What if companies could measure how many products, they have sold based on how much investment they have made on social media?

FINAL ARTICLE PROPOSAL: MEASURING ROI ON SOCIAL MEDIA MARKETING 1
Measuring ROI on Social Media Marketing
Yasene Jesernik
Horizons University

FINAL ARTICLE PROPOSAL: MEASURING ROI ON SOCIAL MEDIA MARKETING 2
Measuring ROI on Social Media Marketing
Social media platforms have impacted marketing in various ways. There is a lot of
competition from multiple marketers using different forms of social media. To find out the
effectiveness of social media, marketers should assess the ROI of social media used in
marketing. ROI is an acronym that stands for return on investment. It, therefore, shows the
return that an individual expects after investing various resources using social media to
achieve customer satisfaction, brand awareness, and increased revenues. Various
organizations engage in the activity of measuring their return on investment to secure their
budget. It also helps these organizations to find out if their social media practices are
effective or not. It also enables an organization to understand its audience better.
Finance uses the following formula to calculate ROI, ROI = (benefits from an
investment – the amount invested)/amount invested (Cronin, 2014). Although this formula
helps to calculate the ROI in finance, there are differences when calculating social media
ROI. The differences occur due to the use of different metrics of measurement. For example,
an organization can use the level it has reached its target audience in measuring its return on
investment. It may be challenging to use profit in such a scenario and therefore requires other
strategies of measurement. When one is not sure of the metrics to use for analysis, it is
necessary to find out what happened when you launched a specific campaign in the market.
To effectively measure social media ROI, there are various essential steps that any
marketing organization or individual must look into. The first step involves setting clear
objectives. Some of the objectives should be based on aspects such as experiences with
customers, level of brand awareness, and how to mitigate issues of security in case they arise
(Buhalis & Mamalakis, 2015). Social media marketing objectives must be in line with the
goals of various departments in an organization. Although social media can create brand
FINAL ARTICLE PROPOSAL: MEASURING ROI ON SOCIAL MEDIA MARKETING 3
awareness, it may not always be sufficient. For this reason, it is essential to have clear
objectives.
The second step is to set goals and show how and when the organization will achieve
those goals. It would be appropriate to use the SMART strategy to set goals. An example of a
smart goal in social media is to increase the online response time by 15 minutes at the end of
the first year of operation. The third step would be keeping track of the performance metrics
(Michopoulou & Moisa, 2019). It is necessary to have the parameters that one will use in
measuring social media ROI. Follow up on the set metrics and find out if they are on the right
track of performance or if there is something that may require a change. The last step is to
find out the cost that one will incur while using social media. To find out the cost, an
individual or organization should look at the cost of tools, the budget set aside, the cost of
creating specific content, and the time employees take while on social media.
While measuring ROI for social media marketing, it is also critical to look at the
various tools. Some of the tools include the calculator, which helps one in calculating the
return on social media investment. Other essential tools include the Google Analytics tool,
Facebook pixel, and UTM parameters. When reporting ROI on social media, one should use
templates that have a plain language with a specific time frame for reporting.
What KPIs are you most interested in researching?
While the benefits of using Social media in consumer engagement have been established at
face value, there still exists a gap when it comes to measuring the impact or results of engaging
with consumers through social media (Aluri, Slevitch & Larzelere, 2015; Gill, Sridhar &
Grewal, 2017). This point is where the concept of Return on Engagement (ROE) comes in.
There has been comprehensive research on the usage of social media from a business
perspective, research efforts on return on investment have not fully taken off since measuring
FINAL ARTICLE PROPOSAL: MEASURING ROI ON SOCIAL MEDIA MARKETING 4
the Return of Engagement is a new concept for social media marketing and is being fronted as
the ideal performance metric that could measure positive results of consumer interaction
through social media. As such the KPI’s that I am interested in researching are:
a. Engagement rate by reach (ERR) = total engagements per post / reach per
post * 100
b. Engagement rate by posts (ER post) = Total engagements on a post / Total
follower *100
c. Engagement rate by impressions (ER impressions) = Total engagements on
a post / Total impression *100
d. Daily engagement rate (Daily ER) Daily ER = Total engagements in a day /
Total follower *100
e. Engagement rate by views (ER views) = Total engagements on video post /
Total video views *100
f. Factored Engagement Rate = Comment-weighted ER = (Total comments x 2)
+ all other engagements / Reach per post *100
What is it you want to know about KPIs with regard to a particular industry, product,
demographic group, type of marketing message, etc.?
Social Media Marketing is present in all aspects of our lives. As managers are utilizing more
social networks and blogs as part of the company’s marketing communications. As such, it is
clear that companies would like to know if their Investments in Social Media marketing are
yielding positive results. Therefore, when calculating the Return on Investment, a company
has to consider all possible ways that the social media may benefit it (Miller, 2015-2016). The
ROI therefore indicates how many euros profit will jump out on a Euro capital investment.
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However, there’s no standard metric for calculating “Investment Engagement Sale”. Current
metrics do not take frequent fluctuation of likes, shares, comments, views and other
inconsistency in factor. Social media is a fast-paced environment where users have the
opportunity to change their opinions within seconds. As such, it is currently difficult for
companies to use current methods and metrics to measure the ROE as current ROE formulas
do not take the above factors into enough consideration.
What if there was one formula that companies could use to calculate the investment
engagement on product. What if companies could measure how many products, they have sold
based on how much investment they have made on social media? Can you give me an idea of
what your overall research question will be? Finish the following sentence, then write a
paragraph or about proposed methodology. How will you collect data in order to answer the
question?
“The purpose of this study will be to create an effective way of measuring social media
performance as social ROE (return on engagement) or optimizing the current
measurement of social media performance as social ROE (return on engagement)”.
In 2017, Influencer Marketing dominated the marketing industry, reaching beyond
even distribution in daily and business media. Not everyone is convinced about the “Power of
Influencers”. While half of the marketing executives consider Instagrammer, Youtuber and
Blogger as the new brand ambassadors, the other half doubt the measurability of the results.
And not altogether wrongly: Especially in the transparency of the costs and in the success
control generally valid industry standards are missing. Many ponder: “What metrics are
employed, and which are relevant?”
The use of fake followers and bots is in order to attain more engagement, clicks and
conversions is currently seen and displayed as a huge problem in the social media marketing
industry. The usage of using fake followers and bots has grown. Ninety four percent (94%)
FINAL ARTICLE PROPOSAL: MEASURING ROI ON SOCIAL MEDIA MARKETING 6
of marketers currently believe that in future transparency and authenticity will be the key to
the success of the influencer. Nonetheless, because of this manipulation in the social media
marketing industry, the FTC guidelines call for a more transparent cooperation between
influencers and brands and, for example, the labeling of sponsored news in the social
networks. According to a report by the search engine Influencer DB, On Instagram alone are
currently on more than 558,000 influencers, who have more than 15,000 followers. Eighty
one percent (81%) of all influencers are so-called micro-influencers with 15,000 to 100,000
followers and influencers with more than five million followers make up one percent (1%) of
all influence users on the net.
The revenue potential for companies that focus on influencer marketing is huge. For
example, 22 percent of 18- to 34-year-olds made a purchase after seeing an online influencer
associated with a particular product. And half of the 25- to 34-year-old users from a survey of
1,200 consumers who viewed influencer content or who communicated with influencers via
Facebook, Twitter, YouTube and / or Instagram believe that influencer communication is
authentic and genuine is (Source: Marketingcharts.com 2018).
In a competitive world, every company wants to be number one or among the top ten.
Therefore, it was only a matter of time that companies discovered Social media platforms and
influencer marketing for themselves. It’s time-consuming and labor-intensive to build quality
reach on social media channels. Those who want to assert themselves on the platforms need a
lot of dedication and patience to win a solid number of followers for their own appearances.
However, there are many companies that want their brand and image to be dominated and
presented everywhere. Some of these companies therefore utilize services from other
companies that specialize in growing Social media pages of companies. No patience? No
problem! You can finally buy followers. That’s easy. The network is teeming with offers:
1000 Followers on Instagram are already available for less than ten euros. But beware: A
FINAL ARTICLE PROPOSAL: MEASURING ROI ON SOCIAL MEDIA MARKETING 7
purchase would be the quick way, but not the right one. Because such a procedure has for all
parties involved – influencers, advertisers, social media platforms – in the long term only
disadvantages.
When compiling this Dissertation Topic, I could not find any Literature, Research or
study that measured the metrics of bought social media services such as likes, comments and
followers and the effects that such services have on a business, a celebrity or an average
person. It does not mean that because something is ineffective for Businesses that it has to be
ineffective for other organizations or individuals. In order to truly measure the return of
investment in social media marketing, all areas and entities of social media must be taken into
consideration. It is argued that fake followers sell nothing but an empty promise. And as such
companies are advised to invest in quality over quantity. However, if we take in
consideration the latest controversy in the United States Presidential Election with regards to
fake news. From a scientific perspective, one could argue that widespread fake news on
various social media platforms played a vital role in the influencing of voters. Thus, in the
election of a President of the most powerful country in the world. Therefore, this research
will tackle and find metrics to measure the ROI for Social media Marketing as it relates to
organic and bought services. As such, I will dedicate my research not only to explore the
relevance of return on investment as a social media engagement metric but also to develop a
Formula that will calculate the ROI for bought social media services.
How will I collect data in order to answer the questions?
There are four major classifications of research designs. These include observational
research, correlational research, true experiments, and quasi-experiments. Each of these will
be discussed further below.
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Observational research: Often times, the studies are qualitative in nature. My Social Media case study will
entail extensive notes based on observations of and interviews with various Social Media
Stakeholders such as: Influences, Customers, Marketers etc. A detailed report with analysis
will be written and reported constituting the study of my individual case. These studies
may also be qualitative in nature or include qualitative components in the research.
True Experiments A true experiment is defined as an experiment conducted where an effort is made to
impose control over all other variables except the one under study. To understand the nature
of the experiment, I must first define a few terms:
1. Experimental or treatment group – this is the group is comprises organic social media
users e.g. users that freely follow, like and share posts and information on social media.
that receives the case studies that are different from the control group: Bought Social
Media Services e.g. both followers, fans & likes on the variable under study.
2. Control group: Bought Social Media Services – this group is used to produce
comparisons. The treatment of interest is deliberately withheld or manipulated to provide
a baseline performance with which to compare the experimental or treatment group’s
performance.
3. Independent variable – this is the variable that the I will use to manipulate the study. It can
be any aspect of the environment that is empirically investigated e.g. buying social media
services, for the purpose of examining its influence on the dependent variable.
4. Dependent variable – In comparison to the Independent variable, I will not does not
control this variable.
5. Random assignment – in a study, each subject has an equal probability of being selected
for either the treatment or control group.
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6. Double blind – neither the subject nor the experimenter knows whether the subject is in
the treatment of the control condition.
As stated previously, the control group will provide us with a baseline for
comparison. All subjects should be randomly assigned to groups, be tested a
simultaneously as possible, and the experiment should be conducted double blind. Perhaps
an example will help clarify these points. Wolfer and Visintainer (1975) examined the
effects of systematic preparation and support on children who were scheduled for inpatient
minor surgery. The hypothesis was that such preparation would reduce the amount of
psychological upset and increase the amount of cooperation among thee young patients.
Eighty children were selected to participate in the study. Children were randomly assigned
to either the treatment or the control condition. Wolfer and Visintainer (1975) examined the
effects of systematic preparation and support on children who were scheduled for inpatient
minor surgery. The hypothesis was that such preparation would reduce the amount of
psychological upset and increase the amount of cooperation among thee young patients.
Eighty children were selected to participate in the study. Children were randomly assigned
to either the treatment or the control condition.

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References
Buhalis, D., & Mamalakis, E. (2015). Social media return on investment and performance
evaluation in the hotel industry context. Information and communication technologies
in Tourism 2015 (pp. 241-253). Springer, Cham.
Cronin, J. J. (2014). Teaching ROI analysis in an era of social media. Journal of Advertising
Education, 18(2), 28-35.
Michopoulou, E., & Moisa, D. G. (2019). Hotel social media metrics: The ROI dilemma.
International Journal of Hospitality Management, 76, 308-315.