This is NOT ROI:
- The return of my Twitter usage is 2009 is 1,637 followers.
- I increased the page views of my website by 300% on an investment of $120.
- I increased my brand awareness by putting better content on my blog.
The actions above relate to non-financial impact on a business. … What seems to happen is that we take what is a financial term (ROI) and mix it around with investments in media measurement or listening tools or other social media tactics that are a part of non-financial metrics like building relationships, brand management or engagement. While these are all necessary and they do require an investment, the results are almost always non-financial. …
So what is ROI? The accepted definition of return on investment is very straightforward: gain from investment minus cost of investment, then divided by cost of investment. In other words, recruitment, engagement, interactions, listening are all very important pieces of the ROI equation however until that customer or prospect does something (ie: make a purchase) there is no financial measurement.
A very intelligent posting coming to the point on ROI of social media. The financial measurement – with all difficulties around it – will remain an important issue, when justifying investments in social media. This does not mean, that the „awareness aspect“ is not important.