Social Media ROI: Finding The Gold At The End of the Rainbow

Social Media ROI

The concept of Social Media ROI is very obscure. It’s like finding the pot of gold at the end of the rainbow. Is it possible? Can we catch the four-leaf clover? Why, yes. With the evolvement of Big Data, there are several ways to correlate ROI with social media.

The key to tracking social media ROI depends on 3 things:

  1. Your industry/business model.
  2. The scope of your current social media presence and strategy.
  3. And most importantly, your overall business goals.

Now, there will be people, peers, and executives that may not immediately believe that it’s possible. But it’s a lot harder to measure the effectiveness of traditional marketing/advertising (like billboards, radio or TV advertisements) than social media. Data has allowed us to more accurately measure the success of marketing campaigns. (See the successes of Amazon and Netflix’s House of Cards.) Below is just one of the methods for measuring social media ROI:


Social Media ROI

In this model, using social media to drive traffic to a purchasing platform is the key.

  1. Industry/Business Set Up: This model is the most effective for product-driven industries with an e-commerce site (or some other purchasing platform) like eBay, H&M and  Therefore, including relevant links with strong call-to-actions are IMPORTANT!
  2. Social Media Presence: Obviously, this model won’t work for those with only 2 followers on Twitter. If no one is familiar with your products or services, it will be an ineffective strategy. Instead, you should focus on developing your brand’s social media personality to increase brand awareness. In other words, build a relationship before asking for money.
  3. Business Goal: Pepsi’s and Oreo’s successes in social media will not be the same as yours. Get that out of your mind. Your pot of gold at the end of the rainbow may start out being a four leaf clover or some other lucky charm. It’s a process. Pepsi and Oreo already have a global brand presence. (They’re probably more concerned with long-term brand allegiance rather than measuring immediate sales impact.) Therefore, it’s important to align your business goals with your social media initiatives, or you’ll end up being disappointed.

Use Google Analytics to help measure the effectiveness of your social media strategy. It’s free. Also, there are other software platforms available to help build sophisticated attribution models when identifying your social media ROI.

Need help with developing a model to measure your social media investments? Contact me at