Social Media Marketing: The Transparent Expenditure

ROI gears machineryMany traditional marketers will quickly note that using social media marketing to increase SEO is a dangerous venture without the proper measurement for ROI. In fact, that is correct for all forms of marketing and SEO efforts. One of the key components of any marketing venture is a careful, pre-planned analysis of expenditures against goals. The biggest pitfalls for social media marketing is the transparent expenditure of spending time as opposed to spending money promoting good or services.

More to the point, the accepted way to measure traditional marketing is indeed the spring board for understanding the ROI for social media marketing expenditures. In most marketing circles, traditional marketing ROI is measured as:

Cost of creative (including time, printing, and distribution) / Measurable Goal Achievement = Return on Investment in Cost

In this example, the ROI might be measured in the following way:

$1000 for design, printing, and distribution / 500 sign ups = $2.00 per sign up (leads)

Important Note: The measurable goal of achievement is defined by the marketing plan and there should be more than one measurable goal of achievement. So, the example changes significantly if your MGA is changed to the number of leads that convert to a sale.

In this case, the traditional measurement for ROI is:

$1000 for design, printing, and distribution / 20 sales = $50 per sale

social media treesNot too bad if your product or service sells for $100 per item, but if your product is selling for $45 due to a promotion or base price, then you either need to examine your traditional marketing structure or your pricing structure.

The same holds true for social media marketing EXCEPT that most people forget to add in the time expenditure - especially if they are handling it themselves or someone in their company is handling the effort. Additionally, it should be noted that:

Large numbers do not equal measureable results

The goals of social media marketing for the purpose of increasing SEO are different than the goals for traditional media marketing.

However, the formula for measuring conversion is still the same, as long as the time factor is carefully considered as part of the ROI.

For instance, a measurement for ROI might include:

# of hours in social media time * cost per hour / measurable goal of achievement = ROI

15 hours * $50 per hour / 100 sign ups = $7.5 per sign up

focus on goals

If your measurable goal of achievement is changed to exposure for SEO, then the ROI really soars higher. Social media marketing can easily deliver thousands of views per day, and SEO ranking can spiral with increased exposure in article databases, traffic from Twitter love, links in Stumble, and strong visibility in popular blogs. In this case, there should be a deeper ROI measurement intertwined in the SEO plan to chart success.

The transparency of social media marketing is not represented in the inability to measure conversions against performance, any more than one is at a loss to track the results of a well-executed SEO plan. Any marketing plan, whether traditional or social media oriented, must include measurable goals with defined expectations based on a full scale evaluation of all expenditures against gains. Without doubt, a realistic rationalization of time brings an added, eye-opening dimension to social media marketing plans.

For the purposes of SEO, social media is not an immeasurable factor in a marketing plan, even when compared to traditional marketing. Just as a company does not waste time in the creation of traditional marketing materials, the time invested in a SEO program that includes social media to gain exposure should also be calculated into a marketing plan. With a careful eye on measurement, ROI for social media is a stationary factor in the midst of SEO promotion that drives marketing performance.

About the Author: Gabriella Sannino

For the past twenty years Gabriella has held positions as a consultant, web developer and creative director until she decided it was time to open Level 343, an SEO and copywriting company. She fancies herself an Italian rocker, rebel and SEO geek. She loves singing in the shower and keeps a notepad next to her bed.

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