Social Media, Marketers and ROI

If you're a marketer, here's a very informative article about what your colleagues in the business are thinking about and are interested in:  Research Shows Blogging a Top Focus for Marketers.  If you're a consultant, this article offers a good look at the state-of-mind among marketers.

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Here's my comment on the Social Media Strategy community on Google+: 

A superb, very informative article, Jeremy. The key figures look very close, especially for the first two questions. So their differences may not be significant. The author highlighted blogging, for example, but another author could've just as persuasively highlighted Google+. For me, this article is less about the state-of-marketing, than state-of-mind among marketers. In this regard, it's clear that blogging, Google+, Facebook and LinkedIn are top-of-mind for these marketers. Anyway, there's a lot to speak to in this article. Thanks for posting!

Here are screenshots from the article, which I speak to:

A process for measuring ROI

When asked to rate their agreement with the following statement, “I am able to measure the return on investment for my social media activities,” only 26% of marketers agreed! What’s interesting about this survey is that social media is clearly a core strategy for businesses, yet measuring it remains a mystery.

It is a bad sign that marketers engage in such a core strategy as social media, but have little or no clue how to measure it.  So let's think this through.  First, they ought to review what they were trying to accomplish with social media, to begin with.  What were the issues or challenges they faced, and what benefits or outcomes they expected?  Optimally, it's best to 'begin with the end in mind,' then create the 'roadmap' for reaching that end.

But I suspect that marketers are already in mid-stream with their social media efforts and have begun to invest time, resources and cash into it.  This means having a retrospective on earlier conversations, decisions and activities.  Regardless of how they do it, they must be crystal clear on what they were trying to accomplish from the get-go.  Second, then, in the vein of critical, honest review, how well do their social media and other efforts work vis-a-vis their aim?  This review is the platform for determining and measuring ROI.  

Keep in mind that ROI means Return on Investment.  Too many managers, consultants and marketers focus on only one factor of the equation, that is, outcomes, benefits or results.  Rather, it is all of these good things calculated against the costs of actually making these good things happen.  When costs are in the service of getting something more in return, we call them the euphemism investment.

Moreover, some of us neglect to calculate the wide range of real costs, except for dollars spent.  How much time and resources did it take to make these good things happen?  What about opportunity loss associated with these efforts?  Salespeople in a training program not only incur registration and material fees, but also time away from the field means means zero sales.  What is the estimated lost business for the training session?      

So if a marketer were to ask me, How do you measure ROI of social media?  My first response is to ask, again, What are your objectives and goals for this platform?  Then, how well are your efforts going against these aims?  If the aim is to increase sales by 10%, for example, then how much is social media activity moving the needle toward this figure?  What were the total, real costs of your social media initiative?   

Measuring ROI of social media is still a complicated, challenging process, but by clarifying your aim and calculating results against costs properly, you make this process significantly clearer and more doable.  Above all, it ought not be a mystery.

Thank you for reading, and let me know what you think!

Ron Villejo, PhD