Return on Investment for Social Media

people before profits
Originally uploaded by papagoiaba

By Richard Dalke

A recent report that I have read from Dell this week has shown that they have made $3 million dollars from twitter referrals. This is an impressive statistic due to the fact that twitter is not very labour intensive. There are similar successes reported by various other businesses as well, but is it really that easy to measure the benefits of participating in social media activities?

Companies seem to be quick to look at sales figures but the relationship benefits of social networks should gain as much advertisement when trying to explore the benefits to business of integrating social media marketing into their business processes. If you just focus on sales does this not turn social media into just an advertising tool?

There is a presentation created by Mzinga that shows some benefits of social media participation for business:
- Extend brand visibility
- Increase revenues and drive efficiencies
- Elevate customer satisfaction
- Increase productivity
- Manage risk
- Speed time to market
- Gain direct access to business research

These are some of the benefits of social media that will over time create a financial advantage but will not be instant. You can therefore also make the point that social media is a great deal more than sales tool to generate profit and should possibly not be thought of in terms of ROI but instead be thought of as a way that companies can become more efficient in their collaboration with customers and their objectives.

Companies should be clear about what they would like to achieve from their participation in such social media networks and then measure their success over a longer period of time as their brand develops and not ignore the fact that participation in such networks might not just increase you sales but develop your brand and adding value to it over a greater time scale.