How to Jumpstart Measuring Your Social Media ROI

  |  November 15, 2010   |  Comments

The ROI of social media is NOT zero!

Measuring ROI on marketing expenditures can be hard. But no one thinks twice about their marketing investment in non-direct marketing like broadcasting, print, out-of-home, and sponsorships. All of these are channels where tracking measurable results are difficult and indirect. Recently there's been a lot of talk about how tough it is to determine the ROI of social media marketing. According to Econsultancy research, about 50 percent of marketers are measuring the return on their social media marketing investment, so it can be done. The fact that marketers are now beginning to be concerned with tracking results from their social media marketing efforts indicates that this is a channel that has moved beyond just testing.

I disagree with fellow ClickZ columnist Augustine Fou who stated that social media marketing's ROI is zero. I would argue very much to the contrary. Social media marketing does yield results when it is defined as return on time and money spent. (For more specifics on return on social media marketing, see here.) Here are five examples of successful social media marketing campaigns and the measurable results they yielded:

  • Will It Blend? This ongoing series of online videos was created on a very limited budget in-house by Blendtec. It attracted broad notice when it tested blending an iPhone. B.L. Ochman of What's Next Blog called this series of online videos "one of the all time best viral campaigns." Bottom line: These videos have built Blendtec's brand and increased sales.
  • Einstein Bros. Bagels. This bagel retailer generated offline sales with its shmear campaign for social coupons distributed through Facebook. Bottom line: Developed by Context Optional, this campaign was measurable in terms of coupons redeemed at retail stores and likes accumulated on Facebook. (Of course, agency costs were involved.)
  • Woot. Built on a blogging format, Woot, now owned by Amazon, offers a deal of the day. There's a limited amount of each featured product offered and once it's sold, that's it. Woot combines limited time and pricing to drive consumer interest. In fact, Woot made a fun YouTube video that received lots of press for its originality to announce the Amazon deal. Bottom line: Woot cost-effectively drives product sales with social media marketing.
  • Comcast Cares. Using Twitter to extend its customer service presence, Comcast has changed customers' perception of their cable provider. Given how much cable companies usually get bad-mouthed for their service, this is quite an accomplishment. Bottom line: Without increasing its cost base, Comcast has provided another touch point for consumers and improved its image. Further, as a social media case study, it attracts additional positive attention at no cost.
  • Deep Focus Open House. Advertising agency Deep Focus used its Facebook page to publicize its open house to source employees for its creative department. By announcing the HR-sponsored event on Facebook, Deep Focus targeted prospective employees from people who were already fans of the firm and were involved in social media. Bottom line: About 100 people showed up at the Deep Focus-hosted open house and they were able to meet potential employers in a fun environment. And the firm quickly got a qualified candidate list, saving time.

When examining the results of your social media marketing campaigns, it's important to understand that the challenges you face are very similar to those presented by more established marketing channels. Among the main challenges and the appropriate responses are:

  • Social media marketing is used early in the sales process. This makes it difficult to identify to what extent it drove specific sales. One solution is to include a call-to-action to get prospects to act. Unlike traditional direct marketing, social media marketing may use a call-to-action for a pre-sale action rather than a sale. Then, where possible, create a related landing page to help convert sales and gather measure results.
  • Sales from social media marketing promotions aren't trackable to the originating campaign. The solution here is to require use of a tailored promotion code to track the results. Know that social media offers may be shared widely. Therefore make your promotional projections accordingly, especially where discounts and free shipping are involved.
  • Social media marketing isn't counted because only the last touched marketing format can be tracked. Like other forms of cross-channel marketing such as direct marketing via catalogs where customers purchase via affiliates, periodic testing needs to be done to determine how different media and marketing are involved in the purchase. Then models can be built to attribute the impact of each marketing channel, including social media marketing.

Assessing the impact of your social media marketing efforts on the bottom line requires understanding related business goals and being able to track the related actions and sales. Further, since many of the costs associated with social media marketing can be internal resources, you have to make a start at assigning a specific dollar amount to each channel/campaign. What's important is to make reasonable estimates and then improve the process as you gain experience.

If you have any additional suggestions that you'd like to add to the conversation, please include them in the comment section below.

Happy marketing,

Heidi Cohen

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Heidi Cohen

Heidi Cohen is the President of Riverside Marketing Strategies, an interactive marketing consultancy. She has over 20 years' experience helping clients increase profitability by developing innovative marketing programs to acquire and retain customers based on solid analytics. Clients include New York Times Digital,, CheapTickets, and the UJA. Additionally, Riverside Marketing Strategies has worked with numerous other online content/media companies and e-tailers.

Prior to starting Riverside Marketing Strategies, Heidi held a number of senior-level marketing positions at The Economist, the Bookspan/Doubleday Direct division of Bertelsmann, and Citibank.

Her blog,, was nominated as a finalist for Top Social Media Blog of 2012 by Social Media Examiner.

Heidi is also a popular speaker on current industry topics.

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