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Reframing How You Calculate ROI of Social Media Efforts

by | Dec 9, 2012 | Industry News & Trends

Social media has turned the calculation of return on investment on its head. Since there may be little investment in social media, your calculation is more of a return on engagement.

There is no exact science applicable to placing value on connections. Yet most budgets and companies expect proof that social media is working. If you can’t derive a dollar amount from such activities, what can you calculate? Indirect ROI calculations may be harder to generate but the numbers involved are equally impressive.

You can recalculate the ROI on social media efforts through:

Inbound leads and clicks

You have a blog. You have a microblog. You leave your link on social networking site conversations and have your own online presence. Whether you use a contact form or merely keep track of referrals from other sites, you can estimate the effect you are having on your audience by the amount of activity you are driving to and from your website. Many blogging sites for instance provide you a list of referring sites as well as links your audience clicked on from your blog. Use this information. Takeaway: make sure if you have a social media presence outside of your website that you provide links back to your site.


Whether we’re talking fans, followers or subscribers your consistent, loyal audience can be tabulated. Keep an eye on them and you’ll know what your average traffic is. Caution: numbers are good but consistent readers mean little to people outside of advertising. You want numbers and actions. Work to cultivate not only a consistent readership but one that wants to interact with you.


This goes back to numbers and is a measure of those you’ve inspired. These people think so highly of your content they have provided a connection for their readers to check out your postings. Now those are the kind of friends you want.


Conversion rates, traffic, mentions, search engine optimization, it all matters. Signing up with a service like Google Analytics or referring to Mashable’s article on social media analytics can help you make sense of all the confusion.

Becoming Known as a Knowledge Expert

Another upside to social media is the potential to becoming known as an expert in your field. These experts are then called upon by reporters, other bloggers, hosts of events to speak (or write) about their area of expertise exposing them to a brand new audience. This can be in the form of a guest blog, an article or a speaking engagement. Any of those options will open your content up to brand new sets of eyes and ears. The value of such is not easily estimated but the number of times you are asked for your insight is.

When calculating ROI in social media, or answering the question of whether your human investment is paying off, you have to look past simple numbers and addition and subtraction. You are calculating an effect – not doing first grade math. Look beyond the obvious and to the future. Your answer is there.


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