Understanding Indirect Returns on Social Media Marketing

March 2016

Understanding Indirect Returns on Social Media Marketing

Struggling to come to grips with your social media marketing? Not really sure that it’s doing anything for your bottom line? Those are common concerns for business owners. After all, social media marketing ROI can be difficult to determine, and the numbers are never exact (not that determining the ROI on any marketing method is ever exact). With that being said, some returns are easier to monitor and evaluate than others. Social media is notorious for having both direct and indirect returns, and you’ll need to understand both.

Direct versus Indirect ROI

It’s pretty simple to understand the difference between a direct and indirect return with your SMM efforts. A click from a post to your site would be a direct return. A sale generated by an SMM campaign would be a direct return. However, comments on your posts are also counted as returns (indirect). Better brand awareness is another example of an indirect return.
It goes deeper than this. Let’s talk about gain for a moment. Direct gain would be the profits resulting from a sale stemming from a customer clicking through the link in a social media post. Indirect gain would be reaching an additional 1,000 customers with your post without it actually costing you more to do so. Both offer value, but they’re not the same.
While measuring direct returns on social media campaigns is relatively easy, it’s much harder to put a monetary value on the indirect returns.

Examples of Indirect Returns

We’ve covered at least one type of indirect return on SMM activities, but let’s consider a few others. Reach: How much is it worth to have your message amplified and sent to other people with whom you have no direct connection? Obviously, that would be easier to understand if they took some sort of qualifying action, but how much is it worth to reach those people and have them become more familiar with your brand?
Engagement: What’s the value of a conversation with a potential customer to your business? What if that conversation doesn’t directly transform into a sale? How much is a positive opinion of your business worth?
Growth: While social media really isn’t a numbers game, growth is something you need to see. How much is that growth worth when new followers or fans don’t translate directly into sales?
Brand Perception: What value would you put on the ability to turn a negative opinion into a positive one concerning your business? How much is it worth to turn a “never going to be” into a “maybe at some point” customer? What value do you place on your business being seen as a positive force in the wider world, or the local community?
As you can see, there are lots of indirect returns in social media marketing that can make determining actual ROI that much more difficult. It’s important that you understand these returns are not only possible, but that they usually outnumber direct returns in SMM.
Understanding Indirect Returns on Social Media Marketing by Chris Tomlinson

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