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Social Media ROI – Measuring Results vs. Activity

Posted on Monday, April 2nd, 2012 by Print This Post Print This Post

Categories - Featured, Social Media

Last month, the “What’s so [Bleeping] Hard About Social ROI” SXSW 2012 Interactive brand and marketing session assembled a panel of bloggers, brand-builders and marketers to provide answers to the nagging questions surrounding how to show social media has a Return on Investment.  Panelists included: Craig Daitch, Social Media Manager at Ford Motor Company; Eric Swayne, Dir. Social Analytics & Insights at M/A/R/C Research; Liz Strauss from Inside-Out Thinking; Matt Ridings, Co-Founder and CEO of SideraWorks; and Petri Darby, Dir. of Marketing at Make-A-Wish Foundation of America.

This panel illustrated through their experiences that social media’s value is not accountable as a money-in-vs.-money-out model, but rather as a “squishy metrics” model like user engagement, building trust, growing reach, and gaining insights around user behavior.  Social media can have value that might not have an easy-to-quantify solution.  Measuring results like growth year over year is more important than measuring activity such as “likes”.

Petri Darby from Make-A-Wish provided an example of social media’s value that cannot be directly tracked to a donation amount.  MAW went from producing stories in-house to a testimonial model where people tell their own stories online. The foundation has received thousands of stories through their website, which would have taken much more time and money to harvest internally.  User-generated stories not only free up resources, but can ultimately inspire and drive readers to make a donation.

Craig Daitch from Ford Motors discussed how his company uses social media to gain valuable insights from market research conducted via social media platforms (e.g. Facebook, Twitter), build brand affinity through fan photos and stories, and provide a customer service platform for responding to an average of 2K user questions per week.  Daitch said Ford is unable to successfully track all sales through social media since it can sometimes take customers up to 10 years to purchase a vehicle.

Panelists proved there is value in a brand building trust via social media channels which may not be immediately measureable through ROI but, if done properly, will drive long term growth.  Business goals should be established at the outset and results measured.  For instance, is the higher goal to grow business, build trust, increase user engagement, etc.?

Perhaps most importantly for companies to consider, what’s the ROI of not engaging in a social media marketing strategy? What happens if there is no brand presence in social media? What if there is no customer service provided or corporate presence via these means? Customer service alone should represent value and a dollar amount to a business.

So is there an answer to the social media ROI question that will make an organization’s CFO happy?  The panel’s advice: Establish an ROI baseline for current marketing efforts and correlate that baseline to social media, which can then be used to measure its success.

While most attendees were disappointed with the panel’s vague answers to the ROI question, the key takeaway is not only should brands be actively present in social media, they should be measuring ROI based on the value that social channels can provide.


About Ami Grant

Ami joined The Search Agency in 2004 and has over 9 years of online marketing experience both on the publisher and agency-side. She is responsible for SEM campaign management, strategy, and maximizing ROI. Before joining TSA, Ami was a Senior Content Solutions Editor at Yahoo! Search Marketing, where she spent over 2 years optimizing accounts through keyword generation, creative development, and landing page recommendations. Ami is originally from Austin, TX and holds a Bachelor of Arts in English at the University of Texas at Austin. She is also a certified Google AdWords Professional and SEMPO–LA Chapter Member.

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4 Responses to “Social Media ROI – Measuring Results vs. Activity”

  1. Josh says:

    The biggest problem with social media ROI is that it’s the WRONG question. Unless what you’re doing has a direct financial return you simply can’t measure ROI, you’re missing part of the equation.
    Instead you have to measure impact metrics. Mentions, likes, growth, links, earned media, etc. and then you can map those against profits and see if there is a correlation (but you can’t prove causation).

    Now, if you do a social media campaign where the end goal is “sell more blue widgets” you can easily ascertain the ROI of that by filling out the equation (Gain-Cost)/Cost. And there you have it. The ROI of a social media campaign. It’s really quite simple.

    Asking “What’s the ROI of social media” is a totally useless question and makes absolutely no sense. Social media is a collection of online tools used for different purposes and ROI isn’t an appropriate metric for all of those purposes. Just like ROI isn’t the appropriate metric for a host of other marketing, PR, customer service, internal communication, or HR activities.

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