Does ROI Really matter?
Many businesses use ROI to determine which projects to pursue and which projects should be abandoned. This is the basis that most boards use to determine the effectiveness of any particular project. After all, everyone must be held accountable financially and if projects aren't bringing in revenue, they shouldn't be pursued, right?
Unfortunately, measuring ROI when social media marketing is concerned isn't that cut and dried. It's not that social media marketing doesn't offer any return on ROI, it's just hard to measure the two with hard data. There can be considerable lag time between social media marketing efforts and the eventual return on investment. This poses a problem for those who wish to obtain accurate measurements based on hard data, in a hurry.
How Can You Effectively Measure ROI?
If you can't measure ROI on social media marketing efforts using traditional data collecting methods, then how can you measure ROI? Of course the answer is simple, but it may not be so easy. It's essential to get the right metrics. Income and expenses can't always provide this.
Real Solutions for Measuring Social Media Marketing Efforts
Advertising agencies send out surveys and create focus groups to measure ROI. This is an effective method for measuring ROI in social media. It does take some time and investment in getting data together to obtain accurate measurements, but the results are worth pouring over data for as long as it takes. Once the data is analyzed, all marketers must do is continue to monitor attitude changes with the brand.
Another method that is used by top agencies is developing a consumer panel and track buying habits. Some firms purchase this type of data directly from social media networks, while other companies create their own consumer panels. Both methods involve investing a considerable amount of time initially, but the return is well worth the effort.
Of course, all of these methods are time consuming. It takes an investment of time and money to collect and analyze data when trying to determine ROI in marketing and social media efforts. This may be a difficult task for some businesses, but it isn't impossible.