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Return on Investment (ROI) refers to the ratio of how much a company is committing towards a certain investment against how much the investment brings back into the company. The company could be investing man hours, energy, money and so on.

Ideally, the investment is supposed to bring in traffic and money that justifies the resources spent on it. Therefore, the question by most entrepreneurs and business managers is, does investing in social media result in cash flow for the business?

Social Media Marketing Versus Radio Advertisements

Radio advertisements have been used for a long time. Most marketing departments seem to favor it since ROI is feasible. According to a research done by Nielsen Catalina Solutions on 10 top brands, including Coca-Cola ,that advertised on Clear Channel Radio Station, their return on investment was quite impressive. The average return on investment was $6 for every $1 spent on the ad. These data sway most marketers towards radio as a reliable way of advertisement.

Usually, when an ad starts to run on a particular channel, most companies report an increase in their sales. This remains the status quo for most companies as long as the ad runs on the radio. Typically, after the ad stops to run, the sales start to decrease slowly by slowly. This is because radio helps to keep the product in the conscious awareness of the consumers. Once the ad stops running, other ads make up space and most customers switch to the most recent product on the radio. Therefore, to keep up the sales, a business must keep up with the advertisements

However, with social media, it is not as easy to calculate the ROI. The is because most companies lack the expertise to calculate the ROI or do not have the necessary tools. It is important to note that social media ROI can be calculated with the right tools. Social media marketing also works differently from the radio mainly because of the following reasons.

Radio ads are only accessible at a particular time and to only the specific people who listen to the channel. On the other hand, social media ads are accessible anytime and to anyone who can access the internet.

Due to the limited space in radio ads, the message is direct and hard-hitting. However, social media has unlimited time and space, therefore the message is mostly general. Due to these reasons, social media marketing usually takes time, every time a person sees the a the image is imprinted into their consciousness. After interacting with the ad several times, they end up learning more about the company on social media and after some time the become actual customers.

Therefore, for a business to convert their online followers into actual customers, they need to take into account the following points:

• Keep your audience informed: It does not add value to a business to just have online platforms. For efficiency, the platforms should be updated with relevant information about the business. These could be updates on a product launch, activities and so on.

The platforms should also be managed by a person who is proactive so that they can be ready to interact with clients especially when the clients have questions on certain products. The platform should be a company’s virtual front office. Failure or delay top attends to customers translates to poor customer services which result in failure in converting the audience into potential customers.

• Make sure the social media presence portrays the business expertise in that industry. Failure to portray confidence in the company and its products will make the audience lack confidence in the products too.

However, a business should be careful not to claim to deliver what it cannot. The fake persona might get the business many customers at first. However, after the customers are disappointed by the services offered they will most likely flood the business’ social media with poor reviews leading to a decline of business.

• Always make sure that the platforms express the human side of the business. This could be by posting humanizing acts or some of the humanitarian acts the business is involved in. Such acts increase the trust of the audience towards the business.


The social media will continue playing a critical role in the marketing business. Currently, User Generated Content (UGC) is proving to be a more effective tool in social media marketing. This refers to an incident whereby a business uploads real content from a customer who has interacted with the company. For example, a real estate company could capture their experience with a client who has just acquired a property with them. This approach is more authentic and has a greater chance to attract more customers.