As an owner of a social media marketing and design company, it can be hard to explain the return on investment in accordance with social media use. I think many of us (marketers) try to find a return on investment because:
A. It can be easier to sell the marketing because of an ROI explanation.
B. We believe so much in social media. We want to use it… every chance we get.
Jason Falls has one of the best explanation (and personal views) of ROI in Social Media in his post: What is the ROI for Social Media?
In the post he starts out by stating a quote I have posted in my office on the wall:
The problem with trying to determine ROI for social media is you are trying to put numeric quantities around human interactions and conversations, which are not quantifiable.
He goes on to say that it is hard to convince business owners that the point of social media is the conversation and relationships. If they are mainly in it for money “they will fail.”
Your ROI is what you got out of the conversation, not what you got out of their checkbook.
I have always been a believer in social media to help grow your business. You can use it as a delivery tool to send a message to many users in a short time span and build relationships. The problem with the business environment and social media is the mindset many business owners are under… the “i need my return now” mindset. “I’m investing $2000 a month in marketing.” I need to see return every month.
Social Media takes time to develop. Amy Nowacoski has a comment on Jason’s blog post has a great comparison for Social Media and ROI:
ROI on human interactions is always very tricky. I’ve worked in fundraising and development for years, and have always held that fundraising events cannot always be about the bottom line. It can’t be about just the dollar figure you amassed that night. Events are also about cultivation and engagement. I would spend time making sure everyone, not just the big donors, feel like VIPs because that guy who only bought a $20 ticket today, could be the guy who gives you $20K in 10 years.
There are always methods of combining social media marketing with traditional marketing. This will give you something of substance (ie direct mail) with something intangible (social media).
Social Media is growing in popularity and growing in validity as a powerful marketing tool. Start getting involved. Set some goals and achieve trusted relationships in your community!
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Hello Kyle,
Good topic, man! I throw this around in my head all the time. If only I knew the ROI for spending my time in Social Media. Then maybe I wouldn’t beat myself up for spending to much time???? I’m just like everyone else out their, I need a ROI for time spent. It’s just hard to stay a BELIEVER when you don’t know the pay off.
Then your post got me to think of the relationships I have formed using Social Media. I found three member of my Dream Team for “The Action List” webinar series, on Facebook. I’m also scheduled for to be interviewed for 2 podcast by friends who found me on facebook. Plus, I’m working out a JV for an upcoming seminar with yet another friend found on facebook.
I guess I’ll have to celebrate the ROI in relationships now and have faith that, “Money Follows Action.”
Have an Action Packed Day!
Larry Kevin
The Actionator!
ROI of any “new media” outlet is hard to define and measure. How do you know you have a successful blog? Are you measuring it by page views? Subscribers? The number of links of comments you get? The blogging program I run (www.indium.com/blogs) is the first of its kind in the industry. Our commenting action is very low, however we get reports from customers almost every day that the blogs have influenced a decision. So the return on the investment on the blogs could be a multimillion dollar contract which cannot be extrapolated from our low comment count. As we’ve shifted from a “packaged message” advertising and marketing culture to a “conversation” based model, we need to find a way to have our metrics keep up with this shift.
Thanks for the quotes, notes and points. Glad the discussion has blossomed beyond my blog to other places. Collectively, maybe we can come up with a new metric that make sense. Excellent comments and discussion here thus far.
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