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February 07, 2010

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Talmadge Boyd

This is an interesting twist, though I still think it's a legitimate question that people ask before they add another stack of things to do to their schedule. Perhaps then the response is 'given a comparable strategy we achieved some such result'. In all you probably can put some dollar amount to the social strategy, but you may not be able to link them directly.

Paul Gladen

Michelle - very interesting analysis (as always). I think what I take away from your discussion is that the better question related to social media is: "Does social media IMPROVE my marketing ROI" (whether for an individual marketing initiative - or across all my marketing initiatives).

Clearly, done right social media can (amongst other things) increase awareness, stimulate new conversations and relationships and increase readership/viewership of firm "content". If awareness, relationships and engagement are parts of the firms existing marketing ROI equation they should be able to evaluate the uplift (or otherwise) from social media.

Of course that assumes the firm knows the ROI of its current marketing activities.....

Michelle Golden

Thank you for your comments.

Talmadge, it's always a legit Q to ask if something is worth the effort. Especially if it's brand new. The issue here is to clarify that you cannot fairly assess ROI of social media in general, but you can of a particular use or application of social media. Most people jump in without considering their strategy. Many then sour to SM when they simply haven't done their proper pre-work and therefore have unrealistic or misaligned expectations.

Paul, thank you! And BINGO! You said that very, very well. Baseline benchmarking and monitoring overall communications and engagement are great ways to track the impacts of using social media tools. And, like a lot of things we do in marketing, it's not always possible to attribute an upswing in activity or engagement to a specific source, so you have to look for "reasonable coincidences."

There's a FABULOUS video that illustrates this "The Basics of Social Media ROI" http://www.slideshare.net/thebrandbuilder/olivier-blanchard-basics-of-social-media-roi

Will Reichard

Great post! I had some similar thoughts recently:

http://crosscutcommunications.com/will/2010/02/what-is-the-roi-of-your-telephone/

I've been trying to find out if anyone ever looked at the telephone as an "investment."

Russell Lawson

Michelle -

Appreciate your clarity about this common misunderstanding. When I was in "J" school (back it the Stone Age) we were taught a formula in PR with the acronym "RACE", for Research, Action (planning, message crafting), Communication, Evaluation. Too often, users of social media start with the C step and anticipate the E step will be obvious. Not so. The E will only be clear if you have done the research to define the right channels and targets and then intentionally made the plan for using the tool with specific goals and objectives tied to the features of the tool and the outcomes you require.

Rebecca Ryan

Michelle - Great post!

Social Media (SM) seems like the poster child for the "digital divide" between generations in many firms (supplanting paperless.)

The decision-makers (usually older folks in the firm) may text their kids, but don't see the value for marketing or sales. On the other end of the generational spectrum, the firm's new hires would rather give up coffee than their Facebook account.

Asking "What's the ROI on SM?" seems like a way for decision makers to end a conversation they're uncomfortable having. (And it works!)

Like all new technologies, the biggest rewards are going to the early adopters. PKF Texas, for example, has been using Social Media since at least 2006 (with the From Greg's Head blog), and I recently learned at Winning Is Everything about a firm in Buffalo that rented a digital billboard on a major roadway, and tweeted messages that were updated every few seconds. (The cost was less than a 1/4 page ad in their local Biz Journal.)

When I hear a partner ask, "What's the ROI on social media?" I take it as an indication of the decade the firm is living in, or the age of their clients. For example:
- If a firm favors newsprint, their clients must be 60'ish without email access.
- If a firm favors direct mail, their clients are probably still working, and wearing out their fax machines and printers.
- If a firm favors email newsletters, they're living in the 90s.
- If all their staff are on LinkedIn and participating in a real time, online conversation...that's a firm of the future, and one many young professionals want to work with.

In this competitive economic environment, firms should stop asking "What's the ROI?" and should start asking, "How can we differentiate our firm, and get it out of the pile of the rest of our competitors?"

Early adoption of any appropriate technology can get you there.

Michelle Golden

Will, if anyone answers you with info on the telephone thing, please do let me know! I'd be very interested, too.

Russell, brilliantly put! I'd love to reference your comment in my upcoming book on social media (in the ROI section), if you'll permit? With full attribution, of course!

Rebecca, you are right on. The conversation ending aspect of the ROI question is disheartening. But very real. :(

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