I went to a lunch 'n learn last week sponsored by Molly Crawley at Med Ad Agency. Molly had asked me to think about the topic of social media return on investment (ROI). My first thought was there is not a one-size-fits-all model for considering social media ROI, and it would be unwise to oversimplify. When I hear clients balk at participating in social media platforms until or unless they can apply a highly accurate ROI model, I feel that they are missing an important consideration.
15 years ago or so some clients questioned whether they needed a website, or could justify the ROI. But the internet has become such a part of the operational and communications infrastructure of any company that the consideration is different. For most companies, if you don’t have a website, you don’t exist.
Social media is becoming an integral part of that infrastructure.
Infrastucture ROI models are different from calculating the return on a marketing campaign. Asking the ROI on an customer event you might plan at your headquarters is one thing. But you need a different model that covers having a headquarters in the first place, where it is located, what color it is painted, what the phone system is, who is in the mail room. Have you calculated the ROI on your phone system lately?
It’s well and good to come up with plausable, testable and refinable models such as ROI. Develop a model, a hypothesis, and go from there. But you need to make sure that you are looking at all the different levels of necessity and return that can be covered by that model. Developing an infrastructure ROI model for social media can be instructive, but should not be the deciding factor for participation.
First of all, assume that social presence is required now to be included in the online space. Minimally this includes profile information that can be indexed, found, referenced and shared. Search engines are increasingly factoring this presence into their search results. For many consumers, if you aren’t in the search results you don’t exist. Beyond this, as I pointed out in my post on the Zero Moment of Truth, validation of your presence in the social space may also make or break the attraction of your customers. A survey I did for a client seven years ago showed that the existence of an independent blog community for their products and company increased the trust in that company and its own communications. Accelerate to today, and that community:trust ratio is even more critical.
Of course, you can still measure ROI on social media marketing campaigns, but this is a much different consideration from the initial choice to participate. As lunch 'n learn guest speaker Colin Cook of Thimble River Analytics pointed out, old-school linear conversion funnels have become much more convoluted with the feedback loops of social media. You can still use simple measurements such as click-throughs to desired conversion events with links that are carried through the social media. But you also want to develop models of how these links and the messages that carry them are uniquely spread and validated through networks of influence and the platforms that enable them.
How do you do that? First, you develop your model of how this influence might plausibly work, within and across online and social platforms. Once you have a model, you can use the platform-specific measurement systems, such as Facebook Insights; or general purpose measurement systems, such as Google Analytics, Webtrends or Adobe's Omniture; or you can look at the data requirements of your specific social proliferation model, and find many vendors that offer specialized measurement systems.
So embrace the infrastructure of social media as a given, model your general presence, model your social campaigns, and find the right tools to test and learn from your models.
Download the free Social Media Workbook from AP42