Social Media Is Bunk Without the R in ROI: Even IF It Is Magic & Free

UPDATE 5-20-14: Yesterday I was a survey claiming social media was 11% better at tracking ROI in 2013 than it was the year before. What? Who are they talking about? If you need help understanding and then tracking ROI, you should call me.

[this post was written in response to this post, Aren’t you tired of the social media selling machine.]

the social media roi chart

Sure, let’s be social in the real world. And let’s gauge the measure of a halo in friendliness. But…

Your musings, “What if social media for business became more about visiting, relating, knowing, and courting than selling? What if we learned to gauge at least some ROI by the residual halo effect of our authentic online social interactions?” do seem lovely and idealistic, but some what unrealistic, given the driving factors that most of us have to contend with in our jobs. If the social activity doesn’t result in an action taken that benefits the company, then what is the measurable effect?

Halos are nice for Pepsi and Nike perhaps. And maybe even some non-profits and causes can get a bit of mileage from the halo-effect. But in business, the halo is the first fictitious element that must be exercised from the discussion. Like “activity” before it. Another haloish concept is “branding.” The last one that provides some mystery to what we do is “share of voice.”

We hear about a lot of these tangible and measurable aspects of social media. BUT they don’t mean jack when you are reporting to the CEO and CFO in your quarterly performance review. If you’ve never been in a corporate performance review, you might not appreciate the pressure to show “results” as opposed to “activity.” But after you’ve had a program shut down or a position eliminated due to lack of measurable results, you’re not really living in the business world.

Let’s talk about BRAND for a minute. It’s like the buzz word of social media. From about 5 years ago! And branding these days, is sort of a joke in C-level marketing discussions. Brand is not a number you can take to the bank. And, for the most part, only very large companies can afford to be branding using social media. Think of Ford, wanting you to think of their cars when you are in the market for your next car, whenever that is. The Ford social marketing team doesn’t have to show any ROI for those branding ads, because they are not tied to an immediate call to action.

But most of us are working in the world of work where every dollar spent is a dollar that needs to be accounted for on the other side of the equation. The one where the CFO is asking you about the 10k you spent on Facebook last month. If you try talking about LIKES and SHARES and “activity” you’re quickly going to be shown the door. Or at least be asked to redo your math to show the contribution of social media to the bottom line of the company.

Without R the ROI of social media is bunk. Without actionable and measurable effects, the halo is worthless.

I understand the fatigue of social selling. And I do agree that businesses must do a better job of relating rather than just selling. And those objectives are very different depending on the size of the customer you are trying to engage. But please, don’t advocated that we lose our sight on the goals and survivability of the business it self.

I think social media is suffering from the blow back of hype when EVERYONE was selling social media as the driver for e-commerce. AND now that social media is “easy and free” there is a lot of bad social media out there. Perhaps that’s mostly what our fatigue is about. The selling of Twitter followers at $29 per 1,000 followers is the worst of it. But the a good portion of the social media businesses or consultants are still selling on “share of voice” and brand.

The honest value of social media has to be calculated more carefully with a small business or a startup. The local dentist wants to know that my “social media package” is going to result in more new clients and more booked appointments. Not much else matters.

And it is my belief that social media has to get real and get in line with the other digital marketing channels and deliver on the promises of R in the ROI requirements that drive businesses.

Social media might be MAGIC and FREE, but the execution, measurement, and roi analysis are very real and very un-magical. I love the halo, but I’m not sure that I can afford to pay for it.

<socialchallenge> Please, if you don’t agree with me, add your perspective in the comments. </socialchallenge>

Reference: Aren’t you tired of the social media selling machine – McGirr Enterprises 5-6-13

@jmacofearth (also seen on Google+: jmacofearth)

This Post Has 2 Comments

  1. I agree that there must be an R in order to determine ROI but my issue is how do you measure that R? Can you trace back that a post from Facebook or a Tweet caused the revenue? Is there a direct relation with the business card being handed to somebody at a networking event and then it gets passed along to a few different hands before that last person shows up at the Dentist’s office and when asked about how they found said dentist responds with: I was referred but I can’t remember who?

    Outside of putting ‘coupon’ codes on everything it might be difficult to measure perfectly how a specific form of marketing affected the revenue.

    1. You are right, Jason. Coding every link only gets you so far. Especially if the sales cycle is longer than a few weeks. (hours really) It’s harder still to measure “influence.” We know it’s there, but it’s hard to put an R around it. Let’s keep trying to, though.

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