What’s in it for us?
This is a question every social media manager/strategist/advocate/(insert all other titles) must answer.
Businesses understandably want to see the results of their output. Measuring results, therefore, is an important function for any marketing professional when evaluating the success of marketing campaigns and initiatives.
The common standard for measuring results is ROI, or return on investment.
ROI = (Gain from investment – Cost of investment) / Cost of investment
“Finding out a campaign’s ROI is extremely important – it helps you plan for future marketing projects,” wrote Tony Popowski, a contributing writer for Business 2 Community.
So we know ROI is important for measuring a business’ success, but how do you measure social media success using ROI?
In short: you can’t. Well, you shouldn’t
Here’s why.
I’m not saying that you can’t be successful in social media, but social media is just one ingredient in the recipe for success. It is not the be-all and end-all, it is a tool — one tool that you have at your disposal to create success.
As much as I would love to tell you otherwise, there is no social media playbook for guaranteed success. There is no template to consistently satisfy customers. There isn’t a common recipe for delivering ROI. The only set of instructions that matter are those that you write based on the reality of your business, the needs of your customers, and the state of the market.
-From the foreword by Brian Solis of Social Media Geek-to-Geek
In his article for Business 2 Community, Kyle Lacy wrote that measuring social media success should be driven by three things:
1. the customer
2. the market
3. your opinion of the strategy
“As much as we would love to give a proven value to social media… it has yet to be discovered. However, one thing is for sure…Success is based on your ability to change and adapt with the marketing… and show a return on that shift,” wrote Lacy.
An article I read recently by Tony Popowski provided a fresh perspective on the concept of social media ROI.
“ROI is the wrong performance measure to focus on when we talk about social media. Instead of ROI, we should take look at ROO, or your return on objective,” he wrote.
So what is ROO?
According to Popowski, taking the ROO approach would entail establishing an objective for each of your social media sites and measuring your success in relation to your objectives.
This approach reminds me of Katie Paine‘s approach to public relations metrics.
I think an objective-centered approach sounds like a much more sound strategy for measuring social media success.
What are your thoughts on ROI vs. ROO relative to social media?
A manager will still want some kind of numerical result to report to a VP to justify that ingredient.
I agree, Robert. Managers always want to see the bottom line. What I wanted to get across, and I hope I did, was that those numbers should be based on the whole picture, not just social media activities. I think we have to change the way we view social media as a tool in order to do that, though.
Nice writeup…Brit.
I agree that Social Media is a slice of the success pie (chart), but not all of it. I think it can play a big role in conjunction with other forms of marketing to yield results (ROO). I also think your line of business matters as far as the level of benefits from Social Media.
Thank you, and thank you for sharing your thoughts. I checked out your blog. Very cool concept, looking forward to following along.
Hi Brit,
I know this is a delayed response, but thank you for including some of my quotes in your entry. You’ve really captured the main point in your entry and through your responses. Social media is just a piece of the puzzle and we need to look at how it works in conjunction with the entire sales process when measuring its value….especially when we communicate its importance to Presidents, CEOs, etc.
Thanks, Tony! Appreciate you stopping by