ROI of Social Media

With all the talk about social media becoming the best way to communicate to almost any audience, one needs to think about how to measure that success financially. Chuck Hermann talks about this issue in his post on PR-Squared, a popular public relations blog by Todd Defren.

In public relations, practitioners assign a monetary value to editorial space based on Advertising Value Equivalency. However, can the same measurement be applied to  Facebook when the number of inches on a page is already pre-determined by the site’s limitations? Only actual “likes” can be measured however there are ways to measure how many times a page has been viewed, or how long a user looked at a page. Twitter can be measured by how many followers a user claims, but it gets complicated when one asks if retweets should be included.

Comparing social media to traditional media is problematic and the almost infinite ways to be seen via social media make the ins and outs of charging for time spent on it incredibly vague and convoluted. Hermann says that the return on investment of social media is better regarded as an art than a science. There will always be conflicting ideas and confusion and most likely, limited consensus.

To make things that much more complicated, social media numbers have the potential to be just that, just numbers. These numbers are going to make whoever is managing the social media look great, but the real answer lies in whether fiscal numbers rise with the creation of social media. Sure, a page may have 50,000 likes, but is that going to translate into consumers rushing to stores or online and buying the product? Will someone like something because they are already a loyal customer, or will they buy something because they liked it on Facebook?

Maybe social media needs to be looked at differently than ony other kind of editorial placement. Maybe we need to see social media as more qualitative than quantitative. Maybe it should be used to create a buzz via that social Internet, and let the traditional editorial pieces take it from there.

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2 Responses to ROI of Social Media

  1. slbenne2 says:

    Ever since social media became a big marketing strategy there has been a conflict of ways on how to analyze that information. I think that engagement and the importance of social media are what the customer or fan does in the next step. Engagement is important but if the content used to engage customers does not get them to go out and buy a product, it is not effective. I do not think that social media can be compared to traditional media because as in its name, it is not traditional. With all the development in technology, we have not been able to keep up with how to control all of the information and I believe this is why there is not a general answer on how to measure social media.

  2. jperaza says:

    A lot of company officials associate social media with dollar signs. Since it’s still essentially in its infancy, people want to join the bandwagon and create Facebook pages and Twitter accounts for even the least social companies. (I recently created a Twitter account for a company that sells discounted office furniture.) I think PR practitioners need to reiterate to their clients that “likes” don’t necessarily mean they are gaining customers. Social media needs to be valued for its ability to create relationships with consumers and not as another set of numbers to brag about.

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