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ROI (Return on Investment) in Online Marketing: The Importance of Being Earnest

This article is written primarily for the real estate industry and social media marketing, however the concepts apply to all online marketing disciplines and sectors!

ROI: Return on Investment: Online Marketing

Online marketing requires more than counting cash to succeed!













Ha!  Based on the title above, I bet you thought we’d be discussing the more ephemeral elements of social media marketing today.  Surely you know me better than that by now! We’re Streetsmart for a reason:  when the chips fall, it’s all about results (real results – be they increased visibility online to actual conversions in property sales).  I’d be willing to wager: most estate agents out there don’t have the first clue about what results to look for, or how they came to the results that exist.  How many of you are actually tracking your source enquiries? In other words, do you ask each and every customer how they found their way to you?  Hands up!  I see very few hands…  Naughty.  So the billion pound questions remains:  how do we know what to spend where? How do we calculate the value of our digital and social media activity in business terms our bookkeeper can get their heads around?  Simples!

Keeping it Real

Results are everything.  In our hard pressed economy, and our beleaguered sector, results make a very real difference in our lives. On a personal level, it’s the difference between sipping champagne or enduring Gallo.  On a professional level, it means flourishing in a troubled economy and setting yourselves up to rapidly expand and take advantage of the downturn in all of its opportunities, or clinging to mere survival.  But in a world with so many customer ‘actions’ and in the case of many businesses, a lack of hard ‘conversion points’, what metrics are needed to make sound business decisions about which marketing channel works best for you?  Everyone bangs on about social media – but is it working for your agency?  Are you seeing the return on investment (ROI) you’d expect?  If not, you’re not doing it right.  That’s as real as I can get, though let us not digress from today’s most serious of topics: return on investment.

ROI: More Bang for your Buck

You’ve got property stock and you either a) need more, b) need to shift it or c) need to accomplish both.  Your chief concern is property marketing.  You have multiple channels to get your business in front of the right customers.  But how can you measure what’s working and what isn’t?  Smart business owners know that diverting budgets from underperforming channels to more effective arenas pays big dividends, rather than following the herd and simply marketing in the way ‘everyone else’ does it.  You may feel safe reviewing your portal statistics, but it’s just not enough.  Property marketing portals, provide monthly reporting and analytics to show how much your property listings were engaged with on their site.  But that’s only the beginning of the story.  What happens when the customers arrive on your doorstep, or pick up the telephone and ring you, or navigate to your website and request a viewing?  How do you know where they came from?  The ads? The billboards?  Google search?  Facebook?  Portals?  Tracking your source enquiries at the point of contact is the single most important thing you can do for your business.

“But it will take time and customers don’t like it!”  You know, if you can’t ask a quick question in all of your customer contact with ease, then you’re in the wrong business.  Creating lasting relationships and trust is key to swaying customers for big ticket items.  If you’ve got time to get their email, you’ve time to find out where they’re coming from.   Why?  It’s VITAL in determining a true ROI figure.  We cannot do the math without it.  Okay, I am getting bored with the marketing lingo and for lack of a simpler language, we’re going to provide some clear examples and instructions.

Brains & Brawn: The Daniel Craig Way

I admit it. The above title is a shameless, unaffiliated plug for a current obsession of mine (flying the flag and setting standards for all of our older gents! No excuses!).  But there is substance too.  Bond isn’t just a pretty face.  Nor is he all cutting edge technology.  He’s a smooth operater, cunning, shrewd, fit and debonair.  He knows what he’s doing, why and how – which makes ad libbing under pressure all the more successful.  He’s got it all.  And so should you.

ROI Defined

ROI is simple:  is what you’re doing making or saving you money and / or generating positive brand experiences?   Any communications channel you use should be designed from a business point of view to do one of these three things.  What ROI is not:  black magic.  You cannot massage the balance books, or hang on to outdated modes of marketing simply because you’re fond of seeing your properties in glossy printed magazines.   You must examine everything (print advertising, direct mail campaigns, your website, PPC, and social media channels) with the same impunity.

Math Lesson Alert

Are we all still awake?  Good.  Time to grab a coffee to keep you going!  So the calculation is simple. There are a few ways to calculate ROI, but let’s go with the most commonly accepted, expressed as a percentage.  ROI = money (and/or time)  spent divided by money (and/or time) made x 100.  Yes.   That easy.  So let’s represent that a little clearer:

ROI = x(money/time spent on a particular marketing channel) / y (money/time earned or saved from a particular marketing channel) x 100

So you spent 20,000 GBP on your new website.  You’ve generated 10,000 more views of your site in the last quarter as a result.  From those views, you’ve had 30 new customers, each with a value of 5,000 GBP to your business (this figure should be calculated based on the average profit margin of each customer to your business in each service level of your business – i.e. lettings/sales).   Here’s how it looks:

£20,000/£I50,000 x 100 = 13.333%.

Calculating time is fairly straightforward too.  Simply assign the hourly value of your team members and apply this value to the units of time saved.  The math lesson is over folks.  Now let’s tackle what we’re measuring.


Let’s go back to business basics.  The first step in any successful business effort is determining your key business objectives.  Whether they involve cutting costs in certain departments, getting more traffic to your website or expanding your online real estate – you can’t demonstrate ROI unless you’ve nailed this.  Take a look at all the core areas of your business performance and review your strategic objectives.  Here are some questions to ask to get to these bare bones essentials:

  • Marketing and Communications:  How are we spreading the word to our customers and potential business partners/investors?  Are we doing this most effectively?  How can we cut marketing / IT costs while increasing business?
  • Customer Service: Are we managing online complaints about our services?  Are we effectively servicing our customer needs?  Is there a way to do it better?  Can we make it cheaper?
  • Brand Building:  Do new potential customers know who we are?  How can we ensure that we have most visibility online?  How can we make sure our customers feel valued by spending less time, not more?
  • Human Resource: Are we attracting the right employees to our business?  Are we utilizing all tools and resources to do so online?  Can we cut recruitment agency / advertising fees by utilizing social media?

Brainstorm each area of your business and apply strategic objectives to the department(s) you are responsible for.  This allows a firm foundation for all of your future metrics.  Here are some example objectives and targets (but bear in mind, you must set reasonable and specific goals to each of them:

  • Sell more products or services (10% increase in new home sales, 5% rise in property stock, etc)
  • Cultivate influence and authority (more press inches and more online real estate, including engagement with key influencers in social)
  • Customer Loyalty (25% higher customer retention rate, year on year)
  • Cut business overheads (reduce customer service overhead by 20%)
  • Optimise business efficiency (15% reduction in time spent on sharing property details in social media)
  • Optimise marketing efforts
  • Open new market demographic (50% increase in traffic to site from foreign markets)
  • Increase Visibility in Market

Visibility in search engines for:

  • - Company Profile (20% increase in rankings)
  • - Property portfolio & intellectual property assets (i.e. area guides, etc) (100% improvement in ‘owning the search page’ for our properties and assets
  • Increase Influence

Developing profile of key executives to:

  • - Develop Partnerships & Relationships (2 new partners and business relationships developed via LinkedIn per quarter)
  • - Increase share of voice with key influencers (5% increase in trade/ press enquiries for key market issues)

The Holy Trinity

Once you’ve decided your key business objectives, it’s vital to round them up and assign into areas that you can focus on with ease.  With so much to calculate, I can feel your pain.  However, we recommend using our Holy Trinity (Social, Digital and Business Objectives) to help you get started segmenting your measures of success in getting to your eventual ROI calculation.

Social Metrics:  From Likes, Shares and RTs to engagement with key market influencers online, you should set up your measurement system to include:

Quantitative Metrics – The numbers: Fans, Followers, Likes of FB page, etc

Qualitative Metrics – The value of the numbers:

  • Clicks on content
  • Re-tweets
  • Shares
  • Likes of content
  • Comments on content
  • Positive customer service experiences/referrals in social
  • Social Bookmarking

Influencer Metrics

  • % of following comprised of market influencers
  • Volume of engagement with Influencers vs customers
  • @replies
  • Conversations in social (@replies, comments on blog, social bookmarking, forum discussions)
  • Increased reach via Influencer Engagement (number of new followers reached through engagement with Influencers


Digital Metrics:  These are by far the easiest measures to collect (usually via a combination of Google Analytics).  They give you everything you need to know about how customers arrive at and interact with your website.  You should look at digital metrics in two segments: micro-conversions and macro-conversions.  Metrics should map back to your original business objectives at all times, so ensure you’ve accounted for them.  Sample metrics could include:

Higher macro-conversions

  • Increased traffic from foreign markets
  • Increased traffic from key search terms
  • Property details download
  • Registration onsite
  • Requests for viewing
  • Social shares

Higher micro-conversions

  • Multiple category views (i.e Looking around your site for longer, in different property areas)
  • Download of property brochure or informational pdf
  • Increased dwell time on site
  • Customer Survey responses
  • Increased activity in registered log in area on site


Business Objectives:  These are by far the simplest measures.  Have you increased business in key areas?  Are you selling more houses?  Are more customers finding you in social media or online?  This is where your source enquiry tracking pays the most dividends.


Bringing Home the Bacon

Once you’ve gotten to grips with what to measure, your ROI calculation in social media, digital and other marketing channels should be straightforward.  Of course, we’re always here to help answer your questions and guide you.  Feel free to email me at tracy@streetsmartsocial.co.uk with your issues and we’ll continue this discussion in weeks to come.  But before we leave you all to counting, there are two key points for consideration:

  • Measuring impact on brand, sentiment and reputation is hard to measure.  If you’re getting it right, you’ve ‘averted a crisis’ – so it’s hard to measure something that you’ve avoided (like www.ihateyourestateagencyname.com or an all out petition discrediting your property management expertise),  but it’s no different to measuring PR activity in a traditional since!
  • Most marketing uses for social are about relationship building. Measuring the return on a relationship happens over an extended period of time, and you need the technology in place to capture this customer data to really calculate full return on investment.  Social, of course, can be a campaign channel, but social relationships just don’t work this way.  It’s about constant relationship building through trust and giving good content/value, to get real monetary return.

Happy number crunching!


*  This article first appeared in PropertyDrum magazine.

Streetsmart Social & PropertyDrum invite readers to take part in the world’s first real estate social media survey.  Please email tracy@streetsmartsocial.co.uk to participate. We’ll be collating the results and publishing them in a special PropertyDrum article in the near future!

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