Social Media

Measuring the ROI from Social Media Marketing

In most cases, the decisions that businesses make are based on the return on investment (ROI) they provide. If you spend $10,000 on a marketing campaign you expect to make enough sales to cover your costs as well as have a few bucks left over. It seems that with social media marketing people are saying that there is no ROI when there actually is.
###Links
We all know a key part to increasing your search engine rankings is links and what better sources for links are there then social sites like Del.icio.us? After getting on the homepage of one of these sites you should see an increased number of incoming links, which should lead to an increase in your search traffic.
###Traffic
Sites like Digg can drive thousands of visitors to a website within minutes which can be very valuable to website owners. Granted those visitors may not click on ads, but if you have something that perks their interest they may sign up for it. Just like any business you have to perk the interest of your potential customers and not the other way around.
Socially driven sites may not have a direct ROI, but they do have one. It may be a little tricky to measure, but there are many benefits that can be obtained from these sites such as links, traffic or even instant feedback that can be used when calculating your ROI.
What do you think about calculating ROI when it comes to social media websites?

 Measuring the ROI from Social Media Marketing
Neil Patel is the co-founder of KISSmetrics, an analytics provider that helps companies make better business decisions. Neil also blogs about marketing and entrepreneurship at Quick Sprout.

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10 thoughts on “Measuring the ROI from Social Media Marketing

  1. Neil, in your experience, do any particular social media sites tend to convert higher than others? For example, does Digg or del.icio.us traffic convert into repeat visitors or those who click on ads?

  2. Nate, I have seen many social media sites convert well and poorly. For example, Pronet Advertising gets a lot of repeat Digg visitors who turn into RSS subscribers because the blog talks about Digg a lot.
    The conversion rate varies for each site based on multiple factors, such as content.

  3. Neil, I am surprised that you, a social marketing consultant, asks so simple questions. I am sure you have a couple of metrics up your sleeve.
    Just in the comment above me, you measured the effectiveness of a Digg campaign in RSS subscribers. Sounds like a good metric to me.
    If you have a forum, that’d be forum members, thread and post number in a fixed period of time.
    While links are certainly a relatively good measure of a successful campaign, I can’t say traffic is great. If visitors don’t become your subscribers, don’t link to you, don’t talk about you and don’t click on your ads, are those useful visitors? Do you need hordes of such visitors? Because that’s what you get from Digg, mostly.
    I’ve heard that Reddit are more susceptible to RSS subscription – I guess it depends on the visitor attention span.

  4. I agree that marketing efforts funneled through sites like digg, may in properly labeled as failed or useless for the above outlined reasons. But, SEO’ers and site owners alike need to keep Digg (and other social networking sites’) users in mind when planning and executing these types of efforts. If your site doesn’t have an appropriate call to action for the thousands of visitors dropped on their site, a small information collection, enewsletter signup, free guide, etc. (nothing too complicated) then the traffic and efforts will have been wasted.

  5. Yuri, Pronet has a wide variety of readers and my goal is to get them ALL engaged. By asking asking simple/advanced questions it helps me engage with the readers more.
    Andy, can you please explain what exit pop and greybox pop are.

  6. Are digg users really attracted to this “exit pop” and greybox? I hate pop ups and I usually just close it or my pop up blocker will catch it and block it.
    I do use “pop in” windows though. Pop in’s have been very successful for me in affiliate marketing and newsletter subscriptions. I wonder if a pop in would work well with digg users.
    Giving them quality content and driving targeted traffic to a site is great, especially for a blog but when you try to monetize this traffic it seems like they are just not into buying anything off a digg article.
    I do see the value in the traffic for other reason’s such as exposure, cultivating a online community, inbound links etc.

  7. I know I am a little late to the conversation but this is coming up quite frequently within my organization. Of course, there are the standard metrics used to calculate ROI (links, traffic, search engine rankings and direct revenue), assuming you can assign a monetary value to each one other than direct rev. But how would you measure long term brand awareness just by being visible in social media channels? How do you know if consumers are actually reading this content? And, how would you assign a value, aside from facilitating a brand awareness study, to this distribution channel?
    I personally think it