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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.
Posted in Commentary, Social Media Tagged: advertising, Albert Einstein, brand, brand awareness, brand management, communications, Communications Strategy, double-standard, marketing, marketing communications, measurement, metrics, profit, public relations, reputation management, return on investment, roi, show me the money, Social Media, social media profit, Social Networks, word of mouth Image may be NSFW.
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