What is the ROI of social media? Although I’ve heard that question a thousand times in the last year, I’ve never heard (or given) a particularly convincing answer. So, I’m pleased to report that at the “Where’s the Money” Chinwag event last night, at which I spoke on the panel, I think we got at least halfway towards a comprehensive answer.
Unfortunately the answer wasn’t a nice, simple, bite-sized solution that can be jotted down, repackaged and applied. As is the case with everything social media, it was a nebulous thing, forged roughly from the outcomes of a broad-ranging, stimulating and sometimes feisty debate (another first for a social media event!).
First there was the issue of “what is ROI?”. The overall conclusion was that ROI took many forms. It could be in terms of trackable financial returns (and in most cases, this is what a CEO will expect). But equally you have ROI in terms of savings (i.e. costs not incurred), benefits accrued (such as opt-in contacts) or, and this was a tricky one, the benefits of “opportunities not missed”. While the latter raised eyebrows, Mark Rogers and Marshall Manson convincingly asserted that ROI in social media terms cannot be judged alongside the ‘last click’ method of email marketing or online adverts, but should instead be compared to street canvassing or forum research. After all, these are conversations we’re dealing with, not transactions.
Then there was the question of how to attain the ROI. It was universally agreed that in order to achieve some expected result, one ought first to expect that thing and write it down. In short: a plan would be needed. But to do this, we agreed that you should first listen to the conversations in which you planned to engage. They might be nothing like you expected (I raised the “bottled water”example, in which conversations invariably focus on the environmental damage caused by plastic bottles, as opposed to the purity of bottled water) and in that case you may need to rethink your goals before you’ve even started. And even once you have listened and planned, we identified yet another issue: there may be silos to break. Here the audience (Robin Hamman and Neville Hobson included) concurred.
To be successful social media relies on a compact of trust between participants and, we felt, there could be no better way to undermine this trust than to approach a conversation as a business, rather than a human being. Indeed the generation of trust and the imparting of value were highlighted as the seeds of ROI; the more you give, the more you are likely to receive. And of course, you must have something to give. As Mark Rogers pointed out, if you don’t know your stuff on the social web, you’ll get found out. All the Corporate Comms people in the room felt felt suitably chilled. He was spot on.
Now, the interesting thing last night was that there was a maturity about this discssion that I’ve not seen before. There were shots of “social media cool-aid” (which Robin Grant chided us for) and Geoff Watts got us all excited about tracking the fashion tastes of 24 year olds (check out stylesignal.com), but excitement aside, all of the points made were considered and, I felt, genuinely moved the debate forward. We even raised the not unlikely eventuality that Marketing might devolve across organisations, so that the power to sell and promote would lie in the hands of the “real brains” of the outfit, rather than a team of salaried spokespeople. Even in this room full of marketeers the sense of purpose was so clear, there was barely a wet eye in the room.
p.s. If you haven’t signed up yet, there are still some early-bird tickets left for our Social Media Monitoring Bootcamp, 31st March, London.