Calculate your ROI from Social Media Marketing

April 16, 2012 - PRLog -- Marketers are investing significantly more in social media efforts, with increases from 6% to 18% percent of
marketing budgets expected within five years.
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Marketers understand that you must make an investment to
deliver social media results and success, but what spending levels are required, and how much effort needs to
be expended to deliver specific results?
As social media marketing efforts increase, so does the investment required. And in today’s ―age of austerity,‖
every significant investment now requires proof of bottom-line impact and superior value — a condition
called Frugalnomics. As a result, with the social media spending increases, comes increased executive scrutiny,
and challenges from other stakeholders who may be losing budget to these efforts. This is driving the need for
better social media measurement and return on investment (ROI) accountability.
Recent survey results from Altimeter state that measurement is indeed one of the most important aspects to
social media success; in fact, the top priority reported by 48% of corporations was ―Creating ROI
Measurements‖ for internal programs.
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According to Altimeter, ―those that can effectively measure
improvements can make the business case, and can truly obtain more budget funding.‖
However, even though social media ROI measurement is important, Altimeter found that benchmarking efforts
are incomplete, with 65% of corporations using only Engagement Data as the top measurement metric, and a
mere 22% capturing Product Revenue, a key element in quantifying value and ROI.
With so little measurement, can anyone say that there is actual ROI from social media in general and your own
unique marketing efforts in particular? Alinean believes that the sustainability of funding for social media is at
risk in enterprises that are not able to demonstrate solid business cases for these initiatives.
In the next several sections, this paper address the ROI measurement issue, outlining a practical set of
methodologies, calculations and measurements to better understand and calculate the ROI from Social Media.

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