Social Media Marketing Blog

ROI is probably the number one thing businesses think about when deciding whether or not they should make an investment in Social Media marketing in general and Social media promotions in particular. However, when it comes to social media it is more difficult to measure the ROI, as many believe it is like attempting to measure something immeasurable. Thus many companies don’t take the time to measure it or don’t engage in practices where they believe they can’t measure ROI.

Devising a system to measure ROI helps companies save thousands of dollars and increase sales. For, social media calculating ROI is very different.  Rather than using the traditional method, it is more practical to use the equation:

ACPC = Average CPC for your Segments;

ACPM = Average CPM for your Segments;

Social Media ROI =   (Number of Clicks) * ACPC

+ (Number of Impressions) * ACPM

+ (Impressions generated by Wall Posts/Likes/Comments/Re-tweets) * ACPM
+ Social Peer Influence;

Other than just generating ROI, social media does more, it helps to engage customers. This is important as it results in customer loyalty, which is a strong key to a successful business. Smaller businesses and stores can also measure ROI through a coupon generator. Each customer would receive a unique code and you could calculate how many people found out about the promotion through that particular source.

In conclusion, there are many ways that companies can see if their internet advertisement is generating business but there is more to social media than just calculating the return. It’s about creating a loyal fan base and generating traffic, which is what will lead your business to success.