How To Determine Facebook And Twitter ROI [Infographic]

Facebook and Twitter ROI

Is measuring ROI on Social Media a myth? Or have we been looking at it all wrong?

I think at this stage, we are passed talking about vanity metrics like Followers and Fans and many businesses are starting to see that those numbers are not directly affecting their bottom line.

But wait…

This is not exclusive to social media. I have seen many times how advertising agencies are focused only on getting an award on an specific campaign, I have been in meetings where at no point, the question of “how are we going to increase sales?” has been put on the table.

ROI is not hard to measure in social media. ROI is hard to measure in marketing in general.

Another aspect of this complexity of measuring ROI is that there are items in the social media marketing plan that are not supposed to generate sales. If you are trying to measure the ROI of solving a problem for a customer, I’ll say you get a great return, a happy customer is huge, but it has no monetary value you can put on a spreadsheet.

Here is a very interesting Infographic from the folks at Invent Help that aims to make you look in the right direction. Let’s look at some of the data presented:

  • 73% of CEO’s think marketers do not generate growth as they should and 77% think marketers don’t talk about sales, which is the only reason why a company is talking marketing in the first place (Although is worth mentioning that I know more than one CEO that is highly distracted by shiny numbers)
  • Most marketers talk about Fans/Followers, web traffic and social mention
  • There are some good examples of how sales are directly affecting business revenue like the Jimmy Choo Twitter campaign, which represented a 33% increase in actual sales
  • 40% of Facebook users that has Liked a brand did it to receive discounts and promotions while only 13% did it to interact with the brand
  • Social media offers companies other beneficial aspects that are not directly related to revenue such as a great vehicle for customer support, increased brand equity or market research.

What do you think?

Can we measure ROI is social media? When you think of your social media efforts, are they attached to a business goal or are they independent? Are you consciously trying to move the needle in sales when you spend time on Facebook or Twitter?

Share your thoughts in the comments section. Happy Friday!

How to determine Facebook and Twitter ROI

Infographic courtesy of Invent Help.

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  • http://twitter.com/jasonarican Jason Arican

    Hey Francisco- 
    Great to see the discussion progressing on ROI in social media… I think we agree that there are a lot of areas that business can grow in that regard. 

    A few things to add: 

    -Yes, businesses should absolutely tie everything that they do (and not just social media) to the overall company objectives. This almost always ends with making more, or spending less, money.

    -To avoid any confusion, ROI is literally a RETURN (a dollar amount), based on an INVESTMENT (another dollar amount). Don’t make it out to be any more, and especially not any less. Don’t forget to consider that social media programs are not free- you have to pay someone to manage them.

    -To your point of a happy customer, this is actually something that can (and should) be measured. Increased customer retention is a measurable ROI (because it translates to more money. See above). The idea is that your efforts in social media, through things like relationship building and problem solving, should increase brand affinity and in turn help you keep more customers.

    These are just a few things. Calculating ROI isn’t the most complex thing in the world, but it does take some planning and isn’t as callous as some make it.

    There are a lot of great resources out there and I would encourage people to educate themselves because that is the only way that you will be able to get (and more importantly, sustain) executive level buy in to social programs. Best,Jason

  • http://www.socialmouths.com/ Francisco Rosales

    Hey Jason,

    I couldn’t agree more with each point you make. I specially see the tendency to forget the “Investment” part of ROI, we assume that because it is Internet, we can get away with free tools and we often sacrifice.

    I come from tradicional media, where you not only have to invest heavily but if you don’t measure every single detail, you’ll lose your shirt in no time.

    Social media is still media.

    Thanks for your comment.

  • http://twitter.com/scottskramer Scott S Kramer

    Hmmm…are all the examples in the infographic brands that have ecommerce sites so that they can track where sales are coming from?  Much harder to measure ROI when ecommerce doesn’t exist for a brand.

  • Ctwrimos

    Please proofread your articles before posting.  It’s jarring to read an article that uses the wrong verb tense several times, etc.   If you need a proofreader, I’d be happy to help.

  • http://www.jacksonlaws.com/ jacksonlaws

    Are you consciously trying to move the needle in sales when you spend time on Facebook or Twitter?

  • http://igethair.com/ igethair

    Let’s look at some of the data presented:

  • Al

    Social Media activity is very track-able. In fact Dell was able to track $6.5 mil in sales over a 1.5 year period via social media.

  • Suzettes

    It is not that easy you know. People judge too much.
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