We get asked a lot what the ROI is on Social Media initiatives, especially with online social networks. The answer is usually always the same – if there is an event, special offer, or other trackable carrot, then the ability to measure direct ROI is far above and beyond traditional advertising. However, there are many other benefits to a comprehensive Social Media program, not the least of which is ongoing branding in this critical space. From early on, the internet and email have provided an unprecedented means of tracking results from online campaigns, but Marketers have still been relatively reluctant to jump in and go for it until it becomes so commonplace that they HAVE to. Comparatively speaking, they spend millions on other ‘branding’ initiatives in Print, Radio, and TV campaigns that have virtually no ability to track direct ROI.
Our friend Lewis Green wrote an excellent blog on this topic on Marketingprofs.com. I thought it would be helpful for people to read. In his entry, Lewis speaks specifically about the ROI of blogging, but the principles apply to all forms of Social Media.
Why do we get so caught up in tracking specific increases in revenue when working in the online world, but largely ignore this when dealing with traditional media? Lewis challenges the traditional definition of ROI and the focus on revenue exclusively in his entry and asks things such as whether the efforts result in a better experience from the customers’ perspective, whether the efforts cause the company to ‘get noticed’, etc. That sounds reasonable to me. I mean, let’s be honest, keeping existing customers happy and coming back for more is probably the easiest and cheapest route to sales, right? If you follow that logic, what can be more important than maintaining an open and productive dialog with these customers? Can you measure the ROI of this dialog? Maybe not with hard figures, but you sure as hell know when people are posting comments, asking questions, sending messages, spreading the word to friends, etc. Isn’t that what we all want in the end? And how about getting in front of new potential customers. If you know that X number of people downloaded an application onto their Facebook page or MySpace page, or you have X number of subscribers to your blog, or you got X number of comments on an entry you posted, or there were X number of Tweets on Twitter about your brand, etc., doesn’t that begin to paint a picture that you can use to justify the investment in involvement in this space?
Check out Lewis’s entry and see if it makes sense to you too.