Measuring social media ROI is complex due to its less transactional nature, but advances in technology and mobile apps are making it easier. Engagement, referrals, and word-of-mouth advertising are also important factors in measuring social media ROI.
Social media ROI, which stands for return on investment, measures the amount of money that social media marketing efforts return to the business or organization. Measuring ROI for social media marketing tends to be more complicated than measuring ROI for more traditional marketing methods. This is because social media tends to be less transactional.
As social media technology advances, however, it becomes easier for companies and organizations to measure social media ROI. For example, when Facebook’s social media network allowed users to open an e-commerce store from their profile or fan page, it created a situation where measuring social media ROI became more transactional and easier to measure.
Mobile apps are also making it possible to measure the ROI of social media. Mobile apps that allow users to check in at specific locations and redeem digital coupons in the process make measuring ROI on social media easier and more tangible.
Other social media experts argue that social media ROI is not just about creating transactions. These experts argue that social media ROI also involves the level of engagement from prospects, customers, and followers. Social media is another touchpoint that businesses and organizations have with prospects and customers, so it’s also an opportunity to get involved.
Other measurement options come from referrals or word-of-mouth advertising efforts using social media. A company or organization can measure, for example, how many likes it gets on its Facebook page. Another measure of social media includes how many new clients it reaches when an existing client or attorney uses social media tools to spread the word about a sale, new product or other information about the company.
For example, group buying sites offer a daily deal but require a certain number of buyers to trigger the deal. These group buying platforms often encourage those who want the deal to spread the word to others they know through their social media. These platforms provide social media tools to help users spread the word and even give the lawyer the deal for free if they forward it to their social networks and at least three people they shared it with also opt in to the deal.
Social media ROI is a calculation of the profit from a social media marketing effort. Measuring social media ROI goes beyond facts and figures and is more of an intangible measure, like following and engaging on social media networks.
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