Thursday, April 23, 2009

Social Media and ROI. Is there ROI?

I just read this article on social media and ROI. The writer tends to think if you're doing your social networking the "right" way, there is no ROI because it isn't "media" and you aren't "buying" anything or anybody.

I will comment later about my thoughts, but really want to hear your thoughts.


Mamie said...

Pâté, foie gras, mush: it's all liver. Point is, we have a a wide variety of mediums in which to communicate and it's important to understand why/how/when to apply each one. It depends on the brand strategy and most of all on understanding the person we want to reach.

Black House Creative said...

So Mamie, what do you think about his takeaway on ROI?

mbuchanan said...

The author states in his summation: Do social marketing because pound for pound, it's more valuable than traditional advertising.

There are costs associated with social marketing, including the time it takes to create, implement, and monitor the effort. Even if it's just starting a blog, it takes some amount of investment. So any social amplification would be the return on that investment.

Mamie said...

There is investment in the cost of monitoring/participating in social media, but the ROI is not measurable. The only real ROI, strictly speaking, is when you can directly measure response, as in direct marketing. BUT, decades of brand marketing demonstrates that there a cumulative ROI when brands invest in consistent communications/actions over time. I call it Fractal Branding. It's the power of repeating a small, simple brand message over and over until a brand becomes the icon of that quality. Volvo stands for safety, for example, while BMW stands for performance. Google stands for (my words here) "Find It". And while much of their marketing ROI would not be measurable, they have built something more valuable: Brand Equity that affects the value of the entire company as viewed by analysts and investors.

Black House Creative said...

I could not agree more with all comments here. I think while Dr. Fou (the article's writer) started to make some good points and fodder for us all, he didn't close the loop on his thought. You do have investment in time. And actually I think Buick just bought off a lot of Twitter folks by paying them to put up Buick wallpaper on their pages, so you can put money into it. But it's hard to measure ROI since it is more about awareness and buzz. Which you're never really sure has bought you any direct purchases or solid leads.
What I have found is that clients have a hard time reconciling, especially these days, awareness building/equity building. They want to see numbers. And you just can't put a number on building your brand. Over time you will see numbers, but if you keep trying to pin it to an ad or a particular "thing," you will be treating marketing in a very flippant, disrespectful way. Marketing can do amazing things for a brand and it can have components that very readily can relate to ROI, but the best marketing communications are a compilation of many things that in turn create success that may not be easily attributable to any one thing. And social media is one of those things.

Black House Creative said...
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