Posted January 31, 2012 3:48 pm by with 12 comments

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We’ve been saying the same thing for a while now. Everyone knows social media marketing is good for business, but no one has a surefire method for quantifying the results.

To get around this, most marketers make themselves feel better by saying that social media marketing is primarily about brand awareness. This is true and important. Having your name out there is better than not, but awareness alone doesn’t pay the bills. That awareness needs to convert into sales and that’s the problem. Not the “getting sales” part but the “measuring sales” part.

Wildfire just put together a new infographic on this very topic. You can see the whole graphic when you click here. I’d like to focus on one part.

Most marketers are still focusing in on the things they can count, likes, comments and fans. However, an increasing number of marketers are looking at revenue. I don’t have the stats to prove it (if you do, please feel free to link me) but it seems like it wasn’t that long ago that revenue wasn’t even a factor. It was all about collecting fans and creating awareness. Finally, we’re expecting to see a dollar return on dollars spent.

58% of those surveyed by Wildfire said that social media increased sales and partnerships. 41% said that social media helped them cut costs! Maybe because they fired their blogger and got interns to post to Facebook for free?

I don’t know that we’re ever going to find a way to accurately count the dollars derived from social media marketing. It’s not in the nature of the beast. Social media is all about sharing from person to person. It’s about giving info to your current customer with hopes they’ll use it to bring in a new customer. How do you quantify that? Does it matter?

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If at the end of the month, your company made a profit, then keep doing what you’re doing. You may not know if those sales came from Twitter or Facebook but you made your numbers and that’s all that really counts.

  • There’s a great line, I think from Einstein: Not everything that counts can be measured, and not everything that can be measured counts. Nowhere does that apply more than social media marketing. ROI is not a general term for “good results” that can be measured by an improvement in likes and follows–as important as that improvement might be to understanding how to connect with customers. ROI is a very specific formula for calculating financial gains from an investment. Marketers shoot themselves in the foot every time they use ROI as a synonym for “good results”–it just proves to the CEO and CFO that marketers lack strong business fundamentals and can’t be held accountable with a budget. If you can’t legitimately measure ROI today, at least sit down with the CFO and come up with a strategy, even just a starting hypothesis for a) which business objectives would be worth pursuing and measuring in ROI, and b) how social media can best help achieve those objectives.

  • Respectfully, this is simply false. I’ve been interviewing people (small business owners on up to Intuit and Jones Lang LaSalle) using social media to sell thousands and even millions of dollars using direct response techniques. Again, no offense but this stuff is out there. This woman is selling HVAC units hand over fist on Facebook

    It’s easy to measure ROI as sales revenue if you know the technique being used by people who are actually selling with social media. That is…

    1) Demonstrate how your product solves a customer’s problem in ways that…
    2) earns customer response (prospect self-identifies as a lead)… such that you can…
    3) nurture the lead (prompt customer to ask more questions) and convert it to a sale

    Heck, grocery stores are doing it! Harris Teeter pays customers to ask its dietician health-related questions on Facebook. Why would a grocer do that? Because helping customers put out a fire is powerful. Answering questions in an honest, bold way opens the door to make a product or service suggestion. Harris Teeter is measuring ROI as sales too.

    “I don’t know that we’re ever going to find a way to accurately count the dollars derived from social media marketing. It’s not in the nature of the beast.”

    Really? How so?

    “Social media is all about sharing from person to person. It’s about giving info to your current customer with hopes they’ll use it to bring in a new customer.”

    Yes, it is… if that’s all you choose to do with it. If you choose to use it with a game plan in mind (ie. generate a lead and nurture it) like this one-woman marketing team is doing you can SELL with it.

    C’mon Pilgrim.

  • griselda

    Marketing is, by definition, knowing what are you doing, well or badly, in order to improve your sales numbers, so your business. It’s all about this. It doesn’t matter if you are using direct marketing as emails, e-commerce, social medias or whatever. If you are a marketer your job is leading your company to success. You have a budget, your company has a budget, so you CAN’T waste the money by doing unuseful things. And if you do, you are supposed to know it and correct it. So I can’t understand what you are saying, that maybe measuring is not so important….and above all: “If at the end of the month, your company made a profit, then keep doing what you’re doing. You may not know if those sales came from Twitter or Facebook but you made your numbers and that’s all that really counts.”. Com’on, you can not say this to your boss! You can always get a logical approach and give some sense and correlation to numbers ans statistics.
    Anyways, if you don’t have the answer, if this is your “professional philosophy”, why publishing it in a blog?

  • Hi Cynthia,

    Thank you kindly for republishing Wildfire’s infographic about social media ROI. We’re glad you’re taking the time to spread the word about our content, but with the way the picture has been cropped, there is no copyright or creation attribution noted for Wildfire.

    If you could please make sure to link to the mentions of Wildfire in your article, to and link the picture itself to get bigger to this: that would be more helpful to your users and also give Wildfire the credit we’d love to see for this infographic.


  • The thing with social media, particularly Facebook, is that no one has a definite means to measuring how exactly they contribute to a business’ profitability. At most, social media’s impact on branding and customer support has been proven, among other things.

  • The main problem with tracking ROI in social media is that most communities lack a clear purpose. If there’s no real reason for existing, other than having to be on Facebook/Twitter/wherever, then you’ll never be able to measure ROI properly.

    Instead, you should clearly define what you are looking to do on each platform. This will then give you a social ROI and a business ROI. Lets say for instance you want to use Twitter as a customer service tool.

    You can then measure each successful customer issue that was resolved (social ROI), and you can clearly measure the financial benefit of that to your business (business ROI).

    The problem is having a build it and pray approach. Get over that and ROI becomes much easier.

    • Hi Adi. Great point about the need for a clearly defined purpose. I’m not quite as clear on your meaning of social ROI. When you say “ROI” what is your definition of the term? Just curious.

      • Perhaps more alarming is the need to–how many years later– suggest that we need to define a purpose!!!???

  • Jennifer Geisler

    Cynthia, I appreciate the intelligent and thought-provoking read. You state in your article that while it is common knowledge that social media marketing is beneficial for business, it is much harder to quantify the results. You continue to say that marketers are currently focusing on things they can count, such as likes and comments. As the Marketing Director of the Cisco Government Practice, I have found noticeable benefits by incorporating a digital marketing campaign with conferences and events. Digital and social media, such as live video streaming that can be accessed through social media sites, creates an interactive community which allows users to discuss latest trending topics and provides a fun, engaging experience for the user before, during and after an event. This increased participation from the user heightens their interest in the conference/event. This spike of interest gets the user to remember and continue thinking about the event even after it is over. This is the type of return on investment (ROI) that a business wants to see from a conference, tradeshow, event, etc. They do not want the user to forget about the event after it is happened, because then it is a “one hit wonder” and there are no additional benefits to businesses. Thanks again for the article, Cynthia, I hope to see marketing departments realize that there is much more to social and digital media ROI than simple things you can measure.

    • Jennifer–I love your anecdote. You articulate well the value of social media in practical terms–practical terms that are indeed hard to measure. How do you measure “heightened interest” and “continued thinking”, and would it be worth the cost of measuring if you could? Like many intangibles in marketing, those are things we know are valuable, and it seems a little absurd to have to argue that they’re only valuable if you can package them up as a neat metric for the CFO. But–and I hope you’ll forgive me for being a relentless nag on this point in this thread–these intangibles of heightened interest and continued thinking are not ROI. They are intangible, and ROI is, by definition, very tangible, because it’s a value that represents real dollars. In order to be ROI, you’d have to draw a direct line from heightened interest and continued thinking to a dollar value of money saved or money earned. My question is, given your direct experience of the value and benefit of social media in Government Practice, do you have a hypothesis for how to draw a line to money saved or money earned? Does continued interest mean a shorter sales cycle for people who engage in social media? Does it mean a lower cost of marketing because they’re educated without additional resources? Does it mean a higher conversion rate on leads from social media, or a higher transaction value on conversion? These are the points that move the discussion from “ROI” the way marketers tend to interpret it, to ~ROI~ the way it’s truly defined by those who hold the purse strings for marketing’s future budgets. (I am truly interested in your feedback if you have a hypothesis on connecting the dots to monetary value.) Thanks.