Social media generates ROI in the form of networking benefits.
Social media ROI comes from the relationships you build on Twitter, Facebook etc.
Listen to the name – it’s social media. The point is to network, only online. Hence the related term, social media networking.
The benefits you gain from networking:
You attend industry trade shows and cocktails and so on to network. That networking leads to sales, partnerships, job opportunities, recruiting opportunities, increased exposure etc.
Likewise, social media leads in turn to sales, partnerships, jobs etc.
The problem with measuring social media ROI …
…Is that people want to measure social media as a direct response medium, like Google AdWords.
While social media can be a direct response medium, it’s different than paid search or direct mail. Why? It’s different because you first need to build a relationship before converting the prospect.
You wouldn’t respond to a stranger at an industry cocktail approaching you and offering his services. So why should social media be any different?
You need to establish a relationship and only later can you seek to get a response.
It’s for that reason that social media analytics need to measure relationships.
It’s why human resources should measure and manage social media marketing.