Social Media Return on Investment
Social media is wonderful because, for the most part, it’s free! However, social media requires a significant investment of time and energy so it’s not quite as ‘free’ as it seems. Therefore it’s important to think about the return on investment (ROI) of using social media as a tool within your organizational strategy. Here are a few quick and dirty facts about social media so that you can begin to see why having a social media presence for your organization is worthwhile:
- In the U.S., social networks and blogs reach nearly 80% of active U.S. internet users and represent the majority of Americans’ time online. (1)
- 73% of online adults use a social networking site of some kind, while 42% use multiple platforms. (2)
- More than ever older internet users are flocking to social networking sites to join in the conversation. In fact, the most significant growth among these sites in the last several years has been among adults aged 50 years and older. (3)
- 81% of small and medium-sized businesses use social media. (4)
- 89% of businesses report that their social media efforts generated more exposure for their business. (5)
- 75% of businesses saw an increase in traffic to their website as a result of their efforts on social media. (6)
- 69% of businesses use social media to increase the loyalty of their fans and customers. (7)
- 51% of Facebook users and 64% of Twitter users are more likely to buy from the brands they follow. (8)
In order to define the ROI of a tool, you must first have a clear understanding of its purpose. Let’s use a screwdriver as an example. A screwdriver has a pretty clear function and is used primarily to screw and unscrew screws, therefore measuring its ROI is pretty straightforward. However, if you were to use a screwdriver without a clear understanding of its purpose and function and without clear goals you’d be a bit lost. A screwdriver’s main ROI is time and necessity because having a screwdriver saves a lot of time, and without one you can’t do much with screws.
Because social media is a tool, determining its ROI depends on how you’re using it. Unlike a simple screwdriver, social media is a very complex tool that meets different needs for different users, so measuring ROI is much more difficult. However, with a clear understanding of the purpose of social media, and clear goals about why your organization is using social media, ROI can be estimated. Though a monetary return can be calculated based upon, for example, new clients secured through social media, the general consensus is that it’s more worthwhile to measure impact (i.e. engagement) on social media, as opposed to monetary return.
Get started measuring your ROI with these resources:
- 10 Questions to Ask Yourself When Measuring Your Social Media ROI
- HOW TO: Measure Social Media ROI
- How to Estimate Your Social Media Return on Investment
- How to Measure Social Media ROI
- 14 Social Media ROI Metrics You Can Use Right Now!