Can You Measure ROI of Social Media Marketing?

An online quipster poised the question: “How do you measure the return on investment (ROI) of social media marketing?” He then answered his own question with “You don’t.”

Fortunately, that’s not exactly true.

As businesses scramble to set up Facebook, Twitter and MySpace pages, analysts are scrambling to discover how impactful their company’s SMM has been. For some, the answer is “we can’t measure this,” but others believe there are statistics that reflect their SMM’s effect.

As Aaron Uhrmacher, the guru of social media, recently said in an article on Mashable, “Social media measurement is one of those topics about which everyone has an opinion, but nobody agrees on the solution.” His suggestion – - as a beginning point – - is to simply decide on what to measure.

What’s Your Social Media Marketing Goal?

If your goal is to increase your reputation–get potential clients talking about you in a positive manner – - then get out onto the social media sites and monitor what’s being said about you.

In a brief run-through searching Twitter, I found some very mean-spirited comments about a specific entrepreneur’s e-mail campaign. At another site, a customer was complaining that it took days for a company’s customer service department to contact her . . . leading her to wonder if she was dealing with a real company or a scammer.

In both instances, a social media point of contact–shall we call it a czar?! - could have reached out to customers via direct message or e-mail and turned a damaging situation into a win-win. After all, social media is about “social” – - building relationships.

If your goal with your SMM is to measure traffic, then setting up a solid analytics program that tracks incoming links will tell you if your visitors are coming from Twitter, Facebook, etc.

Although Google Analyltics are excellent (and free), we also suggest Xinu, a free site that tells how your website is doing in terms of search engines, search engine optimization, social bookmarking, RSS, and other social indicators.

Measuring ROI on social media marketing isn’t a precise science; but what we know for sure is that businesses and entrepreneurs need to have a success metric in mind before jumping into the game.