So do we talk about the ROI of social media or KPI’s? Do you know the difference? The difference is similar to the difference between an advertising agency and a company that focuses on marketing. Or better yet, Heinz Field and PNC park.
From a purely definitive standpoint ROI is pretty basic, ROI = (X ‚Äì Y) / Y, If you invest $10 and get back $30, your ROI is (30 ‚Äì 10) / 10 = 2 or 2 times your initial investment.
Now let’s apply that to social media. Having solid goals and a realistic baseline measurement is crucial to figuring out your social media ROI.¬† So before you set out to measure and monitor your social media returns, you need to have a clear idea of what it is you want to accomplish. <—-Isn’t this something you would do in any business situation?
So once you have your goals defined, you need to gauge the baseline for your levels before starting or changing your social media strategy. For example, if your goal is to increase social media mentions of your company, in order to measure the ROI of any actions taken toward that goal, you need to know where you stand now. You can‚Äôt evaluate the ROI accurately without a baseline. If the baseline is zero, so be it.
Now KPI’s are completely different in that you’re tracking and making sense of interactions, which is a fundamental part of social media. Many of these metrics are factored into the notion of “Key Performance Indicators” and in the same way you can score different interactions to create some kind of interaction index, each one has it’s own merit. For instance here are 15 fairly common social media KPI’s.
- Email subscriptions
- Forward to a friend
- Social media shares / participation
So what are the KPI’s that you are using within your organization to measure your social media interactions?