Simon Salt, a specialist in location based marketing and good guy, points out that people measuring Social Media ROI tend not to understand it's a financial device.
"Let’s clarify here, while I do not deny that there are returns to be made from making an investment in social media, social media ROI does not exist in the terms that it is usually couched in. ROI or Return on Investment is a financial term, usually defined in the following way:"
Simon identifies a real problem, which is misuse of terms, but these types of measurements aren't difficult to come by. In fact, I find Simon's title to be innaccurate, even though his reasoning is sound.
Here's the Title: Why There Is No Social Media ROI
Here's my response.
- Count Likes on Facebook
- Survey Facebook Likes for money spent per sale/month/quarter/year.
- Run Social Media Campaign to boost number of Likes
- Survey Likes post-campaign for money spent per sale/month/quarter.year.
- Compare data on a per customer basis (recognizing a Likes campaign may dilute that share with fake likes). Contrast per person data for success of campaign inside social media (revenue per customer)
- Analyze email list, or in-store visit list for similar per-person data. This is your control group.
- Crunch data to find increase in per person sales during the campaign, based on the number of likes and the baseline data.
- Contrast to control group to determine if the social campaign was more effective than the email list. or general in-store customer.