Social Media Optimization and ROI in SMO !

By now I am sure you must be familiar with the term ‘Social media optimization’ but do you know how can you exactly measure your Return On Investment in Social Media Optimization…? No, then let’s begin with …by once again understanding the term…and then proceeding on to the measures that can help you in measuring the ROI in SMO.

Social media optimization can simply be explained as a newer medium of business promotion & branding, which aims at inviting targeted potential customers to the website with the help of online discussions, debates and many more user-engaging activities (and hence showing them their business-product-services etc). Although Social Media Optimization emerged as a form of cyber socialization and online information gathering but now-a-days it is primarily used for business promotion, branding and expansion. Over the years SMO has turned out to be one of the most widely accepted forms of business promotion which allows people to meet new members online i.e. on the forums, listen & voice different opinions and in the due time promote their business.

Well, now that we are clear about social media optimization, let’s move on and understand what Return On Investment in SMO is !

In the last few years, it has been observed that social media optimization has been hugely successful in providing numerous business opportunities to online business owners and for this reason now-a-days most of the businesses find participating in social networking activities mandatory. However, very few of them have realized that conducting social media campaign and participating in media activities can be a business expense which is in the form of time. However, for the companies who hire media experts and professionals for conducting SMO campaigns, the expense can also be in the form of money.

Moreover, you will find it very strange that according to a survey conducted by it has been found that almost 80% of the online business owners have never even calculated the amount of money that goes in conducting social networking campaigns and their ROI on social media optimization. The most common reason for this is that people think, checking Return On Investment on social media optimization is almost impossible as there is no such method by which it can be calculated. This belief is wrong because even Geoff Ramsey, eMarketer CEO once stated “marketers believe that measuring true ROI for social media is difficult,” but this belief is relatively wrong because there are many metrics available with which it can be easily measured.

So the question is, if the companies want to measure their ROI on SMO, then how should they do it?

So here are a few tips which will help you in doing so !

- One of the most common methods is to simply calculate the amount of traffic that your website is receiving from different social media networks.

- Use the simple formula which is ROI = (x-y)/y – here x is final value and y is starting value. For example if your investment value is $ 20 and what you have got back is $ 60 then your ROI on SMO will be: (60 - 20) / 20 = 2 times your initial investment. Though in financial sense ROI is calculated completely in the form of dollars and cents but the capital can refer any form of investment – monetary or not.

- Metrics tool- It is accepted that ROI ? metrics but when it comes to ROI on SMO you can rely on the metrics like traffic counts, social media followers and fans, comments etc. Here, the main idea is not to go by the numbers but to identify what is the reaction of people, what are they ending up with and are they agreeing to what you are saying?

- Google Analytics- it is a free option for the measurement of ROI, but one should never go by the free tag because it can really provide a strong baseline for checking numerous factors like backlinks, users’ activity and many more.

- PostRank analytics- it is a bunch of tools which help in measuring social engagement on other platforms and services. The only good thing about it is that, instead raw numbers you can get to see compliments and comments from other sites that contribute to your statistics. It is also a powerful tool for checking the sentiment analysis.

You can also use tangible metrics form like:

- Number of increased visitors
- Number of returning visitors
- Number of page views
- Average time spent on the site
- Total amount of Adsense revenue &

Intangible metrics forms like:

- Customer satisfaction
- Improved communication with the members and customers
- Quality reviews
- Increased sales and quick brand perception

The above mentioned are some of the easiest ways by which you can measure your ROI on social media optimization.

For information on Mobile Sites/SEO/ SEM/ Web Design/ SMO/ Online Advertising/ Hosting & Maintenance etc, please visit:

Magnon Team @ 02-03-2011

Find under: Social Media  

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