ROI & effectiveness of Social Media marketing

March 1, 2009 at 6:08 pm 7 comments

With individuals, corporations and governments beginning to use Social Media for marketing their products and services, the question that is being asked is “What is the ROI and effectiveness of marketing using Social Media?”

ROI can be gauged in different ways. Through generation of revenue, through increase in the size of your community or reach, through a better understanding of your customer or your community, through the increased communication and interaction between people with similar interests, through the sharing of knowledge and resources, through the development of clusters and through an understanding of the needs of your community, your constituents or your customers and friends.

Carlos Cashman gives his perspective at the P@SHA Startup Insiders session at LUMS that was sponsored by Sofizar.

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7 Comments Add your own

  • […] This cup of tea was served by: In the Line of Wire […]

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  • ROI & effectiveness of Social Media marketing…

    With individuals, corporations and governments b …

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  • 3. Adnan Ali  |  March 1, 2009 at 11:11 pm

    This is a big question right now and as Carlos said it is probably work in progress.

    In my experience, the value of Social Media Marketing is in the goal that it is assigned. If the goal is to make more money, I am sorry, any effort to measure the effects of SMM will fail. But if the goal is “participating in the conversation”, then you have ways to measure the effect of SMM. Metrics like number of comments, percentage of positive/negative comments, number of feature ideas crowd sourced via SMM, ROI of these new feature ideas etc. can be used to judge the quality of SMM.

    Share of voice, behavior shift, and expanding reach are also ways to monitor ROI of Social Media Marketing. But, in the strict mode of business results, there is still no answer and I contend that there is none to be found. Social Media Strategists like myself have an obligation to educate C-Level executives to think about Social Media Marketing in a different way than traditional visits and clicks view that web analytics tools are providing on their desktops.

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  • […] Jehan Ara (President PASHA) wrote a blog post inquiring the ROI and Effectiveness of Social Media Marketing.  […]

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  • 5. Axel Schultze  |  March 2, 2009 at 2:31 am

    Hi Carlos –
    yeph, it’s a rather challenging concept. Therefore we tried to develop a financially acceptable solution. The Social Media Academy worked on a research to identify a method to calculate ROI that is mathematical correct (currency on both sides of the equation) and is relevant to a CFO.
    CM / IC = SM-ROI
    You find the details here: http://xeeurl.com/A0567
    And a discussion on Social Media Today here: http://xeeurl.com/A0568

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  • […] Read more:  ROI & effectiveness of Social Media marketing « In the Line of Wire […]

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  • 7. kiran  |  March 4, 2009 at 10:59 pm

    Good article on ROI…Thank u.

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