There is a question that comes up regularly in conversations with business owners, their marketing departments, and the agencies hired to promote their company or products: “What is the ROI?”
It’s a fair question. It’s the ultimate question of all business. Literally, “Return On Investment (ROI)” is a principle all businesses must heed in their endeavors. The cost-benefit analysis of buying a piece of equipment in a factory can be calculated. Sales in an organization should be able to be tracked to a lead.
When it comes to professional services such as consulting, marketing, and public relations, there are also metrics that can be monitored. In the digital marketing realm, almost everything is measured.
The question “What’s the Real ROI of Social Media,” was the topic of discussion recently as the Social Media Club of Portland hosted the first in series of “#PDXchats” open forums. The Social Media Club of Portland is part of a worldwide non-profit professional organization.
I have been attending Social Media Club events in Portland since the inception of our local chapter. We have some of the brightest, most talented, B2C and B2C digital strategists around. The social media practitioners in Portland are second to none and I’m proud to be part of such a vibrant community.
This week’s discussion was a great one. Some basic principles were identified, not the least of which is that the ROI of doing nothing is zero. A finer point: You need to know the value of a lead for your business to calculate an ROI. The question was also asked: What’s the ROI of traditional advertising?
Was the ROI of social media answered in the Portland event? That covers a lot of ground, but “yes” there is an ROI to public relations, digital marketing, and social media. It’s real and it can be quantified. The metrics of establishing an ROI depends on the business, its goals, and the scope of an engagement.
Note: A similar version of my thoughts on this topic appeared earlier on another site.