The Best ROI Explanation for Social Media and Some Additions

As an owner of a social media marketing and design company, it can be hard to explain the return on investment in accordance with social media use. I think many of us (marketers) try to find a return on investment because:

A. It can be easier to sell the marketing because of an ROI explanation.

B. We believe so much in social media. We want to use it… every chance we get.

Jason Falls has one of the best explanation (and personal views) of ROI in Social Media in his post: What is the ROI for Social Media?

In the post he starts out by stating a quote I have posted in my office on the wall:

The problem with trying to determine ROI for social media is you are trying to put numeric quantities around human interactions and conversations, which are not quantifiable.

He goes on to say that it is hard to convince business owners that the point of social media is the conversation and relationships. If they are mainly in it for money “they will fail.”

Your ROI is what you got out of the conversation, not what you got out of their checkbook.

I have always been a believer in social media to help grow your business. You can use it as a delivery tool to send a message to many users in a short time span and build relationships. The problem with the business environment and social media is the mindset many business owners are under… the “i need my return now” mindset. “I’m investing $2000 a month in marketing.” I need to see return every month.

Social Media takes time to develop. Amy Nowacoski has a comment on Jason’s blog post has a great comparison for Social Media and ROI:

ROI on human interactions is always very tricky. I’ve worked in fundraising and development for years, and have always held that fundraising events cannot always be about the bottom line. It can’t be about just the dollar figure you amassed that night. Events are also about cultivation and engagement. I would spend time making sure everyone, not just the big donors, feel like VIPs because that guy who only bought a $20 ticket today, could be the guy who gives you $20K in 10 years.

There are always methods of combining social media marketing with traditional marketing. This will give you something of substance (ie direct mail) with something intangible (social media).

Social Media is growing in popularity and growing in validity as a powerful marketing tool. Start getting involved. Set some goals and achieve trusted relationships in your community!

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