Social media can provide both traditional and non-traditional returns on investment (ROI). Traditional ROI metrics like sales and leads can apply to social media, but social media also yields benefits like increased brand awareness, customer engagement, and public relations mentions that are harder to measure. To demonstrate ROI from social media, companies should set goals, establish baselines, monitor key metrics over time, and compare social media performance to other marketing activities and acquisition costs. While measurement challenges exist, an emphasis on engagement and relationships with customers through social media corresponds with greater financial success for brands.

1. Social Media Yield
(Traditional and Non-traditional ROI)
You know your company needs social media, but in a space filled with unrealized potential and
dubiously created metrics (yes, we’re suggesting some are made up), how do you measure
success?
It’s no big mystery: social media should be an integrated part of an overall marketing and
communications strategy and, as such, should be measured and monitored along with all other
marketing and communication activities.
It’s as simple as that? Actually, it is. Though social media may be a new way of connecting with
customers, many traditional ROI measurements work perfectly well for measuring social media
success.
“Since launching @DellOutlet [on Twitter] in 2007, the company [Dell] has taken in more
than $2 million in sales directly attributed to Twitter and another $1 million from people
who start at Twitter and then move on to buy a new computer somewhere else on the Dell
Web site…”
Information Week.com 2009
Having said that, there are many ways social media can benefit your business that result in
returns not typically considered when investing in marketing and communications plans (non-
traditional ROI).
Lee Odden from Top Rank Marketing says his firm derives about 15-20 major media
mentions per month from social media which he estimates equates to paying a PR
firm $10,000/month.
SEOmoz.com 2009
The challenge is to approach social media ROI from a business perspective, not a technology
perspective. Put on your business hat and pretend that there is nothing mythical about social
media… it’s just another effective means to an end.
The Yield Story
You can’t just throw money at opportunities. Instead, think of the return on investment in the
case of social conversations as ‘yield’, as in “verb - to give forth or produce by a natural process

2. or in return for cultivation. There is a process by which that investment, through your activities,
creates reactions. Those reactions result in non-financial benefits, and ultimately, lead to
financial return.
Simply put, engaged customers are more likely to buy and buy again. Even if they don’t buy the
first time but they use social conversations to solve their customer service situations or to spread
the word to their friends, ultimately they save or yield money through your engagement.
OK, if it’s so easy, why is there so much uncertainty about it?
Barriers to Measuring Social Media ROI
Many marketers say it’s important to measure the ROI of social media campaigns, but 70% of
marketing professionals in a recent poll said their companies aren't doing a good job of it.

3. They cited the following as the biggest barriers:
o Lack of dedicated resources to do the measurement and analysis: 30%
o Don't know what to measure: 25%
o Social media isn't primarily about ROI: 20%
o Lack of tools: 14%
MarketingProfs.com informal poll of 338 marketing professionals, June 2009
You may face similar difficulties. You’re not alone; it’s estimated that over 80% of social media
programs don’t measure ROI. Say it ain’t so! Luckily, there’s more than one way to understand
social media ROI, and to show its yield.
Social Media Yield Approach
If you’d like to prove that social media is yielding returns, you can take a simple approach: set
some goals, establish baselines, look for and measure trends, and use comparisons.
Set clear goals
This can seem like an easy step at first, but it requires some consideration. Despite the fun
aspects of social media, investing time and money into a communication strategy is serious
business. Choose S.M.A.R.T. goals or use some other approach, but make sure your objectives
are clear, measurable and realistic.
It’s not good enough to just want to get ‘better’; your goals must be specific—maybe increasing
sales or engaging a specific number of your customer service contacts via a social media
platform. Whatever your goals, they need to be more than soft statistics and estimates.
Establish concrete baselines
Another seemingly obvious requirement: in order to successfully determine ROI you must know
your starting point. Unfortunately, all too often, businesses don’t consider their baselines until
later, and often well after making a communication plan. It’s important to not only understand
where your baselines compare to your goals, but also to know what you can and can’t measure.
If you have a goal that has no baseline and no metrics, you’re setting up your plan for failure
right out of the gate. Of course, it’s altogether possible that you’re trying to drive a brand new

4. metric with no history. If that’s the case, hopefully you can measure against an existing financial
model. Either way, in order to know where you’re going and how to get there, you need to know
where you are.
Monitor baseline metrics, measure results and look for trends
Every day, you probably look at ‘the numbers’ to see if what you’re doing is moving the needle.
Though this analysis may be a little less direct with social media, it doesn’t have to be
demonstrably more difficult. Let’s face it; everything you do from a marketing and
communications standpoint is going to show up in your metrics.
You have your baseline numbers, now you need to take the metrics from your monitoring tools,
and see how they correlate to your outputs. Sales, customer service, turns, reservations,
referrals—these all will be affected, either positively or negatively, as a result of what you do.
You need to examine those baselines and overlay social media activities in order to see what
works. If, for instance, your ultimate measurement is sales, study your sales level. If it has
increased, look at the number of coupons used that were part of a Facebook or Twitter campaign,
and analyze which sales stemmed from your social media campaigns. Look at some other trends:
is foot traffic up in your store after posting on Facebook? How have tweets helped? If there is no
direct return from your social conversations, you can redirect your efforts toward more
traditional marketing activities.
This analysis can be challenging. You must correlate actions to results, interpret the date, and not
rely on raw numbers. Does your increase in website visitors correlate with higher sales? Are
people who find your website via Twitter or Facebook clicking on your product pages, or going
to the e-Commerce section of your site? When you run a promotion on Facebook or Twitter, are
sales up in the same time period? These are all examples of monitoring baseline metrics,
measuring results, and looking for trends.
Some other results to factor in:
o Internal platform metrics like number of FB fans, Twitter followers, etc.
o Branding and Engagement metrics, like direct brand mentions and branded
search volume.
o Targeted responses from special promotions with direct responses, including
intercepted dissatisfaction and other service opportunities.
o Actual Sales and Profit instead of estimates in overall marketing plans.

5. Use comparisons to evaluate non-traditional ROI
Though it’s crucial to understand how social media helps your business in hard dollars, it’s also
important to assess less direct measures of success. For instance, do the leads and sales generated
from social conversations compare favorably, on a cost per acquisition basis, to other acquisition
budgets? Does social media lower customer services costs due to faster, first-time resolution?
Lee Odden’s example earlier in this document perfectly illustrates the comparison between social
media marketing results and hard acquisition costs.
A few other indirect measures of success:
Brand metrics -
Word of mouth and the viral factor inherent in online social conversations can help shift
key brand metrics, including favorability and awareness.
PR -
PR, customer service, and marketing have become increasingly alike. For instance,
Twitter creates a platform that allows everyone to shout about whatever they want to
whomever they want. Social media sites have become the biggest echo chambers in
the world.
Customer engagement -
Given the ease with which consumers can switch from one brand to another these days,
customer engagement is one of the most important business activities today. Customer
engagement is key to improving satisfaction and loyalty rates, and thus revenue. By
letting customers know that you are listening, you can improve your level of service
across the board. Engaged customers recommend your brand more, convert better, and
purchase more.
Retention -
Increased customer engagement also improves customer retention. The state of the
global economy demands that businesses retain and optimize their current customer
bases. You need to do more than attract new customers. If you’re listening to your
customers and engaging them in a respectful conversation, you should see improved
retention rates.
Hopefully you’re not shocked when social media doesn’t generate a ton of immediate results
(sorry… setting up a Facebook Page won’t make your business instantly more profitable).
However, by defining goals, establishing concrete baselines, and tracking and correlating actions
to results, you can figure out what works and what doesn’t. In the end, you’ll learn what solutions
are worth investing in, and what strategies need to be adjusted or abandoned altogether.

6. A caution: Overthinking the yield from social conversations may cost you more money than it’s
worth. Better to have a plan and execute it than to sit around, second guessing the merits of
social conversations and watching the competition eat your lunch. Common sense tells us that
being in the game is beneficial—because it is.
While much has been written questioning the value of social media, a 2009 study
conducted by Wetpaint/Altimeter Group discovered that….
“…
“…the most valuable brands in the world are experiencing a direct correlation
”
between top financial performance and deep social media engagement.”
“The relationship is apparent and significant: socially engaged companies are in fact
”
more financially successful.”
Wetpaint/Altimeter Group 2009
The message is clear: social conversations engage customers. Engaged customers spend more,
talk more, and do more for and with your brand. By executing strategies and measuring yield
through hard numbers and comparisons, you can make sure you’re on top of the social media
marketing game.
Globe Runner SEO
03/08/2010