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Social Media ROI

I nearly every class I have taken at Emerson the ROI of social media eventually comes up. While everyone is in agreement that it is an important part of integrated marketing communication, there is much debate on how to measure the return on investment of social media. I recently came across an older, but I thought very relevant article in the MIT Sloan Review about measuring the ROI of social media marketing.

The article asserts that effective social media measurement should start by turning the traditional ROI approach on its head. Instead of focusing on marketing investments and calculating returns in terms of customer response, the article suggests that managers should begin by considering consumer motivations to use social media and then measure the social media investments customers make as they engage with the marketers’ brands.

A well-designed social media campaign should drive consumers to engage with a company’s brand. That is why it is important that when marketers develop these campaigns they measures customer investment. Instead of emphasizing traditional objectives like direct sales or increases of market share, marketers need emphasize objectives that take advantage of the distinctive characteristics of social media like  brand awareness, engagement of WOM.

The article also goes on the explain that “the advantage of starting with motivations, as opposed to trying to figure out what social media application to use, is that it makes clear how seemingly disparate applications are actually quite similar if they share the same motivations for use.” This makes the creation of integrated marketing campaigns not only much more organic, but also more responsive to online consumer behavior.

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