As always, there seems to be a lot of talk about defining the ROI of social media. And I think Jason Falls has one of the better posts I've seen on the subject, along with an excellent video interview with the always amazing KD Paine.
But as I saw what seemed like the millionth post about defining the ROI of social media today, I realized that most of this talk seems to be coming from marketing and social media bloggers and consultants. In fact, in taxing my limited memory, I cannot recall a single instance where I spoke with a potential client, or a business marketer/owner at a conference, and they asked me about defining or proving the ROI for social media.
Not one.
Instead, they wanted to learn how these social tools might WORK FOR THEM. They want to hear about the benefits of blogging, they want to understand if Facebook is really worth their time. They keep hearing about Twitter but think it all sounds like mindless chit-chat, and want to know if they are right.
IOW, they want to learn. They want us to teach them.
And I think that we are doing a bit of a dis-service to ourselves, and this space by continually harping on the ROI of social media. Why do we need to define this? Is it because the potential clients we talk to demand to know, or is it because we feel a need to vindicate our beliefs and theories about social media?
I think it's more about the latter, and I will admit that I am as bad about this as anyone. But I think in order to TRULY advance this space, and to advance the potential that companies have to better connect with and understand their customers via social media, we need to focus more on TEACHING, not on being 'proven right'.
So my call for today is to stop worrying about trying to 'prove' the worth of social media to those that 'don't get it', and let's start teaching to those that WANT to learn about social media.
Pic via Flickr user Hellsgeriatric
13 comments:
Mack,
I agree with you that teaching is paramount. And I'd take it a step further to say that actually EXECUTING on that teaching is even more critical (and more rare).
But in my experience, no, we're not the only ones asking the question. Yes, I have people I work with asking it. Why? For those responsible for stewarding these efforts, they need something to take to their meetings with their bosses that don't understand social media. They need more than just theory about why it's important and how it works. They need reassurance that the impact of the work they're doing will somehow be tangible. And they need it in terms that they understand.
It's unrealistic to assume that we can just throw aside the idea of attaching value to this because it's hard to do. That's just lazy. But nor do I think we should be focused on ROI at the EXPENSE of teaching or guiding, or executing.Those things must come FIRST. Then, after the work is done, you learn.
And I think we need to get away from a numbers mentality, and learn how to explain the worth of social media in terms that are not "ours". So far, we've done a shitty job of getting out of our own little bubble, assuming that everyone sees this world the way we do. We're building walls, not bridges. And that doesn't do any good.
There is no such thing as having all the answers for something before you do it. There is an element of risk in any business venture. The balance lies in finding the way to articulate the potential for something, back it up with hard, actionable steps to get there, and the courage to look back on what you've done and assess.
Mack,
Conferences are not a guage of what businesses want from their investments, as most of us attend to learn not to buy.
We marketers and consultants must be concerned about ROI and providing value and we better get both right. Our business growth and our client's business growth depend on delivering both ROI and Value. When anybody in our industry doesn't get that or understand how to measure both, all of us are hurt.
I can't remember the last time a client didn't expect my work to deliver ROI. Furthermore, if a business is spending money unconcerned about their return on their investment, I would expect that business not to be around very long. In fact, I just started a discussion within an online group of executives, and every one when asked said their number on goal in marketing and communications was to deliver ROI on every penny spent.
In answer to your last question: ROI and Value were defined decades ago. It is in our effort to redefine it to fit SM and SN tools that we go astray. Neither ROI or Value are going to be redefined by a blog post. It is when we apply those definitions improperly that we seem not to understand what businesses want and need. And that is what I am seeing from SM and SN bloggers--an effort to define ROI in a way that is inappropriate if we are communicating to business people.
ROI = gains – investment costs ÷ investment costs. Period. Those gains are measured in dollars. Value, on the other hand, measures the intangibles and something other than dollars.
SM and SN aren't special; they are just different and at the end of the day they are but new communications and marketing tools to be added to the mix.
I agree with your main thrust, Amber. Proving the value and worth of social media is vitally important. However, I think we are devoting too much bandwidth to figuring out the ROI of social media, and should be devoting more to teaching and educating clients on how they can benefit from using these tools.
And agree completely on explaining the value of SM in terms that our audience can understand. That is a BIG shortcoming that many of us have in this space, myself included.
"Conferences are not a guage of what businesses want from their investments, as most of us attend to learn not to buy."
Actually I misspoke there, I meant I had not spoken to a business owner/marketer at a conference OR one that had hired me or contacted me about being hired. They want to know how and why they should invest in social media initiatives, and how the worth of these efforts can be shown.
From my experiences, marketing and social media bloggers are far more worried about meticulously defining the ROI of social media. Your opinion and mileage may vary.
As for the 'definition' of the ROI of social media, and why it's important...not going to rehash that again with you, as we did this the other day on Twitter and took a topic that I'm pretty sure we agreed on in principle,and still found a way to argue about it for 30 mins. So I'm not going to do it again here.
You're right Mack, a lot of such dead horse beating has been going on here in India as well. Businesses need to be educated with Social Media and ways in which it can be harnessed.
The term ROI has been over abused by digital marketers these days. Mostly they do so ti win bids but if they better show their clients the real meaning of Social/Digital Media then they are sure to win a client for long term.
I think you and Katie are on the same wavelength today (but coming from different angles):
http://katiechatfield.wordpress.com/2008/12/01/the-forest-and-the-trees/
It depends on the client. For those organisations where marketing reports through the office of the CIO, questions around ROI will be asked. For those, where marketing is a strategic (boardroom seat) capability, the question will be one of "fit".
Thanks for sharing the article....
Mack I agree to a degree. Clients want to know what the return on the engagement will be. "If I do this, what can I expect? and how long will it take"? Then they might be able to measure the value versus the spend versus the effort.
The best way to teach clients the value of social media is to share case studies with them, and those have only recently started to appear.
I've given two presentations on social media recently, and when I've used actual numbers to illustrate how an application can spread via Facebook or how advertising spend can be reduced dramatically while revenues increase, potential clients have gasped.
Sounds to me like you are contradicting yourself. First you say, quite rightly, all this talk of ROI re: social media is marketers trying to vindicate themselves, then in the next breath, you say mrktrs should teach the rest of us how to use it.
For me, Twitter is a waste of time. People follow me, but don't talk. AND the people that follow me are not my customers, they are mostly in the same business I am in or they are bloggers or marketers.
Twitter is highly overrated in my opinion. @awolk said there are many communities on T, but didn't say how to find them.
From what I can see, I will get far more mileage out of the 'social network' on Ning than anything I will get from twitter.
"I cannot recall a single instance where I spoke with a potential client, or a business marketer/owner at a conference, and they asked me about defining or proving the ROI for social media."
Wow, mine demand this all of the time. They all want a measurable component. Maybe because they are mostly all corporate? Anyway, I don't obsess on measurement because of ego, I do it for survival with my clients. Oh, and also because I am a uber geek (disclaimer).
"Sounds to me like you are contradicting yourself. First you say, quite rightly, all this talk of ROI re: social media is marketers trying to vindicate themselves, then in the next breath, you say mrktrs should teach the rest of us how to use it."
Janine I think that we can spend too much time sometimes on trying to 'prove that social media works', and not enough time TEACHING how it works.
BTW if you aren't getting the results you want from Twitter, you should definitely scale back or stop spending time there. On the flipside, I have tried using Ning, and I just don't get much from it. I have friends that evangelize Facebook to no end, but I see it mostly as a waste of my time.
We all need to experiment with these tools and find out what works best for each of us.
BTW this time last year, I had all but given up on Twitter and had stoppped using it. Now I leave well over 100 tweets a day. All about experimentation.
Kami I can definitely see it being moreso with corporate clients. Most (but I do have some corporate clients) of my clients are smaller businesses, and they are usually already active to a degree with social media, so they 'get' the worth, they just need help with the strategy and execution.
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