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How to measure the ROI of social media

Posted: March 31st, 2011 | Author: admin | Filed under: Uncategorized | No Comments »
Social is definitely in fashion. All of a sudden everything from search through to e-commerce is proceeded by the word „social‟. Of course, the leisure industry knows better than most the power of social, after all personal recommendation is still the most powerful form of advertising, with word of mouth contributing to a large part of any venue‟s customers. Our collective desire to know what our friends are doing has fuelled the meteoric rise of countless social networks from MySpace and Bebo, to Facebook and Twitter, not forgetting Youtube and Flickr. It is no wonder that every business has scrambled to benefit from this new form of digital recommendation and climb on board the social bandwagon.
Now in 2011, as everyone takes long hard looks at their budgets, the need has never been greater for leisure groups to validate and measure the benefits delivered by their increasing investment in social media and digital marketing. However, before going headlong into number crunching, it is important to realise that whilst the size of a company‟s online social reach is a reflection of the level of social media participation, it is not symbolic of brand stature, resonance, loyalty, or advocacy, nor is it an indicator for business performance.
Social media marketing delivers a wide range of benefits to organisations that are beneficial in the short term and long term in both quantitative and qualitative ways. To properly value the impact of it‟s social media marketing investments, leisure groups must align their objectives, metrics, targets, and strategies across four perspectives:
 Financial – has revenue or profit increased or costs decreased?
 Digital – has the company enhanced its owned and earned digital assets?
 Brand – have consumer attitudes about the brand improved?
 Risk management – is the organization better prepared to note and respond to attacks or problems that affect reputation?
Using a Social Media Marketing Balanced Scorecard, marketers can evaluate a diverse set of short and long-term benefits that are both financial and not. This approach furnishes several benefits, such as aligning measurement to all corporate objectives and not just sales, providing a means for gaining consensus from diverse stakeholders and avoiding short-term gains at the expense of long-term brand health.

Social is definitely in fashion.

All of a sudden everything from search through to e-commerce is proceeded by the word ’social’. Of course, the leisure industry knows better than most the power of social, after all personal recommendation is still the most powerful form of advertising, with word of mouth contributing to a large part of any venue‟s customers. Our collective desire to know what our friends are doing has fuelled the meteoric rise of countless social networks from MySpace and Bebo, to Facebook and Twitter, not forgetting Youtube and Flickr. It is no wonder that every business has scrambled to benefit from this new form of digital recommendation and climb on board the social bandwagon.

Now in 2011, as everyone takes long hard looks at their budgets, the need has never been greater for leisure groups to validate and measure the benefits delivered by their increasing investment in social media and digital marketing. However, before going headlong into number crunching, it is important to realise that whilst the size of a company’s online social reach is a reflection of the level of social media participation, it is not symbolic of brand stature, resonance, loyalty, or advocacy, nor is it an indicator for business performance.

Social media marketing delivers a wide range of benefits to organisations that are beneficial in the short term and long term in both quantitative and qualitative ways. To properly value the impact of its social media marketing investments, leisure groups must align their objectives, metrics, targets, and strategies across four perspectives:

  • Financial – has revenue or profit increased or costs decreased?
  • Digital – has the company enhanced its owned and earned digital assets?
  • Brand – have consumer attitudes about the brand improved?
  • Risk management – is the organization better prepared to note and respond to attacks or problems that affect reputation?

Marketers must learn to evaluate a diverse set of short and long-term benefits and not concentrate solely on the financial aspect.  This approach furnishes several benefits, such as aligning measurement to all corporate objectives and not just sales, providing a means for gaining consensus from diverse stakeholders and avoiding short-term gains at the expense of long-term brand health.