ROI in Social Media – Where Does it Belong?
November 21, 2009 23 Comments
What’s the ROI of your cell phone? What’s the ROI of using a computer? What’s the ROI of breathing?
At one point, it was legitimate to think about the ROI of, say, a cell phone. But no more. It’s simply an assumed part of doing business, and living. You might think about the return on a specific model or plan, but you don’t wonder any more if you should use a cell phone or a smartphone. It’s about as much a question mark as getting dressed in the morning.
Networked communications – social media – is now a part of life. We’re past the stage of wondering if people are going to communicate and do business via these mechanisms. It’s just a matter of how we, as individual people or businesses, are to engage. Computers, internet, texting, cell phones, social platforms – they’re all networked communications, they’re ubiquitous, and they’re growing in influence.
People breathe. They drive. And they communicate in networks. Period.
That’s why it’s silly to ask, “What’s the ROI of Social Media?” Instead, we should ask, “what’s the potential ROI of this or that specific social media tactic or campaign?” Because you don’t measure the ROI of an assumed cost of doing business.
You don’t ask for the ROI of a medium. You determine if that medium/channel/approach is going to be a viable and potentially profitable place to be. Then you create a strategy. Then you look at the harder metrics of ROI over time on a tactical level, while also seeking to measure “softer” and, when possible, harder $$ returns on the use of that medium over the long haul.
Social Media/Networked Communications are a fact of life. And, there are some things we do because we know that, in the long run, they make business better. What’s the ROI of honesty and transparency? Don’t look for some short-term dollar figure – look at the long-term reputation value. What’s the ROI of getting closer to your customers, of improving communications, of putting a human face on your business, of being part of the marketplace dialogue, of creating strategic serendipity? What’s the ROI of creating opportunities through people-connections? When something is the right thing to do, you do it, knowing that in the long-term, it’s good for business.
That’s why we should instantly dismiss the question, “What’s the ROI of Social Media?” It’s exactly the wrong question. Should companies be involved in networked communications? In every way that makes sense, yes – because it’s smart, it’s right, it’s where the people are. Now – what specific strategies are best, and what measurable tactics should be employed? That’s when we move into ROI territory (and that’s when you start reading The Brand Builder on ROI…).
Then again, you can always take comfort in the return on doing nothing…
(Update: Because I kinda jumbled several lines of thought into this one blog post rant, I decided to create a little video to try to clarify some ideas. Thanks to all the commenters and twitter-folk – esp. Olivier Blanchard – who contributed their thoughts to the discussion. Feel free to keep it going! And while you’re at it, read this common-sense social-media-in-business perspective from @jasonfalls – great reality check! Then check out Shannon Paul’s recent musings on ROI. And, if you want to get beyond the narrow ROI/tactical issues into future business design, check out this forward-looking post by David Armano)
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