Debbie Weil argues that we shouldn’t be talking about the ROI of social media, but rather the return on influence. Why? She says:
Short answer: because the return is soft. The benefits of incorporating social media strategies into your marketing are real (and can no longer be ignored) but they’re not normally measured in dollars. Like PR, you say? Yes and no.
Social media, which includes corporate blogging, is still so new for many marketers that it occupies a niche outside corporate PR or interactive marketing (the latter still a code phrase for online advertising or email marketing, neither of which is particularly interactive).
Second short answer (which ties in with the first)… because social media is a new phenomenon for which we are still developing metrics and measurement. There isn’t agreement yet on what these metrics should be. Velocity? Engagement? Conversation index? Reach? Community? Some combination. Whatever you choose, it’s hard to compute a dollar or numerical value.
This is an important topic and Debbie offers some interesting thoughts in the ongoing conversation about it. How do we measure this stuff? It’s a good question that has got to be answered any time that you’re making a case for devoting business resources to an activity.
As the conversation unfolds (and Debbie is absolutely right that for something so new, there’s no definitive answer), I find myself wondering how much it’s being shaped by a generation of marketers accustomed to having lots of data. As a group, marketers have become analytics junkies; we have access to tons of data about clicks on our ads, activity on our web sites, conversions from different market segments, and so on. And that’s great stuff. (It’s not enough, which is a whole other topic, but it’s great to have.)
But for those of us who remember when data was harder to come by, the discussion of social media ROI is eerily familiar. What was the ROI on a year’s worth of print ads in a specialized professional journal? Broadcast ads? A great PR program?
It’s challenging, even today, to tie activity to revenue. Sure, you can dive into a pile of clickstream data and see some people who are doing just what you want: coming to your web site from that AdWords add and following a neat path to the shopping cart or information request form. But more often customers have this maddening habit of doing what they want to do: coming to your site, looking around, and leaving. Coming back the next day. Sending a link to their boss or their assistant. Calling you on the phone and not bothering to tell you how they found you. (Darn customers!)
Pre-web, it was even harder. And I think that post-interruption-marketing, it’s going to get harder again.
I remember lots of discussions of the value of our marketing spend in the late 80s and early 90s that boiled down to, “We can’t identify specific deals that came from the ads in the The Journal of Conceptual Widget Engineering, but we know that our customers are influenced by them.”
What it often comes down to is soft measurements. After six months of the PR campaign, recognition of our key brand attributes was up 20% in the target demographic. When we stopped running the ads, inquiries dropped 10%. And of course the broader studies that showed that companies with consistent advertising program were, in the long term, more profitable than those who didn’t. (Usually proudly presented to us by the sales rep from a publication.)
Remember, soft measurements are fuzzy measurements. They are measurements of factors that affect revenue and profitability, but do not offer us a neat activity-revenue-profit chain of events.
For marketers who grew up with an ocean of data, this is likely to be frustrating. For those of us who didn’t, it’s likely to be familiar. And no doubt at some point someone will quip, “I know that half my social media budget is wasted, but I don’t know which half!”
I’m not suggesting that we give up on developing solid measurements of social media ROI, of course. I’m just pointing out that more clickstream data is unlikely to provide those measures, and we’re going to have t think creatively about how we measure, and how we present those measurements to business decision makers. Think soft!