Friday, April 1, 2011

The ROI of Social Media

There's an interesting article about social media in today's Financial Times. In "The Fickle Value of Friendship," reporter Tim Bradshaw looked at the concern regarding the return on investment (ROI) in accruing a large number of followers.

More than five years ago, blogger Paul Gillin identified the lack of social media benchmarks to be a significant problem for marketers. For example, we used to look at ROI based on circulation figures of print newspapers and magazine, which is why so many people like tracking the number of followers -- it's a figure that seems most like audience reach.

That concern about how to measure success and payback from the effort focused on social media has been one reason our clients -- until this year -- had been on the sidelines. We've seen a significant shift this year, and I'm not sure if it's because (a) the market seems like it's finally on the road to a real recovery or (b) Facebook's 600 million users validate social media as more than a fad -- or a combination of the two.

In fact, last year Gillin revisited the issue of social media benchmarks and ROI in an article, "B2b marketers still looking for return on tweets." Here's a point Gillin made: "The souring of marketer attitudes toward social media first became evident to me last spring when I worked on a survey for B-to-B magazine that found that nearly half of 400 marketers surveyed were disappointed with the results they were getting from Twitter. A little further exploration revealed that those expressing the greatest disappointment were using Twitter for business less than once a week. That’s like blaming your lawnmower for making your lawn ugly when you only cut the grass every other month."

On a very local level, we've found that social media can make a difference (you can see a case study of ours here) -- and that probably proves the point made by James Whatley, marketing director at 1000heads in Bradshaw's FT article. It's a point worth considering.
“To be completely up front about it: there is no ROI for any social media programme.  However, there is definitely provable ROI for social media programmes that are set up to do something. It’s all about setting a clear objective.”
It's not enough to be engaged in social media. You need to have a clear objective.

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