ROI is defined as (gain on investment-cost of investment/cost of investment), with the expectation of investing less than you will actually get in return. ROI is a business metric, not a media metric, so it will prove legitimate results with social media marketing including SEO, email marketing, and website implementation.

Oliver Blanchard, a BrandBuilder Marketing principal and senior strategist has done extensive research into Social Media ROI and reveals some clarification into how this is possible to measure. Something important to remember is that social media marketing is not free; it takes time, energy, people, and technology to be carried out.

There are two large and fairly simple reasons why it is necessary to allocate money for spending on social media within the company. First, it will result in cost reduction in customer service, business intelligence, and market research, just to name a few. On the other hand it will simultaneously generate greater revenue by yielding more transactions, more net new customers, enhanced customer loyalty, and brand awareness.

SEO (search engine optimisation) is especially pertinent to gaining as many users and potential customers as possible. If used correctly, then your company will be sure to receive much more attention and publicity. Failing to get your website on the front page of a search engine site such as Google equates to 40% of potential visitors who won’t see your site. According to statistics, 67% of people try another search after reading just the first two pages and 81.7% abandon the search after reviewing the first three pages, so being placed anywhere past these makes the possibility of your website being acknowledged very unlikely.

Clearly the ROI for mastering SEO is very measurable and will create not only more visibility and recognition for your company but also greater financial incentives because the high traffic will allow your site to be expanded even further and will enable every dimension of your company to grow. With dedication and focus on the important aspects of SEO such as reviewing competition, finding popular key words, predicting click-through rate, and predicting future behaviour from SEO experts, then making your way to the top will be possible.

Email marketing is another increasingly accepted and widely used tactic that is yielding positive response rates, especially compared to direct mail strategies. In fact, across all industries 25.16% of email marketing messages are opened by Australian recipients at the end of 2009 with 75% of people opening their mail within 24 hours. On the other hand, a mere .02-4% of people respond to any direct mail marketing messages. Once again the ROI on the email marketing strategy is obvious and if used effectively will create a new niche of an active and interested audience.

It is necessary that when you first begin measuring the ROI for social media marketing that you start with a proof of concept by showing growth in the company’s awareness, sales revenue, number of transactions and net new customers after its implementation. Transaction data should be specific by showing the frequency, reach, and yield of the customers.

By looking for patterns in the different fields that have changed since the execution of social media tools, it will be easy to see the impact. By stacking these time lines on top of one another, your company can create a picture of which efforts are working, and which ones aren’t. Watch for correlations between events, such as certain blog articles equalling more customer calls, or positive online mentions and a jump in site visitors.

By using what you know, you will be able to make it affect all aspects of your business, including traffic in your actual store or business. Social media marketing will be sure to greatly increase your ROI for all aspects of the company.

Image by JeffMarmins

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comments (2)

  • Raj - Melbourne, Australia

    You are correct. Having concrete goals and concrete baselines is crucial to calculating your return on investment. You can have one goal or multiple goals depending on your business but you have to check your business goals clearly to measure the ROI.

  • Jeniffer

    I m experts of seo but having idea about smo.i did not know smo is the good way to improve ROI.now i m clear about it.Thanks for good topic.

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