Return on marketing investment (ROMI) is a parameter used to determine and measure the success of an online marketing campaign. This will help marketers to decide how cost-effective their Social Media Marketing (SMM) campaigns have been. ROMI calculation for SMM sets a correlation between the SMM investment and the generation of business’s revenue obtained as a result of SMM efforts.
Though the concept of measuring the SMM expenses in terms of sales and profits is not new, terms such as ROMI for SMM have gained more prominence now than ever before.
In today’s age and time when social media is having an all pervasive influence on possible buyers, businesses have started vigorously undertaking SMM programs. Notwithstanding this fact, business enterprises are still not sure whether SMM is really worth the investment.
Broadly speaking, SMM spending will be considered as justified if the ROMI for SMM is positive. In a recent survey of nearly 200 online business owners, more than half reported that they found the ROMI metric for SMM positive and useful.
Social Media ROMI indicates the return on investments made in social networks and use of SMM strategies to achieve enhanced sales and concomitant revenue.
Social media ROMI becomes more relevant and meaningful once the experimental phase gets over. During the initial days – as is to be expected –the money spent on SMM may not be advantageous but that can not be a reason to discard all future spending on SMM.
Please remember, that ROMI pertaining to SMM is not only about measuring, reviewing, and improving. It is more significantly about forecasting, allotment of funds, and chalking out SMM campaigns. ROMI assumes a lot of importance for SMM as you cannot mindlessly keep spending money on SMM campaigns without knowing whether you are benefiting by additional sales and increased business revenue.
Of course, there is some controversy with regard to applying ROMI to SMM efforts across the board. The argument is, there are some forms of SMM that cannot be quantified in terms of ROMI. SMM is a vast term covering different functions and marketing goals. For instance, brand building, customer service, and community development may not be directly contributing to lead generation and hence cannot be measured strictly using ROMI metrics.
The plain truth is, there is an appreciable difference between brand building and lead generation and hence the ways of measuring them should understandably differ.
The fact cannot be denied that if you make the right SMM efforts in communicating with customers and provide them with true value, you will gain their trust and improve their perception of your brand.
Regardless of ROMI, business owners believe that they should add SMM to their overall marketing plans. In keeping with the need of the hour, companies must have Facebook, Twitter, Linkedin, and Pinterest accounts set up for their businesses. They must regularly post interesting content on these pages, constantly engage their prospects, and link them to the company’s e-mail, blogs and websites. The right SMM strategies will certainly pay dividends–some short term and some long term.