Calculation of ROI in Social Media, a variable not only economic

Calculation of ROI in Social Media, a variable not only economic

Until the arrival of the Internet ROI was a concept closely linked to business and without any other connotation, a formula through which the data that placed the investments made in any project under the denomination of profitable or not could be obtained. It is more than evident that any brand needs to know the results of an investment And, although the consolidation of online businesses has facilitated the monitoring of the different actions, it is true that measuring the return on an investment specifically in advertising and marketing campaigns continues to be one of the main unresolved objectives in its totality, by brands. In order to be specifying and focusing exclusively on the analysis of the efficiency of the expenditure made, the ROI formula contemplates the following combination of variables. (Investment gain) / Investment But reeling off the concepts a little more, we could establish that ROI is consolidated as one of the essential and indivisible variables of the social Web, its linking and analysis is totally necessary in order to ensure that businesses are in constant development and mainly due to the advances and the different stages through which the network passes, brands are prepared to measure their ROI in social networks through of the specific indicator of business consolidation and brand expansion. In essence, ROI must be extrapolated from its eminently economic definition so that it can measure the efficiency of different brand strategies, as well.

Tangible and intangible variables, ROI much more than economy

In this way, we find a way to analyze ROI from a perspective closer to the social economy where the investment variable is consolidated as a set of dedication times, use of tools and active participation of people. For its part, the term profit refers to a set of actions that cannot be measured in a tangible way and among which we find reputation, commitment to quality, loyalty, presence in the network and the construction and maintenance of permanent trust.

ROI and IOR the key is in what is not easy to measure

Although these variables already tell us about an ROI that cannot be measured in purely mathematical or statistical terms, there are other variables that further complicate obtaining the ROI of an investment specifically in actions encompassed under the protection of online marketing. More complex measurement we can analyze them if we study the concept in reverse order and analyze the impact of the relationships, quantifiable and based on four essential items.

Relevance of content, brand reputation outside of social media‚Äď Followers, number of followers who actively participate in the consolidation and propagation of the brand. Active participation, interaction of consumers with brands, actions aimed at spreading these and ability of brands to attract the largest number of users that are integrated into the social network that surrounds the brand on the network. Traffic and visits, obviously one of the paradigms of success on the Internet, as we have already commented several times here, in Traffic to Web portals from social networks is one of the most efficient variables for measuring the efficiency of an online marketing campaign.

Thus, while ROI refers to the efficiency of brand investments in the broadest economic and statistical sense, IOR is linked to people and the impact of actions and relationships on final sales figures.

But how is ROI definitively calculated on investments in social networks?

Although it is true that the intangible nature of the variables that comprise it certainly complicates the calculation of this essential variable, it is also true that identify an increase in sales following the launch of a social media marketing campaignIt should not be very complex and if it is totally tangible. One of the most complicated aspects in relation to the quantification of benefits, is to identify the variables used in the calculation of the return on investment.

Risk, benefit and cost

The breakdown of the return on investment calculation must be carried out taking into account three fundamental concepts; risk, cost and benefit.The combination of two tangible elements; cost and benefit, allows us to identify and quantify an intangible variable; Risk, undoubtedly one of the most relevant when calculating the ROI of an investment.In essence, risk is defined as the path that a brand must travel and the public exposure it must undergo to reach its target audience and from there begin to evaluate the efficiency of the investments made. Thus, taking the tangible and intangible variables in order to achieve the most efficient calculation of the ROI and closer to reality, we can establish the following analysis guideline: – Daily visits in the corporate portal – Number of visits that become final sales – Average amount of consolidated sales – Profit obtained with them – Time spent updating the corporate portal – Associated costs (personnel expenses, mainly) However, despite To be able to concentrate the ROI calculation on specific, easily identifiable variables, it is possible that a corporate portal with many visits does not report economic benefits. Let’s see … why?

Value of the corporate portal = daily visits * (advertising revenue / 1,000) / time spent * costs associated with updating content.

Through this formula we will obtain a more social ROI, which contemplates intangible variables and which will become more profitable as the final result exceeds 1. Now, it is convenient not to lose sight of the intangible variables, it is true that the financial results are those that are close to the sales figures through which the success or failure of a project is analyzed, however, currently, it is essential to take into account the variables that indicate trust, mainly due to the efficiency that this contributes to the long-term brand consolidation.

Online marketing in social networks and ROI, new paradigms in the calculation

Strictly speaking, the calculation of the ROI under the parameters described above yields really accurate results, however, it should not be forgotten that investments in online marketing campaigns for social networks, underlie the complexity of the measurement of totally intangible elements. free social media, the interaction of people and non-quantifiable resources, make it difficult to measure and calculate an efficient ROI but, let’s try to evaluate the types of resources that are used in an online marketing campaign: – People – Technology – Time and To analyze and transform these variables into figures, we must become aware that planning, compliance, evaluation and repetition are essential variables to measure the resources allocated in terms of time, people and technology. Finally, it is essential to realize that ROI calculation can only be carried out efficiently, when commitment to quality, constancy, perseverance and the pursuit of reputation, within the primary objectives of any business plan and associated investment, so ROI is no longer an eminently economic variable and today, it is impossible to separate it from its more social edge.