When you hear any of the following terms or words, make sure you ask the person using them what he or she means by them. And if their definition does not match the one below, be very, very careful who you are dealing with, and what you are buying.
ROI is an acronym that stands for Return On Investment, an accounting term for a specific calculation of financial results. The formula for calculating ROI is:
ROI = (Gain from Investment – Cost of Investment) / Cost of Investment
That’s it. There is no other definition, despite the many uninformed people who use ROI as if it means “results.” So unless you can calculate net gain, you can’t measure ROI. Many people seem to think that ROI and measurement are the same thing. They are not.
Measurement is collecting data that will help you make informed decisions about your performance. Good measurement should tell you what is working and not working in your programs. Measurement is often mistakenly used to justify someone’s job or program or budget; it should not used to justify anything.
Impressions are the circulation figures of a magazine or newspaper. Impressions, reach, and opportunities to see are often used interchangeably. But they really aren’t. And they are numbers, not measures of success. Frequently, when people say that we need a standard measure for PR, they refer to a Nielsen Number. That “number” was in fact a rating that measured the potential reach of a television broadcast. It was invented to provide a broadcast version of impressions. Today, people want a Nielsen Number for social media, which is very difficult to come up with, because about 85% of all social conversations take place in private places such as email or private Facebook pages, or off-line all together.
4. Social Media: Earned vs. Owned
Most people want to measure social media, but they blur the lines between earned and owned social media. Conversations that you start on your Facebook page or YouTube channel are owned social media, and it is relatively easy to measure their success via Facebook Insights or Google Analytics. Earned social media is made up of all those things you can’t control. Like all the Tweets, blog posts, and other activity that is swirling about in the cyberverse that may mention you, but in ways that you may or may not find desirable. Remember, there is a reason they call it earned.
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