In Social Media, ROI = Return on Interaction + Return on Influence
Guest post by Peter Bihr
The Waving Cat
How to measure the success of Social Media has been a huge problem in this industry for quite a while. There is a consensus that the number of fans/likes on Facebook or of followers on Twitter is too weak an indicator, but the alternative metrics are still rare: No golden standard has emerged yet.
This presentation by 22squared on Return on Investment (ROI) in Social Media is the best I’ve seen in a long time. One of the few really good ones, really, as it backs up the main claims with data. Since you read this blog, the core finding won’t really be a surprise to you: Social Media engages customers and stakeholders, leads to interactions and eventually even to increased sales. (The latter part being the least important here.) It’s certainly good to have a decent study to back this up.
The key idea is to factor in non-financial benefits of Social Media engagement, too: Return on Investment = Return on interaction + Return on influence.
(via WeAreSocial)
Reposted from Peter Bihr’s The Waving Cat under a Creative Commons Attribution 3.0 German license. Here’s the presentation on Slideshare.
Interesting study. I can only speak to b2b and b2g social media campaigns. But I can tell you that increasing sales is NEVER the least important metric to the client. If you can't quantify the ROI of the project, it will not be funded. The key is patience — build an audience with good content, then appropriately look for ways to provide additional resources — an event, a white paper, an offer — that encourages self-identification and deeper involvement.
Thanks for sharing!! This is truly helpful. I've been looking for a new equation for ROI and this presentation hit it on the head.
Branding would be the most beneficial aspect of social media aka networking. Getting your new product or new services around but it would have to be something people want to follow. And some are quite fickle.