Warning: Social media may be heading for a big crash in 2011.

It's not going to crash because it's ineffective. And it's not going to crash because people stop using it. It might well crash because most businesses don't know how to measure the ROI of their social media campaigns.

Are you one of those companies? Are you still trying to figure out how to measure a social media campaign and calculate your social media ROI?

Well, I have some good news. Social media can be measured and you can track its ROI—if you follow the simple steps outlined below.

Using Direct Marketing Techniques to Calculate ROI

If you run a direct-response campaign and spend $1, you'll typically generate $10 or more in return. The direct-response industry knows that statistic because it's been tracking the transactional data from direct mail, paid search, direct-response TV, and other campaigns for more than 50 years.

But what if you're new to social media or new to the world of direct response metrics? What should you do then?

In How to Make Money with Social Media, I wrote about something called the 5-3-1 program, which involves understanding the five ways Fortune 500 companies use social media, the three categories of social media measurement, and the one direct response formula that all social media practitioners should know.

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ABOUT THE AUTHOR
image of Jamie Turner
Jamie Turner is co-author of How to Make Money with Social Media. He is also the chief content officer of the 60 Second Marketer, the online magazine for BKV Digital and Direct Response. Reach him via Jamie.Turner@60SecondMarketer.com.