Kevin Kemp – WSI Digital Marketing Consultant

Microsoft Advertising and Advertiser Perceptions surveyed social media marketers in six countries around the world and found that 74% of them thought it was very important to have a presence on Facebook. The challenge is that many of these same marketers do not feel that the return on investment (ROI) is clearly measurable. This is where I have to disagree with them and feel that they are looking far too deep into developing a mathematical or statistical equation. It starts with the upfront assumptions and metrics you need to set prior to engaging in social media. Understanding why you are engaging in social media will allow you to set your metrics. If I am a B2C business, looking for aggressive growth, and I know that every 1 out of 10 people purchase from me I can build some metrics. If I understand the average sale per customer then I can take my estimated costs and determine what I need to see in sales. While social media does not drive sales directly, it does create them by creating new relationships. For example if I know the average sale is $100, my cost for social media marketing is $1,000 then I need 10 sales. To get ten sales, I will need to increase my new followers by 100 people. Now I factor in my level of growth and I have set some metrics on how many followers I need. This does not even measure customer loyalty, recurring revenue, or any other incremental volume driven by maintaining the relationship. While it may seem difficult to measure, it is more about being comfortable with your assumptions and understanding your business.