The Social Media Smokescreen

Posted on December 7, 2009. Filed under: Commentary, Social Media | Tags: , , , , , , , , , , , , , , , , , , , , , |

Today, at a networking meeting, I met someone involved in marketing and branding. We got to talking about social media, and quicker than you can type a tweet, this guy brought up return on investment.

He asserted, unless you can clearly identify the monetary payback on social media, many brand managers won’t give it the time of day.

Now, I understand that ROI and the bottom-line matter; a lot. Nevertheless, it’s curious how when the subject of social media comes up, you can often count the seconds till ROI is mentioned. Why is that?

What’s with the double-standard?

I’ve not heard a hue and cry over what’s the absolute dollars and cents return on investment for numerous other aspects of marketing communications. Like a sales kit. Or a press release. Or an event sponsorship. Or even a website (unless the site is e-commerce based, though for the sake of this example, I’m referring to a corporate/brand website).

And I shall defer from quibbling over what the exact definition of ROI is — used in this context, the general understanding is that it relates to how much profit are we going to make?

The point isn’t what is or is not ROI, but rather why you must know from the get-go what’s the end-measure for a social media program, when other types of marketing and public relations are not all held to this same standard.

“Everything that can be counted does not necessarily count; everything that counts cannot necessarily be counted” – Albert Einstein

No one’s come up with a formula to accurately surmise the precise profits gained from buzz, brand affinity, or word of mouth. It’s iffy to assign a cash value to a news story that appears about your company, product or service. You don’t necessarily know how much money is generated by a TV or print campaign, either.

I’m not suggesting there’s no reason to gather metrics for social media. There are ways to monitor social media activity and impact. You should benchmark and keep track of how the program is going, and, where possible, identify the return.

It’s more that I’m baffled by this tendency to immediately raise a “where’s the ROI?” beef at the very mention of social media. Which, for those who don’t already know, can drive sales as well as do wonders for brand awareness, customer service, reputation management and search engine optimization (among other things), when properly executed.

A smokescreen tactic?

I wish I had a buck for every article I’ve seen in just these last few months about the ROI of social media. I could take a nice vacation with the windfall.

My hunch is show-me-the-money-or-forget-about-it brand managers/marketers are comfortable with how they’ve been doing things for years. They like the old ways; which are one-way. Social media is two-way. They’re unaccustomed to direct engagement and are terrified of what might come back at them. They fear losing control of their brand.

So a smokescreen gets thrown up due to fear of the new, aversion to risk, and an inability to admit you just plum don’t understand something.

Looks like it boils down to oh-me oh-my rather than ROI.

– Deni Kasrel

Is ROI truly a relevant measure to determine the effectiveness of social media? Do you have experience in calculating the ROI of social media? Please share your stories. Comments welcome.


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6 Responses to “The Social Media Smokescreen”

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Word! At the Marketing to Moms conference in Chicago, Stacy DeBroff of Mom Central gave a terrific speech about SOI vs. ROI, SOI being “sphere of influence.” When your brand is being discussed by influencers, your brand benefits, even if you can’t chart on a graph the precise return. I think your comments about fear of two-way dialogue are spot on. Change means losing control. But any brand manager who resists changing to embrace social media will experience the ultimate loss of control in the near future.

Thanks for sharing that info about Stacy’s speech. It’s also said that social media provides “return on influence” — a similar idea that recognizes it’s not just about dollar valuations. Indeed, like it or not, brand managers need to embrace social media sooner or later, and as you note, preferably sooner, because there’s a risk to ignoring it, too.

I think that quote from Einstein sums things up perfectly.

Agreed, and he was a pretty smart guy -;)

I think that some people have a limited set of tools that they try to work with; in this case “ROI” becomes a sort of code for “why should we do this?” or “how do we measure success if we do this?” These are good questions and they come in reaction to the frequent “We need to be on Twitter and FaceBook now!” from executives with no idea what business benefit Twitter and Facebook might bring, but just want to be seen as cutting edge. It serves no-one to roll our eyes and say, “phhht.” That said, I like the idea of SOI (which I hadn’t heard before), and think that it can address ROI expectations by reframing the questions and goals.

You bring up a good point and I agree that one should not jump on the social media bandwagon just to say you’re on it. You need to have goals, a strategy, and tactics, to ensure you gain something from the effort. Both questions you mention — Why do it? How do do we measure our success? — are valid and should be part of the process.

My point with the post is to address the fact that certain outcomes/returns derived from social media, like many other aspects of marketing and PR, are not readily tied to a $ figure. I think we’re essentially on the same page here. Thanks for noting that the ROI question may be code for other questions as well.

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