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While I am a fan of “measuring to manage well”, some things just can’t be measured accurately. That’s why I believe we should forget what the ROI of social media is, in the conventional sense.
Here’s the metric that matters most when it comes to using social media for marketing:
Is your target market talking about you?
That is a yes/no question. There isn’t a correct number to answer it.
Einstein may well have been talking about social media when he came up with this thought: not everything that matters can be counted.
I don’t recall who said it, but one of the greatest lines I have seen on this topic was:
The ROI of social media is that you will still be in business in 5 years time.
I believe that statement to be essentially true: traditional “push” marketing tactics will increasingly struggle to generate decent ROI, especially as consumers “filters” (both psychological and actual technology filters) become more refined.
The marketing that will make all the difference in the near future will be the tactics that are centred upon having ideal prospects talking positively about you and what you do.
I can look at some measurements in my own business and say that social appears to be responsible for between 20% and 25% of new business revenue in each of the last 4 years. That is not an absolute measurement though. I account for new revenue opportunities by source as best I can, and often will have a new engagement where it is attributed to “I have been following your stuff for a while and you seem to know about…..” followed by “can you help me?”
The problem with social media in respect to measuring ROI is which channel do I attribute such enquiries to?
You see, the audience is seeing some stuff on Youtube, and some on Twitter, and some on LinkedIn…maybe following the blog and picking up a few ideas from Pinterest….and on it goes. Or was it the e-zine I mail out directly?
It doesn’t really matter does it?
What matters is the total marketing spend versus the total new revenue. The only ROI measurement which does matter is the overall return on money invested by the business – including all traditional and conventional marketing tactics.
The magic of social media as a marketing tactic is the engagement level of a rapidly growing audience of willing participants. You can create a significant audience of genuine prospects for your business who want to engage with you and your brand.
The question that professionals who are investing marketing dollars into social media should continually focus upon is: Will this get the people we want talking about us?