What are your online ROI metrics?
by: Jack Silverman
When the CEO asks, “If I spend $1 on social media or other digital marketing strategies, how do I get the value of $2 back?” This is the age old question all marketers have faced one time or another when trying to justify their marketing budgets and sometimes their very existence. In other words, it’s all about guaranteeing that elusive ROI in order to make a go, no-go decision. What is your answer for the CEO? Do you know what ROI metrics would be important to measure and justify your online campaign?
As a public service here’s Wikipedia’s definition for ROI: In finance, rate of return (ROR), also known as return on investment (ROI), rate of profit or sometimes just return, is the ratio of money gained or lost (whether realized or unrealized) on an investment relative to the amount of money invested.
Here’s how ROI measurement worked in the pre-digital marketing world. With traditional advertising if you ran a price sensitive ad in the daily newspaper you could measure the impact (and ROI) almost immediately for the items in the ad based on the “ringing of the cash register.” The simple ROI metrics were sales minus expenses. If your campaign was based on raising awareness you have a different set of research metrics that measured selected criteria like aided and unaided recall of the pre and post campaign, consumer engagement, believability, response to an 800 phone number and maybe, maybe even a simple measurement like a lift in sales.
Now with the advent of digital analytics there has never been a better environment in the history of marketing and advertising to measure and track ROI investment.
According to the 2010 CMO Council, State of Marketing Outlook report and survey, CMO’s identified the top measures and metrics for quantifying the effectiveness of online marketing or advertising campaigns to include:
• Web site page views and registrations (64 percent)
• Volume and origin of site traffic (60 percent)
• Acquisition of new accounts or opportunities (48 percent)
• Search prominence and site preference (46 percent)
• Incidence of content downloads (37 percent)
• Transactions and/or subscriptions (37 percent)
Social media measurement metrics have the ability to go even broader. You’re looking to measure conversations and trying to find out where interactions are taking place and what content you’re putting out that spurs those interactions. Criteria might include conversation velocity, conversation share of voice and conversation sentiment towards your product category/brand.
At Bolin, we’ve conducted a number of social media audits for our clients as one form of online measurement. From these audits we’ve been able to recommend strategies to our clients that can drive objectives such as awareness and/or trial. The resulting behavior changes and/or sales form the basis for further ROI analysis.
The answer to the original question of how $1 in spending results in $2 of sales may still be elusive but here’s what’s not. It’s a chaotic marketplace. Even with all of the measurement analytics listed above it’s still a “young” test and learn environment. In order to turn the journey into a destination, clients and their marketing agencies need to collaborate up front to determine what success measures are important to their campaigns.
Once you agree on success measures and objectives you can structure social media campaigns to deliver instantaneous results, longer term brand awareness or both. If you do the things you’ve always done, align your marketing objectives with the right strategies and tactics you’ll be able to find an ROI in the new digital world.
Sometimes doing nothing is the right ROI but not doing anything because the ROI is not totally transparent means $1 may never become $2 or $3 or $4. What are your online success metrics?


