Social Medi Essay

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aFA L L 2 0 1 0 V O L . 5 2 N O. 1 Donna L. Hoffman and Marek Fodor Can You Measure the ROI of Your Social Media Marketing? REPRINT NUMBER 52105 MARKETING As social media applications like Facebook (here, cofounder Mark Zuckerberg) have changed the ways consumers interact with brands, companies have struggled to keep up.Target, Dell, Burger King and more are trying to learn what’s effective. CanYou Measure the ROI ofYour Social Media Marketing? You can. But it requires a new set of measurements that begins with tracking the customers’ investments — not yours. BY DONNA L. HOFFMAN AND MAREK FODOR THE LEADING QUESTION How can you tell whether social media are working? FINDINGS Forget traditional ROI. Instead of calculating the return on the company’s investment, managers should assess consumer motivations to use social media and measure the social media investments customers make as they engage with the marketers’ brands. Measuring customer investments in a social media relationship reveals the likelihood of a long-term payoff, not just short-term results. AS MANAGERS BECOME more comfortable with including blogs and social networks as part of their integrated marketing communications, they have naturally turned their attention to questions regarding the return on investment of social media. Clearly, there is no shortage of interest in the topic. A quick Google search recently for “ROI social media” returned over 2.5 million hits, many seemingly relevant. Internet marketing and online retailing conferences now devote attention to ROI issues, and managers are asking themselves every day, “What’s the ROI of [substitute social media application here]?” Blog posts, white papers and case studies prepared by social media gurus, consultants and industry analysts abound, yet the answer remains largely unsatisfying. That isn’t good, especially

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