The rules of marketing are changing with the habits of society- so why keep using the same methods to track your ROI? As social media becomes more popular (3 out of 4 Americans use it everyday) way to reach potential customers, agencies are developing new ways to track accountability of their advertising dollar and the results can be pretty interesting.

As mentioned previously, social media is a term that collectively refers to public relaions, customer service, brand loyalty, networking and customer acquisition. Most importantly it is a two-lane process that requires customer participation in order the achieve success. Therefore there are also many different levels by which you can measure your company's social media performance.

The following is a simplified case study:

Step One: Make the Engagement

For those commitment-phobes out there, don't be scared. Engagement is a popular buzz term for how you interact your audience/customers. It is also one of the metrics you can use to determine how your brand is perceived. For example, lets say that you have own a music store. your website consists of merchandise, a music review blog, concert info, and an in-store signings calendar. Your goal is to generate buzz about a new local band and increase interest (sales) of your inventory.

To achieve that goal you have dedicated an entire week in your blog to profiling each member of the band and their influences. You have also placed their CD album in a high-visibility area on the main page of your site, added sample tracks, and run interactive banner ads on serveral common interest forums.

Step Two: Do the Math

With this in mind, you have what can be called "moderate-value activity" and "high-value activity." Moderate-value activity are those actions that customers take that exhibit a passive engagement (reading the blog, browsing the merch or signing up for a newsletter. These actions still benefit the company in the long run, but they don't quite meet your goal.

On the other hand you have high-value activity such as purchasing a CD, downloading sample tracks or commenting on the blog. These actions are the result of a better engagement the customer and therefore will result in better sales.

More information
Conversation Marketing
Social Media Ad Metrics
Emergence Media