The ROI in Social Media?

Posted on September 7, 2011


Involved in social media?  Having trouble tracking the bottom line?  This article from “The Daily SEO Blog” sheds some light on the value of social media and how to measure its value.

Social media receives a massive amount of attention on the web and attracts a great deal of interest from marketers, too. The primary complaint of those who invest seems to be consistent: it’s hard to measure the impact to the bottom line. On this point, I must concede – while social’s an exciting new area for online marketers, its value isn’t always commensurate with the effort required and even when it is, it’s tough to prove that point to clients or executives asking for justification.

This post is here to help. In it, I’ll try to take a brief look at the topics surrounding this problem and offer some solutions, tools and methodologies to make things easier.

Why + Where Social Matters

Social media has an analytics problem. Whereas many other sources – ads, organic search, referrals, bookmarks – all drive traffic that directly converts (i.e. results in a purchase/signup action), social traffic is very temporal. Visitors from Twitter, Facebook, LinkedIn, Google+, StumbleUpon, et al. are known to visit a page and quickly depart. This leaves marketers struggling to understand the value of these channels. High bounce rates, low browse rates and awful conversion rates make social the black sheep of the referring traffic sources.

I’ll try to explain the problem, and the reason why social still matters, despite these poor metrics, in visual form:

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