social media roi - as i see it

January 20, 2010 ·

much of the accumulated mass of information on social media concerns roi, a favorite topic of the multitudes of experts, gurus and the like on the subject.

at times i think the focus there is more abject defensive posturing to an infant medium vs. pondering on the natural course of things. i make this statement because it is such a transformational vehicle that truly rattles the cage of established thinking and the roi justification is a a natural high ground that is unassailable.

i do believe that in whole or at least in part. roi is truly important, but we may have vaunted it before really understanding how social media works for the purpose of legitimizing the new space. that being true, then i'm fine with that discussion as it seems to have moved the needle, but we need to take the foot off the peddle some.

please don't take the above (and below) the wrong way, roi is absolutely important, but let's be fair about it, especially in comparison to other media. that's where i think all the friction comes from. it's so dramatically different than other media, we have to use roi as the only point of comparison. but social media has been impugned and held to a higher standard than the old ones.

i would lump in other digital media into the same camp in terms of standards it's held to. since the dawn of digital media, the underlying technology and trackability has been both a boon and a bane to the industry.

i'm going to re-iterate this because i could be made to be an roi hater, when i'm just a malcontent. media roi is incredibly important, but it must be fair and universal across all media. i'm also going to state that my major focus in the following is around brand advertisers. that's the field i play in and where so much of the money in advertising, and more broadly marketing, is spent. there is likely a different case to be made for retail or direct response advertisers, but they are a different beast and outside of the scope i want to tackle.

my qualm with social media roi is threefold
1) the measures are meaningless unto themselves
2) the necessity to validate social media is more pronounced than with other media
3) it is myopic to view it in isolation of other marketing efforts

meaningless measures
the measures that are bandied about routinely are mostly meaningless. what does a comment, a blog post, a tweet, or whatever really mean? is that really engagement? is it really making your brand more favorable to consumers? and how is any one of those things unto itself indicative of a relationship to a brand?

they might mean something on some level. it took some time for the consumer to do each of those, so there is some affinity, or it might be artificial if say an incentive was involved (ie. contest). it's not to say those things are bad, they are quite important to the ongoing dialogue around a brand, but i wouldn't use them as the best measures of social media efforts.

validating social media
as my tangents above would indicate, there is an asymmetry in the standards between social (and more broadly digital) media vs. traditional media. social media is beholden to far more scrutiny. might as well jump right to the main point of contention and the main driver of any business – profit.

i'll come right out and say it, when have we ever directly linked brand building efforts like a tv spot, a newspaper ad, or outdoor billboard back to a sale? don't think we have. we can interpret or assume that they are doing that, but can't completely verify it, especially down to a granular level of any one spot, ad, or billboard. yet, we are asking a contest on facebook to do just that. why? doesn't seem fair.

again, i think it's because we had to validate moving the industry towards a social media mindset but now we've established a double standard.

a big shortcoming of the industry so far is we haven't put social media alongside traditional media and tracked it on the same measures. it's always been directional at best for brand advertisers, but still very valuable. these are measures like favorability, purchase intent, brand specific metrics, and the like.

this is slowly taking root, and i for one am pushing this forward on my clients. it's the fairest way to judge social media, especially in light of my final point. let's shift our efforts to promoting these bad roi readings and into making better, more standard measures.

it's part of a whole
judging social media, or any media for that matter, in isolation is folly. every marketing and consumer activity contributes to and coalesces as the sum of a brand's existence, as it impacts consumers. in reality, no one part is ever on it's own in impacting consumers. none. so why are we making social media accountable on it's own?

all types of media – paid, earned and owned – work together to make behavioral change on consumers. this can be said to happen at any one time, but also over the course of time. it is really the entire history with the brand and all the messages consumers have ever seen that make an impact on consumers.

not even direct response or retail advertisers can escape this truth. it is everything in market and over time that impacts a consumers ultimate behavior – a purchase. while a consumer may buy something because of that one ad (and use the specific tracking device to measure it like a unique url) that is not the only way in which they decided to take action.

where this is likely to be solved is greater campaign integration of social media and more holistic tracking of those campaigns. then we can get reads on how all the paid, earned, and owned media associated with a campaign are working together in a meaningful way. we may also be able to isolate any media performing better or worse, but at least all on the same scale.

that, though, is slow coming. the research has been slow to integrate new media forms in their broad brand studies. or it's in there in a token way and certainly not as robust as say tv tracking is. which is fine, because we have many years of experience there to have that level of sophistication. so it will grow for social media, but in the interim we'll be left with a gap.

wrapping it up
if anything, the limited roi values we do and can assign to social media should force us to scrutinize traditional media even more. but it doesn't seem to be going that way.

part of the problem is, the many who write on social media, that's all they do, so it is only seen in isolation. that's why i'm a proponent of not segmenting this work out to specialty shops, but rather holistic media companies (like my own) who see the entire picture of paid, earned, and owned media.

let's also consider the primary function of social media - relationship building. like any human relationship, it takes time. most don't get married or make a friendship on one encounter, however intimate. we are challenged on the roi because it has to fit nicely in a fiscal year. well, that's not realistic with social media.

so sometimes the equation doesn't balance because our efforts may be realized later. take for instance higher involvement categories where the time between purchases is longer. it's hard for any media to accelerate that, but ongoing presence over time will be valuable when that window opens. yet, we still hold accountable social media to an unfair roi standard.

in closing, let me re-iterate that i'm not an roi hater. a realist, yes. it is just another media form and only part of greater efforts. so, say it with me now - campaign roi, not social media roi.




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