The ICUC Glossary: ROI

The ICUC Glossary is a resource, providing definitions to commonly used industry terms.

ROI literally stands for Return On Investment.  ROI is most often expressed as a quantitative measure – think: reports, figures, number, data.

In the social media space, when we speak about ROI, we’re talking about the benefit derived from social media activities.  If a business invests time, energy and money into social media, the ROI is what benefits come back to the company as a direct result of those efforts.  Often times, the investment made into social networking isn’t one that has a direct monetary value.  Thus, the return isn’t always reported as a dollar figure.  Breaking it down into even simpler terms: a paid employee may very well use his or her working time to build a profile on a social media platform, creating content, engaging with other users and so on – those hours and efforts are the direct investment, not money (most social media platforms are free to create anyways, it’s the graphics, content, and hours of man-power that have a monetary value).   Then, the return that comes back to the business isn’t in dollars and cents either.

Some terms that can indicate the return on (social) investments are: followers, fans, friends, shares, likes, comments, re-tweets, etc.  Traffic, activity, conversation, and engagement are the returns that a company hopes to get out of social media networking.  All of these lead to increased brand awareness, more business, and ultimately increased revenue.

Revenue is the ultimate measure of ROI, but it’s not the only way to indicate that social efforts have been successful.

Many tools and platforms claim to provide accurate ROI figures – it’s a leading competitive area in the industry today.  The Internet presence of a business is now more important than ever, and ways to gauge the success of those efforts is crucial to any business’ budget.

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The ICUC Glossary is a resource, providing definitions to commonly used industry terms.  Jargon is a part of any business; especially in the ever-growing world of social media and Internet culture, staying on top of the words we use can be challenging – but doing so is vital.  The ICUC Glossary is a living document with new submissions being regularly added.  If you have a word you’d like to see featured in The Glossary, please email us.  We’d love your input! Email: rosed@icucmoderation.com