AaronHillyer.com

I’ve been hearing a lot of people lately ask each other, “Are you REALLY making money in social media?”, “CAN you make money in social media?”, and my personal favorite: “How do you measure your social media efforts / ROI / etc.?”

First of all, the QUICK answer….yes I AM making money in social media and there are LOTS of people doing the same and plenty of people making a LOT of money in social media. How? Well, that’s a separate post (actually, book/course or series of coaching sessions). But, the question remains:

How do you MEASURE these efforts?

Really, there are a lot of potential Key Performance Indicators (KPIs) that we could investigate. So as to simplify this discussion, let’s speak simply of monthly net revenue. In other words, how much money do you yield at the end of the month after all the expenses are accounted for.

So, we’re going to look at two main factors (again to simplify things):

• gross revenue
• total expenses

The above two would have to use the same time frame (monthly of course). Grabbing the above, we yield:



gross revenue - total expenses = net income

That’s it! Well….you’re saying….Aaron, isn’t there more to it? Actually, it depends on your needs. I could answer, “Why? Does there HAVE to be?” For me in some cases, that won’t suffice.

Why not?

Well, first of all, we greatly simplified our measures. Secondly, what if there were expenses that extend beyond this time frame tied to the same income (do we count it? Most wouldn’t, but you could)? What if there is income BEYOND this period? This is often referred to as customer lifetime value. In the above case, we didn’t account for the fact that the time spent once may actually pay for itself for days, months, or years to come, no? There are a LOT of other smaller factors that we could account for.

But…here is MY suggestion

If – and only if – you’ve already applied, studied, learned from, made improvements, studied, learned, from, etc. That cycle…you’ve reiterated it a few times….at THAT point, then maybe you want to complicate things a bit then and add on further KPIs (and if so, drop me a line or give me a call at 505-500-GROW and we can strategize how to do that).

But, for now….

Let’s forget about all that and figure out HOW to measure your gross revenue and total expenses in social media. For the sake of simplicity (boy, we’ve talked simplicity like 3 times now and I’ve just gotten more complicated each time, haven’t I?), let’s just use ONE social media channel…Twitter. Why Twitter? Why not…it’s hot and it’s growing like crazy and everyone’s talking about it so why not.

Let’s first look at expenses. To do so, figure out how much money goes into it (time spent on a consistent basis, any graphics work, etc.) You may want to divy certain tasks (such as a blog post that makes it to Twitter) up to the various channels through which partake. For example, you say 10% of your blog post expense is allocated towards Twitter gain (or perhaps all social media in general – provided that you don’t consider blogging part of the social media sphere – I’ve heard most people include it but some do not).

So, in this example, let’s say you spend $1,000 monthly and 10% goes towards the Twitter channel. So, you’re spending $100 on Twitter in just Blog posts. Now, after adding in all the other expenses (ask yourself where else you’re promoting Twitter and factor that in also), including, of course, the time spent sending Tweets, responding to Direct Messages, etc. Let’s say you’re spending $500 on Twitter monthly. Now, switching gears….

You must find a way to track all your revenue that is a direct result of your medium (in this case Twitter). If all that traffic goes to one place, and it’s your own, then you have several ways of doing this (such as analytics, creating unique codes for each of the links, etc.) Additionally, most of the url shortening tools out there these days provide efficient means of tracking so you can track other click throughs for affiliate products, etc. However, just tracking the click throughs is not enough. You need to track it all the way through the purchase and in most cases beyond that (remember the customer lifetime value?)? Let’s say that through affiliate sales only by clicks generating only from Twitter, you made 6 sales at $200 each, or $1200. That is your gross revenue (assuming you made no other income elsewhere – in our “simplified” example, that is it).

Now, you subtract your expenses from your revenue and voila! So, $1200 – $500 = $700. In this example, you’ve made $700 for the month on Twitter alone. Not a bad start.

Now that you’ve done that, you’re obviously going to want to look at how you can improve. That’s another post coming soon….

-Aaron Hillyer, CITRMS