lots of people are talking about
- justifying ROI is becoming even more important
It goes back to my point above – management insists that marketing people justify their efforts by showing a clear ROI. They, in turn, are looking for metrics that can be used in a formula to do just that. The problem is, it’s hard to create a formula that includes intangibles like word-of-mouth advertising, brand awareness, the benefits to a business, or a businesses overall reputation (not to mention the saving of a reputation).
Are you an ROI small business manager? Whilst there are many areas where you can measure ROI in a business, there are some areas where it’s just not practical. The best you can do is measure year-on-year growth, and to treat social media marketing like any other form of marketing. I asked in an earlier post “Are You Over Analyzing Your Small Business?” – this is a classic case of over analyzing a business.