SROI - The Social Return On Investment

Some marketers look at ‘Social ROI’, a tool for measuring and accounting for a much broader concept of value, taking into account social factors (Nef, 2013). 

Social ROI allows CMO’s to explain SMM success using values which don’t have financial aspects. This tool helps to allocate a price on social aspects of marketing such as customer engagement, from this CMO’s can formulate a ROI from social media. For example one method can be to compare the benefits of a social media page to those of a Google search cost. For example if Google charges a business £1.50 for a page referral, and the Facebook page referred 10 customers in a day then the Facebook page saved the business £15.

Here is an example from Searchenginewatch;

Advertising Value - Social Web Traffic Referrals:

GOAL: Drive More Web Traffic, Reduce Ad Costs

_____(#) social referral clicks to website
X $_____ (CPC) equivalent display or social ad costs
______________________________________
= $ Social Ad Value

Example:  Estimated 150 social referral clicks to the website at social ad costs of $3.99 per click = $1,197 equivalent social ad value

(http://searchenginewatch.com/article/2249515/Social-Media-ROI-14-Formulas-to-Measure-Social-Media-Benefits)

As you can see this formula measures the amount of money saved from using social media, rather than the amount of money made.

Alternatives for a financial outcome can be ‘mapping a social media strategy with meaningful key performance indicators (KPIs) that align to business objectives for tangible measurement’  (Angie Schottmuller, December 24, 2012). Essentially this involves aligning your brand strategy with the social media objectives and making these your desired return, rather than financial gain. Common aims can be brand awareness, website traffic or building an online community. These aims can differ depending on the organisation, for example a charity may want website traffic, and a person or celebrity may want an online community.

For this method the ROI would be page growth, this can be explained in KPI’s such as ‘likes’. And the success of the campaign can be measured from the KPI growth. 

This issue with this the how can this be explained to managers who are not big social media fans and want a monetary explanation?