The ROI of Social Media December 3, 2012 RICCentre By: Matthew Kert In the past, the metric of return on investment (ROI) gave companies a good sense of how they are doing. It’s a simple formula taking your gains from an investment, subtracting the costs, and then dividing by total cost of the investment. In essence, if your investment was successful then you would show a positive ROI. In today’s market of social media campaigns, how can you quantify a Facebook like, video view, comment or re-tweet on twitter? Converting these things into actual numbers is difficult and companies struggle with connecting their gains with social media. With so many numbers to deal with, new ways to interpret this information is needed. Looking ahead, Mashable.com has come up with the following performance metrics to consider when starting a social media campaign and gauging if it is successful or not: Share of Voice: This is judged by the amount of conversation and how engaged your fans are. The key question is: are people talking and how much are they involved. Conversation: This is how engaged the company is when talking to customers. It is about joining into the conversation and creating dialogues which will “increase your brand affinity.” Advocates: Using already established fans to your benefit will allow you to tap into a larger market, in a sense creating an ambassador for your company. Product Guidance: Your customers are ultimately the ones who like your product/service so it’s important to look to them for guidance. Using social media to get customer input will help you on the path to success and solve problems early. Social media is a very powerful tool. Check out Mashable.com to learn about everything to do with the social media universe. Matthew is a final year undergraduate student majoring in Communication, Culture & Information Technology and Psychology at the University of Toronto Mississauga. He is interning at the RIC centre and is responsible for managing various social media events the company has to offer. He is very interested in advertising and marketing with a strong background in online marketing. The RIC blog is designed as a showcase for entrepreneurs and innovation. Our guest bloggers provide a wealth of information based on their personal and professional experiences. Visit RIC Centre for more information on how RIC can accelerate your ideas to market.