Cerebra

A topic that is gaining increasing popularity and causing much debate within social media marketing is ROI. There is the school of thought that believes it cannot be measured and, like everything in life, the opposing school that believes it can. One of the most frequently asked questions I receive from my clients is on the topic of ROI. Especially within the financial industry - the urge to measure ROI is engrained.

One can easily ascribe numbers to Facebook pages and Twitter profiles and measure the amount of clicks and ‘likes’ that occurred during (and following) a Facebook advertising campaign. The difficulty is calculating the amount of said ‘fans’ on a brand’s Facebook page that are actually converted into something valuable to the brand. I.E. The number of those ‘fans’ that are going to make use of the brand’s products or services as a result of the interaction on Facebook. Does the number of fans on a page honestly reflect the return on tangible investment?

ROI is defined by Investopedia as a measurement used to evaluate the efficiency of an investment, or to compare the efficiency of a number of different investments. In order to calculate ROI, the benefit (return) of an investment is divided by the cost of the investment; the result is expressed as a percentage or a ratio.

As most of us are aware, social media is not a new phenomenon, but rather something that has been going on since the beginning of man. It is in most people’s inherent nature to socialise, with a strong focus on building, maintaining and nurturing a community. It just so happens that it is now taking place online with the use of various platforms. Let us assume for a moment that we are socialising at a party. Someone tells you that you really should be using camera brand X instead of brand Y. If this person has a lot of influence on you, chances are you might seriously consider their suggestions. Socialising is all about influence; it is about creating an image about you that is believable to the observer.

If we replace the word ‘investment’ with ‘influence’ in the definition above, it will read, “a measure used to evaluate the efficiency of influence”. So if socialising is what brands want to do with their communities, shouldn’t they rather measure the return on their influence as opposed to tangible monetary return on the initial investment?

Return On Influence measures the qualitative performance of the brand after the investment has been made, it reveals the truth about the brands tangible performance. If an investment of R4000 on Facebook adverts renders 2000 new fans, influence measures the amount of those new fans that took action or engaged. Here are some Key Performance Indicators (KPIs) that you can use to measure Return On Influence:

* Participation Behaviour
* Brand Stature
* Resonance
* Loyalty
* Advocacy

These KPI’s are qualitatively driven but then again, so is socialising. If a brand is trying to socialise with their community then the above KPI’s should be top of mind instead of a ‘what financial return can we get’ driven mindset. Think of it like this; If you’re only friends with a specific person for financial gain, chances are they will soon feel that the relationship isn’t genuine. The same should apply for engagement on social media platforms. As your Social Move states; the social connections you make through your web strategy are at the core of your influence – it’s this strategy that affects the perceptions, attitudes and actions of your audience. The first product that your web engagement should create is impact. Your impact is relative to your social media influence, while standard ROI seeks to attribute a financial value.