Investment in social media

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It is quite clear that business owners encounter various challenges with respect to investing in social media.[citation needed] Among the social media challenges they face include lack of time, lack of knowledge on how to determine the return on investment, and absence of social media operational skills. Nevertheless, determining the social media ROI remains as the fundamental problem to most business owners (Kelly, 2012). In addressing this challenge, we should first define ROI. ROI is the most common profitability ratio that establishes the efficiency of an investment. In this context, ROI will measure the returns from a social media investment. However, it is factual that calculating ROI is difficult, may not be perfect, and depends on the applied returns and costs. Actually, there is no universal way of measuring the ROI of the social media commitments (Kelly, 2012). As such, some business owners tend to count how many Facebook fans and Twitter followers they have or how many retweets and likes they enjoy.[1] However, this may not be an effective measure of ROI. We can measure ROI using metric tools that foster conversion measurement and optimized CPM, which enables Facebook ads to reach the target audience (Burg, 2013). This enables the investor to know who clicked through their ads thus enhancing future business planning. In addition, we can measure ROI by analyzing interactions by multiplying the number of received likes by the number of friends of those likes witnessed the action. This defines how far the advert went. Moreover, we can analyze traffic to determine the ROI in social media efforts (Harden & Heyman, 2011). Indeed, different social media understand the business owners need to evaluate their ROI in social media and thus there is a provision for built-in analytics tools for following engagement, likes, and shares (Burg, 2013). This helps the marketers to determine how often people find the marketer’s page through the social sites. For example, on Facebook, one can analyze the comment to like a ratio of posts while on Twitter, one can analyze the retweets to tweet ratio. Notably, the higher the ratios, the higher the ROI is