Doubters notwithstanding, there are some very useful methods and tools, available right now, to understand the return on investment (ROI) for your social media marketing efforts.
I’m not revisiting those here. Rather, this post is about two arguments I’m still seeing pop up time and again from speakers, marketers, columnists, and strategists alike. Arguments that will get you exactly nowhere when it comes time to fight for, and justify, your social media budget.
What are they?
- The Opportunity Cost Argument aka “What’s the ROI for social media? Well, what’s the ROI on picking up the phone? What’s the ROI on your secretary?” This line of reasoning uses fear to scare managers into investing in social media efforts, in effect saying that your customer expect it, and if you’re not active, not listening or engaging, there is a risk for huge customer dissatisfaction.
- The Aspirational Argument aka “Those who really know social media aren’t talking about ROI.” This relies variously on the appeal of the shiny and new mixed with the fear of being left behind as a company or professional.
Don’t get me wrong, buried in both arguments are grains of truth and worthy sentiments, particularly around opportunity cost. Depending on your industry, yes, your customers might be very active on social media and your lack of monitoring and engagement could result in both lost opportunities or worse, a disconnect with the needs and interests of your customers.
But acknowledging that doesn’t excuse you from taking steps to quantify what kind of ROI you could reasonable expect for taking the social media plunge – whether it’s a concrete metric like new sales generated or a more indirect, proxy ROI metric like higher customer satisfaction. Your job as a business professional is in part to understand what your company stands to get for money you propose investing – relying on fear and generalities unsupported by numbers is just not going to cut it.
I have less sympathy for the aspirational argument, which seems to be flung around by people who have never run a serious budget, are making their living on the speaking circuit where you aren’t generally accountable for actual results, or simply can’t be bothered to do the hard math. Supporters of this argument fall back on the “cool kids” line of thinking, making others feel dumb or like anti-social luddites just for daring to ask smart business questions.
Social media is rapidly maturing as an element in the marketing and communications mix, and just like the other elements – email, direct mail, TV, PR, digital, etc. – it is reasonable and necessary to try to calculate what you get out of the resources invested.
Don’t make the mistake of falling back on either of these two arguments if you expect to get your next social media initiative funded in the real world.
Social media return-on-investment (ROI) is one of the most hotly – and frequently – debated topics in the industry. Dressed up however you like, the question still boils down to “Does it work? How can you tell?” In a multi-part post series called “Social Media Revisited” on the Ignite Social Media blog I’m exploring four different models in smROI and how they might be applied.
(This is a partial repost of an article I originally wrote for the Ignite Social Media blog, included here to share with my readers. For the full length post, see the link above).
It’s an old saying that crops up whenever people talk about metrics: “You get what you measure.”
One corollary to that statement is “be careful what you measure.” Why? Because as anyone who has worked in marketing for any length of time can attest, target metrics can rapidly take on a life of their own.