Social Media ROI: It’s Gray Matter

Rachel Strella
Rachel Strella Owner, Strella Social Media

Posted on March 6th 2012

Social Media ROI: It’s Gray Matter

When we consult with clients for the first time, many of them ask, “What’s going to be my ROI with social media?”

Let’s start with a big disclaimer. Social media is not magic. It’s not a silver bullet, a cure for the broken business, another advertising channel, a membership to an exclusive club and it’s certainly not a one-way ticket to immediate profits. Social media is a form of communication; a platform for building relationships. And, like most relationships, it takes time, effort, and energy.

Social media shouldn’t receive a separate distinction or category in any business marketing strategy. In my  own personal marketing pie, social media does not have its own slice. When used optimally, social media is combined with the other slices of the pie. Those other slices include functions like public relations, advertising, and direct marketing. Put simply: social media does not exist in a vacuum. It should be integrated with your current efforts to enhance your overall marketing presence.

In a recent conversion I had with a colleague, we discussed the two different marketing mindsets. The first: a company decides to invest money on an advertising campaign. Once the money is gone, the campaign is done. If the business has more customers at the end of the campaign than when it started, the marketing efforts have usually paid off. The second mindset: a company decides to invest time into relationship-building.

The business offers value by giving its audience solutions to challenges and problems. The result: the audience is naturally attracted to value and soon begins to know, like and trust the business. The audience is more likely to inquire about the business’s products and services.

Until social media evolved, the latter was likely done via networking, referrals, and WOM. Social media simply takes this a step further and includes an online component. This is powerful because we now have the opportunity to reach more people in less time while still enhancing our existing relationships. Here’s another way to look at it: leads come from WOM, WOM is social, social media is social, so leads can also come from social media.

So, where are businesses going wrong? They are viewing social media in the first mindset! Social media is not an advertising campaign. It’s not a one-way channel that starts and stops with the single hope that there is more business at your doorstep at the end of the run. Social media is a way to build the relationships that establish trust and enable people to feel comfortable buying from a business.

Another layer of complexity is that the lead sources from social media area difficult to pinpoint and is not always tied to one thing; it’s not black and white. Rather, it’s a combination of things that ultimately supply the lead; it’s a gray area. Executives don’t like gray and are hesitant to invest time or money into ‘gray.’ But this gray is no different than the second mindset. Or is it?

What do you think? How do you evaluate social media ROI?


Rachel Strella

Rachel Strella

Owner, Strella Social Media

Rachel Strella is the owner of Strella Social Media, a company specializing in social media management.

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Hi Rachel,

I agree on your conclusion that social media is just another part in the mix. But I think it's a good idea that companies start off with a social media hub in which the core business functions are respresented. This way companies can learn to harness the new process that comes with social media usage. On the ROI part, I also agree but how grey it is can be a choice, doesn't it? I also struggle with the ROI part. But it's good to have targets on the number of followers, friends, fans etc.  A lot of the 3F's equals to reach, but not yet to relevance etc etc. I think the right thing to measure is "brandcommitment."  

Agreed. Many companies can use social media as a communication hub. I think the idea is that it doesn't exist by itself as some seem to think!!

"Social media is not magic. It’s not a silver bullet, a cure for the broken business, another advertising channel, a membership to an exclusive club and it’s certainly not a one-way ticket to immediate profits." <-- Spot on Rachel! I feel that everytime a new method of medium of promotions has been introduced to society there is a portion of the population that thinks that it will be the one-stop-shop to fix their marketing needs. Radio, TV, Print, Grass Roots, Internet and now Social Media are part of the every changing and evolving marketing mix. A single one of them will not fix your problems and to be honest, the combination might not be able to fix all of your problems either! CRM, customer service, quality products, all play a part as well. 

-Reed Pankratz

Hi Reed,

Great to hear from you!

I often tell people social media can 'work' for any business. Then I retract and say, "well any business that has a repuation for quality service." If your business stinks, social media will only amplify it.


Good one, Rachel! Today’s WOM (on social media) is principally similar to the traditional WOM. Nowadays one can track this metric using easily available data stream though. Interestingly, marketers often forget the fact that the activities happen in that media are attributable to other advertising activities such as TV, Online, etc. Anyway, social media activities can be used as an early indicator of the bottom line change, or one can attempt to capture some sort of conversion from a stream of favorable conversations (within a specific segment).

I love this article. We preach this to our customers here at We supply followers and fans for various media platforms. It is up to the customer to convert them into loyal customers. This takes alot of time engaging the customers. We advise to add a human approach to updates not just a barrage of generic sales pitches. This usually helps heighten ROI. Great read aain!!!!!

Thanks for the feedback!

I think every business has to do what works best for them, but overall, a strong following and valuable content never hurt!

Really agree with you that Social Media should not be mistaken as its own thing when it comes to slicing a marketing plan.  Social media is the tool that should be used as part of the whole strategy and in return the ROI is brand loyalty for the long term.  I have clients that expect instant rewards.  Instant leads.  Instant ROI.  The truth is that the ROI into social media comes in the future.  It is the education of business owners that don't understand this tool that makes it difficult to sometimes sell.  We live in a society that expects instant gratification in all that we do. Those that understand how to efficiently use social media by building upon the relationships made with its brand will ultimately realize its power and ROI. 

Well said! Wish I had a secret recipe to the "Instant ROI" but unfortunately it's something that needs made from scratch!

Could not have put it better. Far too often companies --who have no social media or online presence-- look at SM as a magical bullet. They think that if they put a facebook page and a couple tweets then business will go booming next week. I sometimes literally have to keep myself from breaking out laughing on the floor.

I've always told my clients social media is ultimately a trust tool.


Congrats, very good article. The message is clear cut and I agree with the statement: "Put simply: social media does not exist in a vacuum. It should be integrated with your current efforts to enhance your overall marketing presence."

However, in the process to get through your message, you exaggerate a bit. Specifically, I do not agree with you that traditionally what was happenning was: "a company decides to invest money on an advertising campaign. Once the money is gone, the campaign is done." Possibly true for some but not  the standard. I know many FMCG companies that mobilised the whole organisation behind a campaign (sales people, retail, in-store communications, PR, professionals for recommendation, event organisations, activity in shows and conferences, etc etc etc) One can draw examples from many other industries.

On the other hand, your next statement is absolutely true: "So, where are businesses going wrong? .... Social media is not an advertising campaign." Businesses did not know how to take advantage of the new emerging opportunities.

My point of view (and of many others) is that social media create opportunities for brand engagement. They are not necessarily an engagement platform for brands. Brands have to try hard to ensure their presence is justifiable, welcome, interesting, engaging and on top to make this initiative work out profitably. This is called marketing.



Very interesting analysis - and I see your points. A lot of my thoughts have shifted in the past year to two years and I am more in tune with what all these means. You certainly can't blanket-statement any of this!

I think there is definitely so many great benefits that come from using social media so much. Glad that they are using it here. The options are endless with social media so much here.


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Social Media is not only a huge tool for business but a medium for influence. More than meets the eye, we have opened the world to a new level of communication which even an ordinary people around the globe could make notice of the events, development and discoveries, may it be good or bad. I agree that its a mix of informations and influences among people bringing positive and/or negative impact to the society and businesses, which will pave a new opinion and views from ordinary people to a corporate figures. A simple business could even become big from getting a good reputation and establishing brands. It is indeed a good start to hook up your business in social media and increase publicity and exposure.

Agreed, Bethany. That's the power of the internet - and the world we live in today. It's pretty incredible!