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Social Media ROI

March 20th, 2010 by Bob Bly

This week’s post is not my commentary. It is a plea for help, a request for information, from you my blog reader.

My problem is I have to write a column on measuring return from social media — and, I am ashamed to admit, I don’t know squat about how to do it.

Are you an active social media user on Twitter, LinkedIn, Facebook, MySpace, or other, more targeted sites?

If so, do you track ROI? How?

If you do not measure social networking ROI, why do you spend time doing it?

I’m also curious how many hours a week you spend marketing yourself with social media.

I really want to know, and my readers do too, I believe.



This entry was posted on Saturday, March 20th, 2010 at 10:14 am and is filed under General. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

70 responses about “Social Media ROI”

  1. New Media Panel and Panel Manager XPERIA « said:

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  2. Yolander Prinzel said:

    There is no one way to measure ROI and ROI can manifest itself in ways that you wanted as well as ways you didn’t even think of.

    Sales: If you have a product to sell, you can always measure the amount of click-throughs to your site that came from your social networking platforms and how many of those ended up buying your product. Of you can add a field that asks each buyer how they heard about your product.

    Traffic: If you want your return to be increased traffic then you should measure the amount of retweets you get on Twitter, mentions on Facbook and LinkedIn and measure the resulting traffic to your site.

    Visibility: If you want to become more visible to potential clients but your product or service can’t be sold just from clicking through to your website through Twitter, etc. then you can track the amount of inquiries you get that come from people who have seen you or been referred to you based on your social networking. Since scoring these clients is not the goal of your social networking interaction but being visible and “found” is, your ROI could be the number of contacts you get or the potential budgets of each project that you get an inquiry for. In this example, ROI would NOT be measured by actual sales or scored gigs.

    Improved reputation: If you have a product or service with no image or a bad image you may want to use social networking as a way to improve that image. To track your ROI, you need to set up Google Alerts to see when you or your product are being mentioned and search for the same keywords on Facebook and Twitter to watch what people are saying and make sure it is positive.

    I believe the most important part of tracking ROI in social networking is to keep track of ALL the above stats and watch them change. It’s easy to create graphs in Excel that track all of that info–and with the consistently changing nature of social networking it is necessary because what works this week may not work next week. It’s also important that you always find out where your incoming business, clicks, calls and emails are coming from. Always ask someone—you won’t know what is working if you don’t ask.

    I spend about 30-60 minutes per day on social networking for each client who wants that service. I spend about the same amount on myself but I’m not nearly as organized with efforts on my own marketing as I am with clients’… I guess it’s the cobbler’s shoes syndrome.

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  6. Luz said:

    I spend a lot of time. I am in the process of launching my first product and still researching and studying the fascinating unprecedented elements that Social Media provides in such a different way than any other media ever before. I worked selling tv and print advertising. I would love to have a telephone conversation with you about that. Actually I was among the first 100 twitters and fb, visionaries and storytellers after 6 months of really building relationship and giving value. Poured my soul there. Thanks for what you are doing.

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  8. I.A. said:

    I think the guys you’ll wanna ask are Perry Belcher and Ryan Deiss, they got a super high end product on Social Media… Belcher is said to have Twitter followers in the six figure range, whether or not this is completely legit I can’t tell, but sure looks impressive.

    My friend sells Arabic female clothing on Facebook, through connections with other people with Facebook accounts and she tells me sales are there… but slow.

    I’ve got another friend who sells women jewelry and Indian costumes who knows of “fan pages” of companies which exists ONLY on Facebook, no website, no physical store front, just Facebook.

    I believe Tila Tequila got famous off her MySpace account, she’s got her own t.v. show now “A Shot At Love With Tila Tequila”

    Then there’s the case of Marie Digby who looked like a super cool amateur who was suddenly discovered by a major record label until… it was “outted” that she was already under a Disney contract.

    But does that mean she didn’t sell 18,000 copies of her album which was created due to the fanfare over the talent she displayed on her Youtube videos??… nope.

    People bought her stuff.

    Personally, I don’t think social media is too powerful in terms of getting people to take out their wallets, “On the internet, people are desperate for connections and content…” Gary Halbert

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  10. dava said:

    As Yolander said, there are plenty of statistics out there, and you should pay attention to them with your goals in mind. It’s also useful to think of social media as you would think of attending a networking breakfast or even a cocktail party. You just talk to people. You find out what they do and what they need. You help where you can. You make friends. They trust you. They buy your stuff.

    It does take time, especially Twitter, because conversations and relationships take time. You can’t build trust by constantly blasting out what you’ve got for sale. Personally, I keep Twitter running most of the time, and jump in and out of the conversations. I manage fan pages on Facebook for 3 clients and spend probably an hour a week on each one.

    There are so many creepers out there taking advantage of people who have honest questions regarding social media. If anyone tries to sell you anything (an ebook, a whitepaper, a seat at a conference) that promises to turn you into a guru, avoid them like rotten eggs.

    The only real way to learn about social media is to throw yourself out there and find out what it’s about. Maybe you’ll hate it and see no purpose. Maybe you’ll make some friends willing to buy your stuff.

  11. Pamela Kock said:

    I’m new at social media marketing myself, and I’m really glad you asked this question. I’ll be checking back to see new answers!

    The way I see it, all genuine marketing efforts do pay off, if only in terms of “karma.” You put the energy out there, and it comes back to you–often in unexpected ways, and often in completely unrelated ways! It happens to me all the time, and it’s kind of mystical.

    Also, marketing efforts can sometimes take a really long time to pay off. I’ve gotten gigs from people I met years ago and nearly forgot about.

    Makes me wonder how much more business I’d get with a better plan of keeping in touch . . . hey, social media is perfect for that!

    The only pitfall I see is using it as your *only* marketing plan, which can be tempting because it’s so easy.

  12. Paul Krupin said:


    I can tell you that creating meaningful metrics is hard since your goal is to end up with something that allows you to systematically make an adhustment that poroduces a change you can say come3s diorectly from the action you took.

    Let’s just say you track time online vs. dollars made per month. That’s a reasonable metric. You can then say and test the idea that if you double the time online, you can see the effect on dollars made that month. That assumes no other changes influence dollars made.

    What about other metrics?

    Length of copy per post vs sales in a month

    Number of helpful posts vs sales in a month

    You need to select metrics that you can control what you do by management decision and evaluate the effect it has.

    My issue with social marketing is that it is very difficult to produce a definite behavior or pattern that one can reliably use to assess and document the systematic effect it has. A million friends on Twitter who spend very little on your products or services is not as valuable as ten clients a month that give you $2,000 each.

    You can create a communications process with steps that you can control how many prospects are generated and what you can say and do to convert prospects into paying customers.

    With social marketing thius is still doable, but to do it systematically means you have to control the environment and the messaging very carefully, which is not easy to do.

    You have ot select and use metrics that matter. This is necessary. If the metric doubles, you should be able to know in advance what this tells you and means to you. If it halves, then this must also give you meaningful data that allows you to decide to act a different way.

    If it tells you nothing and doesn’t help you decide what to keep the same or change one way or the other, then the metric is really useless and there’s no point in even using it.

    I’ve written extensively about the pesky Twitter ROI question a number of times – here’s the link if you want to read more:

  13. Grace Cherian said:

    Hello Bob,

    I’m just learning to use social media myself. I often ask the very same question. What’s the point of spending so much time on social media?

    Christina Warren has written an article on ROI from social media which may be helpful. And she has included an amusing slide presentation by Oliver Blanchard.

    The site is:


  14. Apryl Parcher said:

    Hey Bob:

    Jumped in late to this conversation, but here are my two cents. Judging from my studies on the subject, the problem with measuring ROI in social media is that people get all excited about the number of eyeballs (followers/fans), and everything else goes out the window. You and I both know that’s NOT where ROI lives. It’s in actual conversions /sales.

    There’s a handy graphic I found in an Olivier Blanchard slideshare, “Basics of Social Media ROI,” which shows how social media elongates the ROI equation. Between the beginning investment and the end result of financial impact lie all sorts of sexy things like action, reaction, and non-financial impact (all the hoopla over fan numbers and brand sentiment). Having a zillion followers or fans, however doesn’t mean a thing unless you interact with and engage them in a meaningful way, so you can get them into your sales funnel.

    Companies that get this concept have learned that social ROI measurement lies in the results from true engagement and conversation (Return on Influence). Avaya, for instance, attributes a $250K sale on a specific Twitter query–so yes, it can be measured. And other companies like Dell, Toyota and Starbucks have made measurable gains in the social media realm by engaging their customers with coupons, promotions, polls, video and other interactive tools that get those followers to ACT. Plus–pointing those fans to lots of good, juicy, meaningful content, and using the social channel to facilitate good-ole customer service.

    Lots of direct response goes on here as well in social content(especially on facebook pages and youtube channels), but with one big difference.
    It’s important NOT to use social media as a broadcast medium (which users hate), but use it to LISTEN to what your customer wants.

    That means you can’t measure things in quite the same way. The road is longer. Successful companies learn to measure the sentiment in social channels on their keywords, company name and product. They then use what you learn to devise a social strategy that ties into their overall marketing plan, complete with daily, weekly and monthly tasks tied to measurable goals.

    The key word here is PLAN. Social media isn’t free–it requires a commitment of time and resources. And jumping into anything without a concrete plan is a waste of time.

  15. Pamela said:

    So, Bob, it appears that the answer to your question of “does anyone know how to quantify the ROI of social media?” is NO,according to the current blog responses. I almost lapsed into unconsciousness on a few of the babbles. Not one of them mentioned your book, Blog, Schmog which is the epitome of practicality for the person trying to make a living on the Internet. Vague, touchy-feely, getting-to-know-ya interaction will never put steak on the table. Remember, no human being ever really wants to open their wallet for anything and that 90% of everything is crap.

  16. John Zajaros said:


    I “stumbled upon” your question after reading an email. I am a subscriber.

    Social media is a waste of time for most people, it simply does not convert in the way most would like it to, putting money in their bank account based on throwing a few links on a “tweet,” “post,” “comment” or whatever.

    I did a study a while back over several days and 85% of all “tweets” (I still can’t believe I use that word) have links. In fact, 8% offer 2, even 3 links in a single message.

    Most people simply “shout (or piss?) into the wind,” hoping that something will convert. It rarely, if ever does.

    People are fond of pointing to Dell’s 3 million, the amount they attribute to social media exposure. The fact is, Dell has their brand established and they are, well, Dell! They would have done most of that business through another marketing channel anyway. Ultimately, how can they really track that? They can’t! The issue is too complex.

    Interestingly, and recently, others point to the affect of social media on March Madness viewership. Again, it is preposterous to assume that social media, in and of itself, had a significant bearing on the overall viewership and/or profitability of March Madness. People already interested in, engaged in, March Madness talked about March Madness. They probably would have anyway. I would argue the majority could probably have cared less. Even if it did attract a few more curious visitors, how would they track that? They can’t. Did they spend more money because of it? I would argue against it.

    I use to track every link I post. I also track every comment with a link to its source, an affiliate program, my blog, whatever. So, if I am promoting a product of service, something I rarely do any more, I track the “tweet” from the time it is posted, through, and on to the affiliate program. The affiliate program then will tell me if they opted-in, if they made a purchase, and, ultimately, if all of the above paid off in money in my account!

    Unfortunately, because most people rarely make a buying decision on the first visit, even tracking all of the above through to a sale is often impossible.

    Significantly, most people using social media use it in the way I have described above…in hopes of a big payoff. It doesn’t work…period!

    The real value of social media for the novice or “newbie” (I hate labels), and even for the “guru,” is in “brand awareness” or “establishing one as an “authority.” Recognition, of sorts.

    The people who really gain from social media do so by engaging with others, establishing a “tribe” or at least a “following,” a subscriber base, and building credibility and authority over time.

    That works!

    I have done it and it converts (i.e., puts money in my bank account). However, even that is difficult to track and the ROI is over the long term, more about establishing an unknown in a niche, rather than an immediate sales vehicle.

    I hope that helps. It is more complex than above…but I don’t want to put anyone to sleep or have them “lapse into unconsciousness.”

    finally, social media is being used improperly by the vast majority of user, particularly in the marketing space. ROI is about long term brand awareness and building a subscriber base… not about the quick buck!

    Hope that helps somewhat?

    Professor John P. J. Zajaros, Sr.

  17. ryan anys said:

    I’m amazed at how far-reaching Social Media has become. Simply scratching at the surface seems to open a torrent of information and possibility.

    I think the reality of Social Media as a marketing vehicle is the same as any other marketing format. You have to determine your target audience and test to figure out what works. Simply throwing up a Facebook Fan page or creating Twitter account doesn’t equal sales or a return of any kind. The best example I’ve seen of “real” returns are small business client’s of mine that advertise events almost exclusively to their Social Media base. This echoes some of the sentiment express above, in that Social Media appears to be most effect in terms of raising awareness. But I think things are going to change and “awareness” will only be the tip of the iceberg for Social Media.

    The “marketing” aspect of this medium is in it’s infancy, but I believe it holds the promise to reshape marketing an the internet in general, with the potential to become as important as the internet itself.

  18. Perry Belcher said:

    Hi Bob, ROI is funny thing. If you don’t have much on the ball in the first place social med ROI is gonna suck. If you have something really worth showing people I think the roi is fantastic. It’s as close to one on one as we can come over the net. Thanks Perry

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