Archive for the ‘ROE’ Category

Maddie Grant has a must read post on Social Media Today that lists 6 Must Read Posts about the ROI of Social Media.  They are:

NTEN – The Three Dimensions of Social Media ROI

The BrandBuilder Blog – Defining Social Media ROI once and for all, and understanding the action-reactive-return narrative

Adam Cohen (A Thousand Cuts) – The Basics of Social Media ROI

Social Computing Journal – Measuring Social Media ROI: Does size matter?

BrandSavant – What’s Wrong With Social Media Marketing Strategy

Jacob Morgan – The Importance of a Social Media ROI Diagnostic

Demonstrating the ROI of Social Media is perhaps the single biggest obstacle to widespread adoption of SM initiatives by businesses and other organizations, and these 6 articles are a great starting point for anyone trying to wrap their head around the issue.  Maddie’s post has already racked up 1150 views, but the comments are a little thin (so far, I’m the only contributor to the conversation).  If you have any suggestions, please click here and share them with the class.  Thanks, Maddie!



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Olivier Blanchard (@thebrandbuilder) explains Social Media ROI Measurement in one of the funniest AND most informative slide shows I’ve ever seen.

[UPDATE: Check out Olivier’s presentation w/ these slides at #LikeMinds here.]


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Tom Webster has recently published a couple of must-read blog entries concerning the need for better social media metrics.  The first of these pieces, What’s Wrong With Social Media Marketing Strategy, takes so-called social media “strategists” (of which I am admittedly one) to task on two counts: first, for their failure to think strategically in terms of social media performance; and second, for their tendency to confine social media’s import to the marketing silo.   I posted a comment on Tom’s blog, but I think it bears repeating here:

“Great post, Tom. As a communication researcher who backdoored his way into social media and interactive marketing, I’m continually amazed by social media advocates who disavow the need to develop robust engagement metrics or flippantly dismiss the mountains of quantifiable data demonstrating the impact of traditional communication channels. For an industry (online advertising) built on the ephemeral value of the click, engagement metrics should be a selling point for social media, rather than an impediment to adoption. When we created an interactive campaign for Scion on Dame Dash’s now-defunct urban social network, BlockSavvy.com, me measured a variety of interactions: through traffic to the Scion site, time spent engaging interactive assets, participation in on-site contests, viral pass-alongs, and other indexes of user engagement. That was in 2006. With the advent of new social tracking technology, it’s even easier to measure the performance of social media and interactive marketing initiatives. When Avenue A/Razorfish approached us to create similar interactive campaigns for Nike, our ability to measure engagement was at least as attractive as the interactive assets themselves. Brands and advertisers may have a lot of issues with social media campaigns, but impact measurement needn’t be one of them.

I also want to echo your point about social media being more than a marketing tool. For big and small business alike, social media initiatives can improve customer service, enhance market intelligence, streamline product development, expand HR capabilities, and increase organizational IQ to improve performance across the enterprise. If we confine social media efforts to the marketing silo, we’re seriously underselling the value of the technology. Factoring these non-marketing impacts into our discussion of ROI should be an imperative.”

Tom’s second post on the importance of measuring the impact of social media, Raising The Bar On Social Media Metrics, again takes social media advocates to task for their refusal to take seriously the question of performance measurement, this time pointing out that decrying the limitations of traditional media metrics is a misguided diversionary tactic.  Not only are there significant and extensive attempts to measure the impact of traditional marketing channels, but the same analytic approach can and should be brought to bear on behalf of social media campaigns.  In the interest of not rewriting my thoughts, here’s what I posted in the comment thread:

“Another excellent post, Tom. For all the hype surrounding social media, far too little attention is spent on the consideration of engagement metrics. As with any marketing and communication research, the real trick is figuring out what to look for and what questions to ask. In terms of social media, I think the attempt to link the message directly to the sale is a misguided and ill-informed approach. You’re right, of course, that all kinds of traditional marketing tools are being measured, but how many of these measurements demonstrate such a direct linkage? Figuring out where and how social media impacts the continuum seems to be the real issue. The folks at Bazaarvoice have done a great job of measuring the impact of social product reviews on purchasing behavior, and their work goes a long way toward establishing a quantifiable ROI for a particular type of social media engagement. Social media advocates needn’t prove that traditional marketing and communication channels are equally opaque or inferior; instead, they should focus their energy on discovering the relationships between the two not-so-discordant approaches. The analytical tools applied to traditional channels are an instructive starting point for understanding the impact of social media engagement. If we spent less time trying to pitch this technology in either/or terms and more time explaining its relative value, our job would be a whole lot easier.”

To be sure, Tom isn’t the first person to point out the need for engagement metrics. Steve Goldner wrote a great piece on Measuring The Value Of Social Media on his blog back in June.  Unfortunately, I found this piece after reading and commenting on Tom’s, otherwise I’d have given Steve credit for the following sentiment, echoed in my comment:

“Be careful what you promise … marketing is not sales.  It does not result in sales, but rather 1) increases the number of potential clients (qualified leads) and 2) increases the probability of sales closure, while reducing sales cycle time.  Quantifying the value of marketing efforts must be specified in these functional areas, not in sales numbers.  Yes, one can say that sales increased after a marketing campaign, but you can not attribute it 100% to the marketing campaign.”

Steve’s article cites two additional contributions to the conversation, Dave Evans’ article Making Quantitative Sense of the Social Web, and Dragon Search’s Social Networking Media ROI Calculator.  While I share his reservation about both approaches to measurement, I also think they are a step in the right direction as far as intentions are concerned.  The sooner we turn our collective attention to the issue of engagement metrics, the easier it will be to “sell” our corporate clients on the importance of strategic social media initiatives.


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Sarah Evans, PR maven and director of communications at Elgin Community College in Elgin, Illinois, posted an excellent article on The Dos and Don’ts of Sharing for businesses on Social Media.  A few highlights that deserve echoing:

  • Be transparent and authentic.  Be human.

“Social media for business is about return on engagement. Connect with people, build opportunities through dialogue which would  not have otherwise occurred, then connect them with your business.

Think in terms of ‘bad driver just cut me off’ instead of ‘just got served papers for a lawsuit.’ The first example connects people and encourages dialogue. Who hasn’t been cut off by a bad driver? The second example has the potential to make people uncomfortable or turn them ‘off’ to your brand.”

  • Leaving a Legacy

“Your social media personality becomes part of your brand’s legacy. Don’t brand your personality for the day, the month or the year. This is serious stuff. What you post stays around for a pretty long time and the information (good and bad) isn’t too hard to find. Your social media posts offer vast archives of information about you.

This means, what you share, post or tweet today should reinforce your brand tomorrow. Think about each message you share via social media as an email which has gone public to your entire organization and all of your stakeholders. Now, imagine if they are reading this email and RESPONDING to it. That’s part of the power of your social media brand.”

  • Don’t be a social schizo.

“Multiple personality disorders do not work well in social media. If you confuse, you lose. If you are a business expert one day, a media maven the next and live news feed after that, people will ultimately stop connecting.

A very simple approach is to make a short list of what you WILL talk about via social media. Stick with it. The pay off? When someone thinks about an expert in interior design, they will think of you because you will have BRANDED yourself as one. (DISCLAIMER: This is not an opportunity to ‘play a doctor on T.V.’ You should actually be an expert in the areas you claim to be.)”

  • Social climbing is not the best approach.

“Social climbers beware. As you build your social media personality, don’t only connect with people who have a lot of “followers,” “friends,” “connections,” etc. It makes sense to engage the “big dogs” of social media, but it’s even better to connect with other quality audiences. Spending too much time looking for the big fish may take away from an entire school passing you by. Go grassroots and begin to build your personality one social media platform at a time.”

  • It’s not a one-stop shop.

“There is no one-size fits all personality for your brand. In fact, think you know your brand? Explore social media and see how people really experience what it is you’re selling. You may need to adjust or reflect on your brand.

What is your brand offline? Social media isn’t an opportunity to reinvent a new brand, but to widen your brand’s reach. It’s all about the experience, right? People should get the same (or similar) experience with you online that they get offline.”

  • Return on Engagement (ROE).

“It’s all about ROE – return on engagement. Is your social media personality working? You’ll know when opportunities arise that never would have been possible otherwise. A few ways to ‘quantify’ engagement:

• Track incoming traffic from links

• Number of people subscribed to RSS feeds

• Number of people in social media groups, fan pages, etc

• Trackbacks or linkbacks to posts

• Conversation tracking tools like Twitter Search

• Comments on blog posts

• Increased sales and general inquiries”


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