I get a laugh when I read online conversations about people spending hours tweeting and chatting about how to measure “social media influence” as well as the “return on investment” (ROI) from social media. It’s almost as if these people are either 1) having a hard time convincing their clients of why they need to pay for their social marketing services and/or 2) they themselves are trying to figure out a way to “dupe” the system and be seen as more “influential” in the social arena, thinking that there are potential benefits in doing so. I’ve already covered my views of social media influence metrics such as Klout and PeerIndex in previous blog posts, but today I want to tackle the concept of “social media ROI.”
When I talk about social ROI during my social media workshops as well as in a chapter of my upcoming LinkedIn marketing book, I do it in a very holistic way: Did your strategy and tactics meet your planned objectives using the time and resources you had projected? That’s because social media can be utilized inside a company for so many different things, not just marketing, but areas that are normally considered “cost centers” like human resources, legal, IT, and public relations. Have you ever calculated the return on investment of your HR division? This isn’t to say that the topic shouldn’t be discussed, and there are also some great books out on the subject (I recommended Olivier Blanchard’s Social Media ROI in the appendix of my own upcoming book).
So here’s my take on the concept of social return on investment: Social media, like your website and internal IT technology, becomes part of your company’s infrastructure over time. It’s not a question of having a robust social presence just like you need a robust website: You simply must have them. For professionals, I call it your “Social Infrastructure,” which is why we feel compelled to be on sites such as LinkedIn and Twitter to network and keep up with the latest news recommended by our social circles. We see benefits from doing so.
The same is true for corporations. Fewer and fewer of them are asking about ROI but proceeding forward in their investments and trying to get better and better results. They understand that social media must be measured, metrics created, and objectives met. But it’s not about social media ROI: It’s about Business ROI. Did your social media efforts, at the end of the day, affect the entire corporate bottom line, and how did it positively or negatively contribute to it.
That’s why many can’t understand social media ROI: Because they don’t have experience with being responsible for the ROI of a business. It’s also the reason why there can never be a universal tool to measure this just like there can never be a universal social influencer measurement tool – there are simply too many variables and varying objectives. Not to say that tools can’t be created to create metrics that we can use as part of our holistic analysis of business return of investment, but I digress…
Social media in itself is not a strategy – it is a tool, a tool that is integrated into the things that your company has always done. If you think your company can sell an inferior or bad product through the power of the likes of Facebook, Twitter, and LinkedIn, think again: It will actually work against you by amplifying the negative aspects of your company.
So let’s stop talking about social ROI and start talking about how to utilize social to help increase Business ROI.
What’s your take?