Simply put. A Return on Investment is the income generated (usually over a period of a year) on an investment.

A Return on Investment or ROI is the foundation upon which any business built. Business by its very nature is about optimizing profits. If this is the objective there is only 1 way to measure this and that is ROI.

Michael Gerber in his book "The eMyth" speaks most profoundly about the myth of success and profitability attached to entrepreneurship. He discusses the flaw that many technical employees make in leaving their jobs to start a business on their own. Their belief is that they are doing everything anyway, so why not do it for themselves. The fatal mistake that they make is that piloting a profitable business is primarily about marketing and managing. And integral to this is the ability to assess return on Investment. 

Social Media Marketing is undoubtedly in vogue. Even more so over the last 6 months where everyone is now tweeting and swopping photos and comments on Facebook. Social Media has become a flood led by an ever increasing tidal wave.

Its HERE! Its NOW! ..and it works, BUT it needs to be measured and the only way to measure it is by way of this basic business principle ROI.

As Michael Gerber described in his eMyth - running a successful and profitable business is not just about knowing how to make the product. So too in Social Media Marketing, is it essential to take a business approach and measure, measure, measure all the way through the sales funnel and to the bank.

There is much debate around Social Media Marketing and whether its a Scam or Strategy, measuring ROI removes the debate and crystalizes the current trend towards implimenting a Social Media Marketing strategy as part (at least) of any marketing plan.