C Suite vs Social Media ROI

Last Updated: January 18, 2020

CEO and Social Media ROI
Image by: Alexander Bolotnov

This is the second article in the “Social Media in the C Suite” series. For more, check out “Selling Social Media to the C Suite” and the upcoming “Social Media Leadership” posts.


The Bottom Line

Yes… start at the bottom line, because that is what it’s all about. The one and only true indicator of social media success, or any marketing success of that matter, is of course… the bottom line. How much revenue was or will be generated as a result of social media efforts?

In order to judge the effectiveness of any marketing effort, we have to be able to compare and contrast the before and after state. A common mistake is to compare projections (what we want to happen) to short-term results (what did happen in a month of efforts). However, what we should be looking at is a baseline and longer, set periods.

For example, you would want to have access to your financials (namely revenue) from the previous year or two, broken down in quarters or 6 month increments. This establishes a true baseline, against which you can compare your new efforts.

A realistic timeline to see results from your social media engagement ranges from 6 months to a year. Considering that you are not hiring your receptionist’s niece or the accountant’s brother-in-law AND that your objectives are clearly outlined (read more about Social Media Objectives), you should see a measurable increase in revenue.


Defining Social Media ROI

Sasquatch-like, the elusive art of determining Social Media ROI continues to puzzle both large and small business. Why would anyone spend an hour, two or more hunched over a computer updating statuses, writing posts or sorting through images?

You’ve read about Return on Engagement, Return on Influence and so forth – which are terms often used to mask the ineptitude of your marketing agency or department. No bank will let you pay your line of credit with Facebook likes and no restaurant will settle your bill with Twitter followers or blog pageviews.

Social Media ROI is pretty plain and simple: Can you specifically and clearly pinpoint a benefit from social media engagement? Can you connect that benefit to your core business objectives?

Did the effort you put into managing your reputation, increasing your search engine rankings or building an online community produce a higher return then its cost? For a real-world example of this concept in action, read on…


Comparing Apples to Oranges

When we buy traditional media – it’s a pretty straight forward transaction. A billboard may cost $4000 per month – and any new business that comes in addition to the average could then be used to calculate the ROI of the spend. Social Media, on the other hand is a bit more tricky. Or is it?

Let’s put things into perspective here. If you were to run a single billboard at a cost of $4000 per month (conservative estimate) – for a year, your advertising expense would be $48,000 per year. And that is ONE billboard – with no additional ads or anything else.

If you were to take that money and hire a junior person, provided them with a $42,000 per year salary with a $6000 performance bonus – you would get a YEAR worth of human effort; of someone connecting with your customers, increasing your visibility and providing a dedicated service to your best and most interested customers. Let’s even chop off a month and allocate it to that person learning about your company and brand FULL TIME, understanding the strategic objectives and branding guidelines… you have 11 months of someone dedicated to engaging your existing customers and reaching new ones, building your community and managing your online reputation.

It’s almost impossible to think that a year’s worth of social media engagement would yield less results then ONE single billboard – yet it boggles my mind that businesses still lean towards the diminishing returns side of the equation.


Oh… another note: Your online efforts in the area of social media engagement and search engine optimization, to name a couple, will yield multiple returns. Once you’ve built up a community – you have access to those customers in the blink of an eye, anytime. Once you’ve created enough compelling content to increase your search engine rankings – your competition will have to work harder and longer in order to take your place.

So, try not to think about Social Media ROI in the IMMEDIATE term. Give it some time to breathe, develop a smart strategy and set up some realistic and clear objectives and watch it do work.


– Ernest // Follow me on Twitter

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