Determining Social Media ROI

The article “Five Steps to Measuring Your Social Media ROI” by Graham Gullans discusses the difficulty of measuring ROI based on social media. However, as he states in his article, it can be done. In chapter thirteen of the text, “Professor Christine Moorman, the director of the study, observed that, ‘Getting that all-important quantitative proof, which only 15% have, is essential to justifying this spending.’ (Barker, 2016)”

Gullans states that, “social media spending is projected to account for 16% of the digital ad market by 2017.” Making sure that your business’s money is well spent and that you are receiving a return on your investments is important. So how does he suggest we measure social media ROI? Firstly, we must identify our business objectives. Chapter thirteen of the text states, “Marketers cannot create measures with business value unless they first have measurable objectives and then map their metrics to the objectives. (Barker, 2016)” Each business must look at what they want to achieve through the use of social media. Secondly, we should create goals based on our business objectives. Thirdly, we should stay informed. This can be done through the use of Google Analytics, which allows you to track customer action in response to your posts. Fourth, we should set a value to our KPI, and lastly, we should compare our efforts to that of our competitors. This can help a business discover opportunities, but it should not be used to determine overall success as each business is different. (Gullans, 2016)

Gullans did a fantastic job in breaking down specifically how a business can determine their ROI. Also discussed in our class, he highlights the importance of developing objectives and goals and developing benchmarks for measurement. Social media is an important tool for businesses around the world to increase awareness and engage with their customers, but making sure that efforts are worth the associated price is always important. Businesses can feel lost using social media if they cannot see or understand the return. A lot of times this happens because they do not know how to determine their ROI, or are determining it incorrectly. Gullans sets up a step by step process that is easy to follow, from choosing objectives to monitoring the success of your social media efforts. He provides a simplified version of the process of monitoring social media that we learned in class, even recommending Google Analytics. His article lacks actual formulas for use in determining ROI, but he provides generalized steps with instructions. This article is a good reference for any business who wants to determine their ROI based on social media.

-Rebecca F

Gullans, G. (27 April 2016). Five Steps to Measuring Your Social Media ROI. Advertising Age.

     Retrieved from http://adage.com/article/digitalnext/steps-measuring-social-media-roi/303730/

Barker, Melissa S., Donald I. Barker, Nicholas F. Bormann, Mary Lou Roberts, and Debra Zahay.

     SocialMedia Marketing: A Strategic Approach. 2nd ed. Mason, OH: South-Western Cengage              Learning, 2016. Print.