Internet Intelligence uses 3 different measurements to capture the full effect of your social media investments.
ROI – Return on Investment
When there is a measureable connetion between a social media channel and a sale on your site, you can calculate the ROI. The social media channel has to be a referrer to your sale (or lead). We call this a direct relation between the social media and your goal achievement.
We need to define what costs are related to social media and we need a monetary value for your goals. If it’s sales it’s easy, if it’s leads we need to apply a value for your lead. The formula for calculating ROI is well known:
(revenue derived from social media – social media investments) / social media investments
ROE – Return of Engagement
It might be that we use this term differently from others. We say Return of Engagement and what we mean by that is the amount of engagement your company gets in return from your social media investments. There is already a term for the monetary return and that is ROI. No need to change that just because we are talking social media.
To calculate ROE we first need a value for the total engagement. We use a Social Media Engagement Index (SME-Index) for this purpose. Contact Internet Intelligence to learn more about SME-Index.
When we have our SME-Index in place we are ready to calculate ROE:
(SME-Index – social media investments) / social media investments
Correlation analysis
Finally we use correlation analysis to explore the connection between social media investments, social media engagement and business performance. Not all sales are direct (with social media channels as referrers), but still the engagement will in some way affect your sales over time and also your sales in non digital channels. Contact Internet Intelligence to learn more about how we use correlation analysis to understand how your social media investments drive overall business performance.
Some final words
Internet Intelligence can help you evaluate what effect your social media investments have on business performance. And most of all we put it all into context; social media is only one of many marketing channels for your company and we evaluate all digital marketing with comparability between the different channels.
