Social Media and RO__why?

A thought-provoking post by Debbie Weil on the ROI of Social Media had the effect of…well, provoking some thought.

tape-measure.jpgI’ve always had a hate-like relationship with ROI and its many first and second cousins (ROE, ROC, ROwhatever). The concept is sound at a certain level – if we invest (x), what will be our Return on that Investment? This works well in the tangible, definable, prior-track-record arena of business.

The problem is that it is a narrow, accounting-centric, and transaction-centric set of lenses. And not all decisions (both business and personal) are best viewed through the green RO__ eyeshades. Some things cannot be given proper value based on scheduled dollar returns. And some things, like Social Media, are emerging and evolving – no track record. We’re still making up the rules for crying out loud!

When it comes to Social Media and other aspects of business and life where measured returns are “squishier,” trying to do ROI calculations is a matter of undergoing artificial contortions (this has been true in the training industry, where I’ve been involved for many years). So you have to exercise judgment, faith, vision, and long-term thinking, answering this question primarily: is this likely to have a positive impact?

At the risk of oversimplifying the already obvious, I think a judgment about the value of Social Media and other such avenues can be made based on weighing these three factors, some of which don’t fit nicely into the simplistic RO__ model:

    Anticipated Positive Benefit (APB) – both long-term and short-term!
    Anticipated Potential Risk (APR)
    Anticipated Resource Allocation (ARA)

roi-borg.jpgIf the potential benefits outweigh the foreseeable risks, and there are sufficient time/people resources to move ahead – then why require make-believe ROI calculations? Just plow ahead and make things happen.

Just spewing here. What are your thoughts? I’m sure many of you are already running into the Business Borg (“ROI Resistance is futile…”) – how do you work around it?

(Image credit-tape measure)

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2 Responses to Social Media and RO__why?

  1. Measuring ROI in social media environments IS squishy, but if the client really (really) needs tracking and results-oriented data, then it’s out there to be had.

    Now, of course, it’s much more than whipping up a WordPress blog or posting a video on YouTube. Tracking, analytics, RSS feeds, etc. etc. etc. along with sales (if applicable) reports should show some sign of ROI – albeit less precise.

    Is it perfect. No. But the investment has to match the return. In other words, bring your checkbook… As tracking mechanisms for social media advance, the ability to measure ROI will become more trustworthy. Until then, we depend on your APB, APR and ARA solutions…

    Great post, Steve. I look forward to reading more.

    Keep Cooking!
    Andrew

  2. Andrew, I think you’re on to something important…as is true in the training world, so with some aspects of marketing…sometimes it’s more expensive to do the ROI analysis than it is to deliver the training!

    When there are many variables that touch on impact, it becomes very hard to get hard ROI numbers. But you’re right…as software and platforms and processes become more mature, typically analytics follow.

    But here’s one element that still perplexes – social media is all about building relationships, and therefore focuses on long-term interaction and a lot of “indirect” benefits. Many older approaches focus on the more measurable transactional model (we ran this ad…we saw x increase in sales in Milwaukee during a 2 month period). If I throw a dart and hit a bulls-eye, that’s an easy measure. But if I send the cue ball on its way and it hits the 4 ball, which hits the 12 ball, which caroms of the rail and bumps the 6 ball…that’s more of how social media works. Tough to make clear-cut measures with all the variables!

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