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Social Media ROI: How To Calculate Social Media Marketing Return On Investment

Social media marketing campaigns are a completely different animal than any other marketing campaign. The main problem with social media is that you have no tangible elements to measure the return out of the initial investment you make.

If you spend money on advertising, you get money in return. But when you invest in social media, there is no money involved. Social media is free and you are dealing with non-tangible goods like human interactions and conversations, which are all resources that are not easily quantifiable.

Specifically there are three main types of resources you put to use when marketing with social media

1. People The workforce you employ. It may be only you or your team.
2. Technology The social media you use to accomplish your goals.
3. Time The amount of the day you dedicate to social media marketing.
As you can see, it is very hard to state something like "I have four people working twice a week on Facebook, so I can expect to get "x" " There are no guarantees that the response you get from your audience will lead to the exact results you need.

Do not despair though, because with the appropriate strategy you can indeed attempt to make sense of your social media campaign and evaluate the results in the long run.

There is a five-step procedure you can follow to calculate whether your social media investment is producing relevant results

1. Analyze Your first step is to understand your presence, limits and areas of improvements you have when using social media
2. Plan Secondly, you need to establish a clear goal, something tangible you want to accomplish that is based on your analysis. Brand awareness, buzz, inbound links, you name it.
3. Accomplish Third, you need to take action and employ the resources you possess to achieve the specific goal you have set.
4. Evaluate Fourth, after some time spent on your campaign, you need to measure your performance to make sense of what went wrong (eventually) and what is leading you to the right direction.
5. Repeat Finally, when you have achieved some good results, start over and focus your efforts on another goal.
It is indeed challenging to measure your social media ROI and, as stated before, nobody can assure you will get the results you expect. But social media has subverted the rules of marketing. Conversations are the way people want to be engaged these days and they are not willing to go back to the old days of institutional brochures or brands that do not listen to their customers.

If you want to be successful, you do need to jump on the social media bandwagon and this guide is a good place to understand how to leverage in a very practical way the power of social media for your own business needs.