When someone asks me how they should calculate the “return on investment” (ROI) of their social media program, I tend to answer their question with a question (it is an awful habit that I’m working on breaking, but when you read my answer, you might forgive me).
I respond by asking them, “How do you calculate the ROI of your traditional communications programs?”
When the Make Me Social team sat down to create a formula that would allow us to calculate the true ROI of social media, we had a goal: “KISS”, as in, Keep It Simple Superstars. (We have a Positivity Policy and Keep It Simple Stupid was nixed by HR).
Social media has evolved into the next step in communications because it is marketing, public relations and advertising rolled into one. Therefore, if we can calculate the return of the parts that make up the whole of social media, we can calculate the return of social media itself.
The answer lies in properly valuing the different components of social media platforms as they correlate to the more traditional mediums. To do that, you need to have a strong background in traditional media, as well as a deep understanding of social media and emerging platforms. It also helps to have a team that includes some of the sharpest and creative minds in the industry, with decades of experience in one or more forms of traditional communications that they have adapted into strategies and best practices in social media. Sadly, we do not have any “social media ninjas” or “social media wizards” on our team. They were all lost in the great Ninja-Wizard Duels of 2011*.
Ninjas and wizards aside, our collective experience and education helped us roundhouse kick through mountains of data and conjure up a formula that allows us to value the impact of social media in the same way that you would value the impact of traditional media. We have taken the costs, values, and returns used across the communications world and converted them into costs, values, and returns that can be found in social media. These experiences have helped to shape our philosophy as it relates to social media.
To sum it up succinctly: we believe that all efforts should be guided by business objectives and should have measurable returns.
Our philosophy gave birth to a formula that can be customized to match a company’s size and industry, improving the accuracy of the conversions. It all boils down to Social VPM and Social VPC**
We’ll be diving deeper into how we developed the ROI formula for social media during Social ROI – Solved! a free webinar being held Tuesday, July 12th at 2 PM EST, 11 AM PST. During the webinar, we will define this new metric, dive deeper into how we developed the ROI formula for social media and give away a handful of free ROI reports to participants.
On July 12th, no more answering questions with questions. We will have the answer for you. To register, click here.
*Yes, I made this up. Good social media is action inspired by analysis, not the result of magic.
**Want to know more? You’ll need to register for our webinar!
When she’s not working as a marketing manager for Make Me Social, Mandi Frishman enjoys throwing glitter in the air to support the internal (it exists in her mind) Positivity Policy. During her time studying at The University of Florida, Mandi became convinced in the power of learning through play. She has since committed herself to playing (and learning) all day, every day.