Return on Investment - How do you measure?

Traditionally, ROI can be figured simply as a gain from investment minus the cost of investment. With social media, ROI can be measured in a variety of ways such as customer acquisition, lead generation, contest entries, and even revenue. It all depends on the goals you set to measure your ROI.

Before you can track and measure your ROI you need to determine your goals so you know what you are measuring and how you will know if it is a success.

For example, with Play Unplugged how do you determine your ROI? You know what your investment was but that may not necessarily equate to instant revenue. So how do you measure if your investment was a success?

Set goals. Are you collecting names and emails to add to your email campaigns? Are you using additional offers to entice return visits and then tracking those visits? Do you have a follow-up plan in place for visitors who have expressed interest in your business?

ROI does not need to be a set of algorithms that will tell you if you are receiving that return. Set alternative goals outside of revenue and investment that can highlight other areas you may not realize are also a valuable ROI.