What´s the ROI of your phone?

Pilar Pérez Ramírez · 22 de June de 2010

IE Master in Digital Marketing News. Do you want to convince your CEO to invest in social media? Does he like Facebook or Twitter? If he´s more than 50 and lives in Spain, I´m sure he won´t (sorry if you are more than 50 and you´re a Twitteraddict!). The only chance of doing some digital marketing then is if you make your boss see that it could give you a great return on investment (ROI). Yes, this is the holy grail of social media: how much money/conversions/sales/brand awareness would you achieve after a digital marketing campaign. And this was precisely one of our topics in the last SEO (search engine optimization) session: what´s the ROI of SEO? (no, we´re not crazy with all these acronyms)…

Brand awareness, general issues, some more clicks? Forget it: the return on investment of all our efforts should be analyzed and measured. Even if it´s really difficult. Because while Google keywords are getting more and more expensive, there´s a very big confusion in the market. I´ll try to ad a bit what my classmates and teacher (Rodrigo Miranda) talked about in the session.

First of all, try to deduct conversions that come from organic results (from SEO, not from payed ads as SEM) from its costs. Take into account that the good SEO is an organic solution. This means that your site is listed naturally, by its content, in the search engines. So optimizing your site through SEO offers the best potential ROI. Science-fiction? Not at all: we can use tools as Google Analytics, Ommiture or Yahoo! Web Analytics… that could tell you which users are coming from SEO and which from SEM, although they won´t be always easy to distinguish. As my classmate Cristina Rodríguez, Xing´s manager community marketing in Spain, told us, all companies have estimated an average revenue per user and also an average cost per user. “You can deduct both and the result will be the ROI”. Let´s see, let´s see…

Use the ROI calculator

Too difficult? Check out this ROI calculator.

It will measure the return on investment of a CPC (cost per click) advertising campaign. But first, you´ll have to know the total monthly clicks from the publisher, the estimated CPC (the amount you pay a publisher for each click users make on your search listings), the conversion rate (% of users that come to your site and become customers, normally it will range between 2% and 3%) and the average profit per conversion (the amount of money you earn from a sale, if you sell a table for 100 euros and it only costs you 10 euros, your profit is 90 euros, not so difficult!). All these figures you´ll have them from your client activity report or from your own data. As a general tip to use the calculator, enter a percent number, not a fraction. So, for 1%, you should write 1, not 0.01.

Last but not least: the cost of a SEO campaign

By the way, do you want to know the price of a SEO campaign? It´s so variable, but it can go from 6,000 euros for a small company to 100,000 for a big one. And don´t only measure your results with numbers. Here are some tips listed in this very recommended post.

1. Don’t fall into the follower trap.

ROI isn’t just a question of counting up your followers. It’s only “valid followers” — those who are genuinely reading your tweets and engaging with your brand — that really matter.

2. Don’t obsess about your brand’s buzz.

The real power comes from the countless anonymous and unbranded bloggers and tweeters who amplify the message.

3. Don’t forget social media’s hidden benefits.

Easier to prevent a hypothetical social-media PR disaster.

4. Don’t expect instant returns.

Sometimes payback can be a long time coming. But when it comes, it can be huge!

Conclusion? If you want to answer our question: what´s the ROI of your phone?, check out this video. (it´s from December 2009, already ages ago , but I´m sure it will be very inspiring). Enjoy!