Social Media ROI – Part 3

From Social Media ROI – Part 1 and Social Media ROI – Part 2, we saw different ways of calculating the Social Media ROI.  In the third part, I am introducing a down-loadable Excel spread sheet (link at the bottom of this post) for calculating the Social Media ROI.  The spread sheet is based on the following:

  1. Work that Charlene Li and Jeremiah Owyang of Forrester Research did in 2007 on the ROI of blogging.
  2. Work that Bill Johnston of Forum One has done for Online Community ROI.
  3. The remaining work is based on un-sourced research.

General comments

For this research, we identified 13 parameters that play a role in determining the ROI of Social Media.  It is not necessary to include all parameters in a ROI calculation – pick the parameters that make sense.

The general idea is that for each parameter and calculation, we need to determine the offline cost.  Then, comparing the offline cost with the estimated cost of gaining the same results (increased revenue, decreased cost, more customers etc) using online Social Media, we can determine the ROI (re-read post Social Media ROI – Part 2 for more info).

Download the Social Media ROI Spreadsheet.

Two things before you download

  1. If you use the Social Media ROI spread sheet, please link back to this blog post and mention my name.
  2. If you change the Social Media ROI spread sheet, please email me the changed spread sheet together with a note describing the changes (my email address is in the right nav bar).

34 thoughts on “Social Media ROI – Part 3

  1. […] added an interesting post on Social Media ROI – Part 3Here’s a small excerptThe remaining work is based on un-sourced research. General comments … Consumers of data (90% of active users) generate no content. […]

  2. […] SEOcontest2008 UK placed an observative post today on Social Media ROI – Part 3Here’s a quick excerpt…directly by better keyword search and higher page rank (based on users linking to your site), and the other driven by paid SEO and paid search. […]

  3. Hi Dag, Thanks for linking to this great post from the ClickZ social media debate. I’m having trouble downloading because it is password protected. Did I miss it somewhere?

  4. dagholmboe

    No problems, Jess. The username and password are specified in the post. Here they are again. Please let me know what you think. Feedback is always good.


    Username: blog
    Password: blog

  5. Chris Bonney

    Want to make sure I give you the right credit. Is your last name: holmboe? I don’t see your full name anywhere on your website. Thanks!

  6. dagholmboe


    You are correct, my last name is Holmboe.

    And, even more importantly, my last name is not really visible on the blog. I will fix that.

    Again, thanks for your kind words on twitter. It is a good feeling when people mention your work on a public platform.


    1. dagholmboe

      Ric, it is a small world, but an important small world. I looked at your work and it is great. Please keep me posted on any updates you do.


    1. dagholmboe

      Ric, thanks for adding this post to your list of favorite social media ROI pages.


  7. WOW- thank you very much for this VERY helpful information. i will make sure i spread the word and give credit to you three. thanks

    1. dagholmboe

      Thanks for the kind words, Justin. Did you get a chance to look at the spreadsheet?

  8. thanks for the great tool and wonderful posts.

    while my online endeavors may seem “silly” to most, it impacts my very real virtual world business greatly. owning a dozen sims and having a transient population of 100 monthly subscribers requires targeted social media efforts

    these have been fairly successful and applying real analytics and practical guidelines, as you discuss here, have led my blog to be the 50th fastest growing wordpress blog for a day last january and the 5th another day. out of 3.5 million blogs, i see that as a measure of success

    it’s easy to waste time in the wrong channels, and advice like yours helps focus our efforts

    thank you =D

    1. dagholmboe

      Ener, thanks for your nice words.

      I think that the only “silly” online endeavors are those that were not acted upon. Furthermore, it seems to me that your online activities were very successful.

  9. Social Media – ROI…

    From Dag Homboe’s blog, a spreadsheet to help you in calculating your ROI in regards to your Social Media plan. Dag says” For this research, we identified 13 parameters that play a role in determining the ROI of Social Media…….

  10. This article really very helpful especially the link is great resources. There are many fonts which I have not, find there. I also doing a job of developer in an Seo Company . we are also providing Small Business SEO for low level business at affordable price. Any further information like this will be appreciate in future as well.

  11. Nicholas Nishesh

    Dag – This is great work. Very impressive, indeed. I myself am involved in developing a couple of measurement concepts and should use your work as a reference, I shall certainly cite you. Have you made any updates to these? Also, is there a way you could either possibly post a video taking us through this line by line? Perhaps even on YouTube? Thanks and great work!

  12. […] mentioned in the previous post, Social Media ROI – Part 3, we have created a Social Media ROI Calculator, in Excel format, that handles the work for you.  […]

  13. Holly W

    After reading, will look forward to hearing you speak at Bentley tomorrow in my e-marketing class.

  14. Laura Greenstein

    In your estimates for ROI do you consider the employee hours/ efforts as money spent or time that could have been invested otherwise?

    1. Hi Laura;
      Thinking about employee costs must be guided by reasonableness – after all, any ROI calculator for Social Media is probably going to be used in discussions with c-level executives. Also, consistency is important – thus if in one part of the calculation you figure on ACTUAL cost, you should be thinking in terms of ACTUAL income, too.

      I might have employees I bill out at $100 per hour. Thus, if they are spending an hour a week writing a blog, should I count that as a $100 cost? Maybe not. It depends on my overall business model. IF, in that model, I don’t think of employees as 100% productive, is the time coming from the productive time, or pre-established NON-productive time.

      In my own firm, we establish that employees need to be 70% productive – thus 30% is checking email, learning and reading, and blogging. So in this case, I calculate my costs based on the average employee salary. For good measure, I add 30% to that for other employee costs. If I make assumptions, I’d rather assume a higher cost. That will make a positive ROI more impressive.

      1. dagholmboe

        Thanks for the comments. Our calculations do not dig deep into the investment side. I believe that it is pretty simple to calculate the social media investments (= setup and ongoing technology + setup and ongoing campaign (material, people)).

        Instead, we put our effort into estimating the income side, the social media return. Remember the tough part of social media ROI is not the ROI in itself. The ROI is just a simple ratio between return and investment ((r-i)/i). The tough part is to define the social media return and then to put a dollar value of on the return. Then, again, it is simple to calculate the ROI assuming you have the investments.

        Again, thanks for the comments.

  15. Nice blog you have… looking forward to read your next post

    1. dagholmboe

      Raymond, thanks for the comment. Social media and specially the analytics part are really fun concepts to try to understand.

  16. […] our application, we use the third way to quantify the Social Media Return. Please see here for a discussion and here for a […]

  17. […] our application, we use the third way to quantify the Social Media Return. Please see here for a discussion and here for a […]

  18. great post, this article is helping me so much, thx

  19. I found your article very interesting, whether you have an article else associated with this post? maybe we exchanged articles

  20. Assessing the cash flow is one more important element within the company technique format, so as to sustain a regular cash flow to meet the important capital needs. Probability of monetary crisis and also the methods of crisis management should be mentioned within the structure. The company strategy must consist from the advertising plans and strategy leading towards the expansion from the organization.

  21. […] Holmboe provided a great spreadsheet example to get you started in his post Social Media ROI – Part 3. His spread sheet measures Unique visitors, Page Views, Comments, Registered Users and […]

  22. […] Holmboe provided a great spreadsheet example to get you started in his post Social Media ROI – Part 3. His spreadsheet measures unique visitors, page views, comments, registered users and […]

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