ROI is return on investment, and technically that’s just what it is. Think of the amount of time, human resources and money you invest in a social media marketing campaign. What you get back in returns from that investment - sales, email subscribers, traffic, downloads, brand visibility or customer trust - is your ROI number.
Sometimes, ROI can be measured in terms of money. For example, a social media ad that leads directly to an un-indexed landing page with an order form is pretty easy to track
“A lot of businesses approach marketing the wrong way,” said Alexandre Garese, a businessman and investor. “For instance, here’s how they do social media marketing: create social media accounts; post things; expect to make some profit. Unfortunately, effective social media marketing isn’t that plain simple. It takes a lot of effort to create a social media presence that actually benefits your business. To make things even more confusing, popularity on some platform does not necessarily translate into profit. That’s why tracking ROI is so important in business. It indicates whether or not you are getting the results you want from your efforts.”
By tracking ROI, you learn which campaigns are working best, the social media channels that are most beneficial to you, where you need to boost investment, places where improvement is needed, even efforts you should probably abandon. Remember, even though many social media efforts are low or no cost, they aren’t truly free. You are investing at least some time and resources.