ROI vs Conversion Rates – Social Media Terminology Discussed

Not long ago we read an article about measuring ROI for Pittsburgh Social Media campaigns. We think ROI is a term meant for advertising, marketing, or branding initiatives and we aim to explain why. If you're measuring for ROI, you've got to call it advertising, marketing or branding. If you call it advertising, marketing, or branding it's not social media even though that may be the platform used to deliver the message. That’s the fundamental difference between Inbound Marketing and Outbound Marketing and why the distinction in terminology. We measure Social Media campaigns in conversions.

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The term ROI stands for return on investment. The only way to measure the ROI for anything is to separate the return and the investment costs from all other factors including all other advertising and marketing. The sum total of everything it takes to achieve your goal is by definition your investment. Time, money, internal resources, outsourced solutions, and opportunity cost are all factors that must be included to determine investment. If you define “return” in other ways such as website traffic, blog traffic, or hit counts it’s not ROI it’s a conversion rate. We think the author gets ROI and conversion rates confused.

Another reason ROI is a bad measure for Social Media is that business is not static, neither is your competition. There are too many factors that change too frequently to measure ROI for social media campaigns. Business cycles, geographic, seasonal, and climatic factors, as well as other external reasons all affect your results and bottom line. To nail down a number is a pursuit in futility. If your going to come up with a measurement metric make sure it’s valid before you base investment decisions on it.

It's the sum of the parts not the measurement of each part that matters in our opinion. Conversions, however they come, are cultivated through the whole marketing plan.

Social Media Tips:

  1. Use your skills and resources wisely as they are all finite.
  2. Give campaigns, social and otherwise, a fighting chance by planning a prolonged dedication of resources and don’t waver.
  3. Only after a defined period of time can you look back and determine where you’re campaigns are successful and where they need work.
  4. Be persistent.
  5. Have Fun.

Blackball Online Marketing is the home of the Online Marketing Technologist. Liven up your online presence by contacting us. “Helping People is Good Business”

Have a different take on this subject? Do you think we are getting this all wrong? We’d welcome your thoughts.

Tags: conversion rates, marketing campaign, media campaigns, Pittsburgh, Social Media

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