Debating Social Media ROI
If you’re at all connected to social media marketing, undoubtedly you’ve confronted (or been confronted by) the question, “Does all this stuff pay out?” Unfortunately, if you are looking for a simple yes-or-no answer, you won’t find it in this newsletter. What you will find, however, is a summary of various points of view on the subject and a framework for assessing the ROI of your social efforts.
Syncapse: Start by Calculating the Value of a Facebook Fan
Like most social media measurement companies, Syncapse has a vested interest in proving that social can deliver a calculable ROI. As such, they’ve publishednumerous reports and gone as far as to quantify the value of Facebook fans for individual brands, arriving at an average value of $174 per fan. Assuming you can acquire fans below this value, voila—ROI!
Unmetric: If the ROI of Social were Calculable, We'd Have Done It Already
Lux Narayan, CEO of Unmetric, another social measurement company, argues, “If social media ROI were indeed determinable, we’d have solved it over a not-so-busy weekend.” His argument hinges on the fact that there are simply too many variables to isolate a straight cause-and-effect relationship and that attribution modeling will, at best, help you establish correlation, which is not the same as causation.
Hayzlett: "What About Your ROI (Return on Ignoring)?"
| With this pithy quip, Jeffrey Hayzlett, author and former CMO of Kodak, pointed out that the social conversation is going on with or without you, and there’s little upside in not being part of it. In fact, there’s a real and potentially costly downside to not taking social seriously, especially if your competitors are listening and responding ahead of you. But, of course, Hayzlett’s ROI won’t help much when it comes to budget allocation. |
Neisser: The Non-Linear ROI of Social
| In a recent blog post, Drew made the case that social media performs too many roles (from customer service to research and lead generation, etc.) for a company to make definitive ROI calculations. As such, he suggests that brands think in terms of a series of causes and effects that often occur in a non-linear fashion, an argument supported by Robert Moore of Internet Media Labs, who provided a real world example of non-linear ROI (see Drew’s interview with Rob here). |
Franklin: It's Worth the Pursuit Even If You Don't Get There
| Famed inventor, revolutionary and unheralded social media guru Benjamin Franklin advises that just because you can’t achieve your goal doesn’t mean you shouldn’t try: “Though I never arrived at the perfection I had been so ambitious of obtaining, but fell far short of it, yet as I was, by the endeavor, a better and a happier man than I otherwise should have been had I not attempted it.” |
Final Note: Franklin undoubtedly would have embraced the science of social media, wondering at the same time how all of these innovations could be put to use for the betterment of society—a discussion we’ll save for another day. In the meantime, if you’re having trouble calculating the ROI of your social efforts, feel free to call, email or tweet us.