The document provides steps for measuring online return on investment (ROI) from social media marketing. It defines ROI as a measure of results relative to costs. It recommends using customer lifetime value and cost per acquisition to determine ROI. It also outlines establishing goals and benchmarks, implementing and experimenting with social media campaigns, and regularly measuring both quantitative and qualitative metrics to analyze and evolve social media strategies.

1. How to Measure Online
Return On Investment (ROI)
By Vibrant Internet Marketing
June 15, 2012
All rights reserved. No portion of this document may be used without express
permission of the author. Vibrant Internet Marketing is available to provide
customized presentation to help your business be successful. For more
information Contact me here.

2. How to Measure Online ROI
• Step 1: Define your terms
By definition, return on investment is the
measure of an activity’s results relative to its
cost. The equation for determining ROI, in its
most simplistic form looks like this:
(Results – costs) / costs = ROI

3. How to Measure Online ROI
Use Customer Lifetime Value and
Cost Per Acquisition to help you make ROI
determinations
CLV = The amount of revenue you expect to
received from each customer during your
relationship with them
( $ per month x 12 months x ? years or months)
CPA = Allowable cost per acquisition
CPA should not exceed 10% of your CLV

4. How to Measure Online ROI
• Step 2: Establish goals and benchmarks
Having a great social media presence is a
means to an end. Engagement is worthwhile,
but it’s important to remember that such
communication serves a larger purpose.

5. How to Measure Online ROI
What are the goals of your social media
marketing campaign?
A. Get Found
B. Drive Traffic
C. Convert visitors to customers
D. Use metrics to analyze and adjust campaign

6. How to Measure Online ROI
A. What are the key performance indicators?
(KPI’s)
A. What are the benchmarks for your
company’s social media campaign?

7. How to Measure Online ROI
• Step 3: Implement and experiment
Once we’ve determined our goals, identified key
metrics and established performance
baselines for those metrics, we’re ready to
start tracking your social media ROI.
– Measure regularly
– Use promotions to identify and track brand
interactions
– Track and analyze user sentiment

8. Social Media Metrics
Quantitative Qualitative
• Number of: • Types of
– Twitter followers
– Facebook fans – Comments
– Page views – Social bookmarks
– Inbound links
– Click-throughs – Ratings
– Leads generated – Reviews
– Downloads
– Growth rate
– Conversions
– Likes/Favorites – Positive and negative
– Geographic distribution of sentiment surrounding your
mentions
brand
– Viral video activity
– Bounce rate

9. How to Measure Online ROI
• Step 4: Evolve
Use social media to improve your entire
business by fueling innovation, collaboration
and improved efficiency.