Return on Investment (ROI) is a simple concept: You set aside something of your own, be it time or money and expend it with the hope of getting something in exchange. ROI measures the profitability of your returns, when compared against your costs.

Many people have talked about ROI in relation to social media and one usually examines the performance of a social media marketing campaign using specific metrics like traffic, links or comments.

Some measure ROI in an more abstract way, by monitoring the amount of buzz or conversation in a community and the opinions of the public.

What you choose to measure is dependent on your goals, or what you want to receive as a return. If you’re purely interested in building links, your costs and investment should be measured alongside how many links you receive.

If an activity does not efficiently help you to procure links, you should reduce your investment in that area. Conversely, if a specific activity maximizes your efficiency in getting links, you should increase your investment in that area.

However, things are a little different when it comes to social media and specifically, the process of networking with others through various social media channels such as Twitter, Linkedin, Stumbleupon or Facebook.