The Internet Drives Our Thirst For Narrative.

Every business, foundation, technology and especially every brand, requires a story.
People remember story long after they have forgotten the product.
All good salesmen know this.

Social Media ROI

Today, some of the largest brands worldwide are using social networking platforms to become part of the conversation both on and offline, interacting with a massive community of users. For this reason marketing types are interested in defining the ROI

[This is for the, “If you can’t measure it …”, school of engineers as executives. – Doug]

Google on measuring ROI from Social Media

Average lifetime value of a typical account x expected new lead close% = LEAD VALUE

Next, calculate whether your social media efforts are paying off. Here’s an easy-to-use method. Choose a consistent time period for each calculation (monthly, quarterly or annual):

  1. Hours invested in social media activities x average hourly rate = SOCIAL MEDIA COST
  2. Social media cost ÷ target contribution margin% = BREAKEVEN
  3. Number of social media leads x lead value = SOCIAL MEDIA GENERATED REVENUE
  4. Social media generated revenue ÷ breakeven = SOCIAL MEDIA PAYBACK INDICATOR

If your social media payback indicator in step 4 is greater than 1.0, you are on track to experience a positive return on your investment.

Is Facebook the frog in the pond?

Facebook: “In a digital world fueled by social media, the prospect of translating large social networking audiences into solid earnings presents more possibilities than disappointments.”

[Very Zen: “Little onion, life is filled with more possibilities than disappointments.” – Doug]

Twitter states, “We are finding the brands that most effectively embrace these new opportunities are able to drive return-on-investment levels that compete with television in brand building and with search on performance. This combination, along with the scale that is represented, is a new and exciting world for advertisers, and we are just seeing the beginning of the opportunities that will exist.”

[Or is investing in Twitter like investing in FM radio at the dawn of television. – Doug]

Social media with its scale represents another new frontier for PR, advertising and the rest of an expanding marketing mix.


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