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0:00
Hi. My name's Julie Atherton
and I'm the founder of
the social media advisory and
marketing consultancy
Small Wonder.
I write books on social media
and social media strategy.
Today we're going
to be talking about
social media return
on investment or ROI.
0:20
We'll cover the
definition of ROI.
We'll look at the
formula and how
social media ROI affects
marketing decisions
within an organization.
I'll give you an
example of how to
measure ROI and a
tool that you might
find useful if
you're trying it in
practice. What is
the definition?
0:40
Return on investment or
return on marketing
investment is
a metric that's
usually expressed as
a percentage and shows
the level of revenue
in relation to the money spent
generating that revenue.
In acquisition, sometimes it
can be a negative
percentage where
organizations are investing in
bringing new people
into the organization.
Generally though,
when we're looking
at activity with
existing customers,
we want to see a positive
return on investment.
We can also compare ROI by
marketing channels to make
decisions about which channel
gives the best level of
return and therefore
where we want to invest
more money and where
we want to pull back.
Although ROI is useful
other considerations
that are also important.
Some channels may
have a good level of
return but offer limited
numbers of potential customers,
i.e, they bring in a high
level of return on investment,
but they might only bring in
hundreds instead of
thousands of customers.
If we're trying to
reach large audiences,
it would be more
important to get
a lower ROI and reach
those customers.
Additionally, some
channels might
not provide access to
specific customer groups.
If the business wants
to target them,
they may be willing to sacrifice
ROI to reach the actual
customers that they need.
