by Joe on December 9, 2008
There have been some wise thoughts about Social Media ROI that resonate with me from my finance background that are a nice corollary to Kristen’s arguments: Social Networking is not about ROI.
Peter Kim, a former Forrester Social Media analyst said:
“Calculating ROI from social media efforts is no different.If ROI doesn’t apply to social media marketing, then social media should not be used for marketing.”
Jason responded by saying he thinks that the social media ROI issue is:
“a failure of data analysis, not a failure of marketing.”
Return on investment is a measure that should be used sparingly but tested often, relationships are not calculated in ROI, but money generated from those relationships and the cost of maintaining them can be. Just like sales teams monitor ROI by choosing Webex instead of flying to a meeting in Denver.
If you have ever been a consultant, you’ve had to log your hours to client numbers, and account numbers and project numbers. Social media is no different.
I think the capabilities to measure social media efforts online will far surpass the ability for corporations to measure ROI on old media marketing: magazines, newspapers, television.
Sure, ROI shouldn’t be the driving motivator in interacting with real humans, but to sustain a business a measure like ROI sure does enable business to thrive. Just don’t let such a great measure of value go the way of now generic terms like “Web 2.0.”