Why Social Media ROI is Illogical


Sometime back, business writers were trying to find out some of the most misused business terms and in their search, they stumbled across the term, ‘Social Media ROI’. ROI basically means “Return on Investment” and is a proof that the marketing strategy efforts that you are making are definitely working. However, many people tend to use the term depending on their specific goals. The returns, which a person get is usually measured in terms of dollars, although you cannot find a single easy way to measure social media ROI.

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Is the Social Media ROI Illogical?

Many people on social media are fond of using the phrases, ‘Social media provides ROI’ and ‘Social media doesn’t provide ROI’. The reality is, social media marketing will always provide ROI but many companies including most social media marketing service providers will not accurately tell you the reality about the return on investments, whether it is positive or negative.

In addition, it is common sense, i.e. actual logic courses at a University level, should tell you that for any dispute to offer an impression of an accurate solution, the premise of this dispute have to be defined precisely.

This is another reason why social media ROI is illogical because many online business owners do not take time to define what exactly the investment of this strategy is, before determining whether social media provides positive returns to one’s investments. For them, social media marketing is dollars and cents variable, which must include advertising tools, salaries and many more factors.

The second principle that requires to be defined when calculating ROI is the Return because investment principles are defined in terms of dollars. This means that numbers like Facebook likes, awareness, sentiments etc., should have dollar figures attributed to them for the ROI equation to become relevant. Hence ROI is equal to dollars invested minus dollars returned.

One more reason why social media ROI is illogical is the fact that people use ROI without a positive or negative qualifier, therefore making one big error in using them. The mistake could be made worse by attributing a dollar value unit as a measurement to only one fundamental variable in the equation.

In spite of this, it is advisable to determine social media ROI using the dollar value calculation which is based on a strict accounting method attributed to all variables in the equation. This way, the net result between dollars invested minus dollars returned will be determined.

You can also broadcast using Facebook visual and even video marketing. Do this using Facebook live through your profile or the mentions app as a social media marketing strategy to determine your ROI. This is because Facebook introduced Live to control the demand on the bandwidth and hopefully set high standards for the video streams through the newsfeed ranking algorithm for all organic posts. However, Live is currently available for IPhone users only, but you can use your Facebook Live strategy on other live streaming services such as Google Plus hangouts, Periscope, Blab and Meerkat.

Since social media ROI is one of the most heavily debated topics in the online marketing world, one needs to know the reasons why social media ROI is illogical before choosing online marketing strategies for their businesses. This will help them accurately measure the effectiveness of the social media marketing efforts used so that they can correctly measure their social media ROI. However, note that it is hard to tell how much revenue a tweet or Facebook post you sent out has brought in or boosted your sales.

Judging by the large numbers of business which are struggling to grasp the financial impact social media marketing is having on their businesses, you will find out that its necessary to calculate your returns precisely as a business owner so that you know whether or not your social media marketing efforts are actually paying off.

Social media ROI became illogical to many companies because of inconsistent analytical approaches, unreliable data, poor tools, and lack of expertise, resources and the inability of business owners to tie social media to business outcomes. Therefore, the reasons being outlined above tries to explain why social media ROI is illogical and also provides the solutions for this problem as well.

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