Cup of Joe: Social Media ROI? Think Again Genius!




Repeat after me:

Social media marketing is not advertising.
Social media marketing is not advertising.
Social media marketing is not advertising.

I can already hear some of you getting warmed up for the comments, so let me say this. Yes, in social media you can buy advertising. But social media in itself is not advertising. If we can all agree on that, then why are some of us still talking about social media ROI???

You can’t measure relationships. You can’t put on paper the depth and complexity of the human experience with a brand. Sure you can track web traffic, click through rates, and even your follower/following ratio. But none of that explains real influence.

So then why do CEOs, CMOs, and even brand managers insist on this pointless discussion? Because, too many of us have been enchanted by the tools. Too many of us have been caught up in the hype and glory of amazing technology to recognize that social media marketing is essentially the same old ball game using different tools.

Think about it this way, when was the last time you attended a networking event or trade show and had your boss ask you, “so what was your ROI?”. I am willing to bet never, because those types of events aren’t there to act as advertising channels they are there many times to create relationships.

If you utilize offline social events as advertising channels, two things happen. 1) You don’t make any friends. 2) You don’t create any customers. This happens because instead of coming across as the cool girl or guy that everyone wants to do business with, you come across as the annoying jerk passing out postcard adverts. So why is it that some of us think that social media is any different?

Calculating ROI for advertising is easy because it is based on definite variables that can be measured. How do you measure the emotion from a positive exchange with a favorite brand on Twitter? How do you calculate the feelings of community in some forums? You can’t, and you aren’t supposed to.

If your company or client requires social media ROI, then maybe social media isn’t right for you. Or maybe you just need to learn more about being social and come back to the media later.

  • http://www.lobsterwebdesign.co.uk Russell Davies

    I agree that social media isn’t advertising but like any networking there is a direct correlation between the efforts you put in and the results you get.

    Its very easy to track the roi on all forms of networking, it just requires a bit of thought to work out where a customer came from.

    As a business your goal is to make money and every effort is towards that goal. The use of social media might not be directly to advertise your products our services, it might be to improve customer experience or just improve your personal brand but ultimately we do this to sell more stuff otherwise what is the point?

  • http://globallytested.wordpress.com/ Terry Logan

    For me ROI is to satisfy the financial side of our business. As marketers we should try to determine the ROI on every thing we do. This provides klout for the Marketing Department and to show we are not just “the creative guys down the hall.” We add value to the company.

    Yet, as marketers our job is to strengthen the brand and help create sales opportunities. This takes relationships, which as you say Joe does not calculate for ROIs.

    We should have a parallel path – one path to create a positive ROI and the second path to build relationships. Both need to accomplished and neither should be ignored.

    Great thought provoking post Joe!

  • http://twitter.com/tednyberg Ted Munerh

    When you attend some type of networking event, don’t you ever think afterwards that it was *worth* it?

    See how I emphasized *worth*? Because that’s a return (something valuable) that you got from attending (investing). Hence: ROI.

    So, whether it’s a new or old ball game: it’s definitely relevant to talk about ROI – in social media as well. You get return (something you want to get) by investing (spending time, socializing).

    Just my two cents. ;)

  • http://tampabaysocialmedia.com Derek Lee

    It seems to me that the term ROI is thrown around far too easily when it comes to social media. To calculate true ROI is not as simple a task as people so casually make it out to be even with traditional marketing.

    For example, back when newspaper advertising was more popular, spending money on an ad in the paper without a coupon or something to physically track whether the ad was even seen and subsequently acted upon, would make it difficult to calculate ROI. Yet, the newspaper was held in high regard. Perhaps the return on investment in that type of advertising was brand recognition rather than dollars and cents.

    My point is that ROI can mean different things in different situations. I couldn’t agree more with Joe’s assessment that the price/payback for building relationships can’t be calculated by the typical definition of ROI that some try to apply.

    Social Media Marketing is not advertising
    Social Media Marketing is not advertising
    Social Media Marketing is not advertising

    I think I’ve got it. Nicely written post by the way! Looking forward to more!

  • http://askaaronlee.com Aaron Lee

    No matter what companies will want to know how they are doing. They will still ask for the ROI because they want to know how well their campaign or how much they are paying someone is working.

  • http://globallytested.wordpress.com/ Terry Logan

    May I ask what your definition of advertising is? Are not some ads single purpose to build a brand rather than a promotion? Is not the purpose of Social Media to build relationships which in turn builds your brand?

    As Aaron stated, companies will demand to know how their investment is going. The Marketing Departments I have managed were all required to show where the marketing budget was going, and how the dollars performed. At the bare minimum we should be able to show how much traffic we are creating with advertising and with social media.

    Building relationships is nothing new to businesses and has been a require for success for many many years. As marketers we have to generate sales opportunities AND build relationships to succeed. In my humble opinion this is not an “either or” situation.

    Great discussion – btw.

  • http://www.arcanasphere.com MrAndrewJ

    As of late, I have been enjoying your posts more and more. Each one is getting better, or at least more challenging to me in a positive way.

    I’m not looking for a direct ROI on social marketing. I AM probably using social as a crutch for the non-SEO things I should be doing in my personal work. (I do what The Man says at the day job.) Your opening salvo gave me a LOT to chew on.

    Thank you for this one.

  • http://www.engagingothers.com Cheryl Bledsoe

    While I get your point, Sean, I don’t see ROI discussions among marketers nearly as often as I hear them among the Reluctant, Opposed or Incapable…..and if people are unwilling to see the obvious value in social media, they may be swayed by ROI stories or case studies.

    Granted, you will never hear people say that if you invest x hours, you will get y return; however, as society continues to illustrate key reasons to engage, all of that is ultimately ROI.

  • http://www.almamiri.wordpress.com Alma Miri

    I totally agree. Social media and advertising work hand in hand, but they are not the same. Each has a different purpose that works towards improving the overall brand.
    Social media is used to create relationships with customers, bond with them, and further understand their needs and wants. You turn them from strangers to friends and eventually loyal fans through social media. These things, like you said, cannot be measured and therefore no discussion of social media ROI should exist.

    However, according to an article on Forbes.com titled: “Can You Measure The ROI Of Your Social Media Marketing?” Hoffman and Fodor believe that “you can, but it requires a new set of measurements that begins with tracking the customers’ investments–not your own”

  • http://www.socialmarketingdynamics.com/ Sydney @ Social Dynamics

    I agree, social media should definitely not be used as a plain advertising platform, as it will almost always turn off people from your brand. It’s essential to provide genuine connections and conversations to find a place in your followers hearts.

  • cripchick

    love this. so helpful.

  • Bobby Jones

    I agree. Thank you for this touching article. I think a lot of people out there needed to hear it. It’s a swift kick in the ass which is apparently what some people require to come to their senses.

    Personally I consider social media to be more of a PR issue than a marketing issue.

  • http://www.seoservicesuk.biz Marie Lewis

    Social media marketing is not advertising because advertising covers a lot of areas, and in my opinion, it includes the social media. Advertising uses communication to promote your product and service, and isn’t this what we basically do with social media marketing?

    A stable way of promotion is to invest in good SEO and good SEO services include a good presence in the social media. A lot of people pay good money for professional and guaranteed SEO to gain more customers. As with any valuable investment, it is only proper that these business owners who employ professional search engine optimizers make sure that there is a considerable ROI. I don’t see why we should make a fuss out of this.

  • http://www.bhomes.com/ Moosa Hemani

    One of the very claver and straight forward point and i am completely in favor of this! i mean really have you ever thought or asked about calculating the amount of relationship…. no because you can’t simply do that.

    Social Media is not Advertising… i partially agree with it IMO its more like a different sort of marketing and advertising when you do not sale or pass your business cards but by this you show your companies expertise and pass your expert and experience level to the fans and followings and leaving them a question… Why not doing business with some really expert people in town i know?

  • Troy Davis

    I think you are confusing strategy with tactics. ROI measurement is part of a strategy, social media marketing is just one tactic used to execute a strategy.

    You know, this reminds me of what people said about Web marketing back in the early to mid 90s. They said you can’t measure ROI, that it’s too different of a medium to apply the same metrics and theories of prior mediums, and that you’ll just make enemies if you approach Web marketing with the intent of making money. But then we figured out different methods and metrics, and now Web marketing ROI is regularly calculated to compare the effectiveness of different strategies.

    My bet is that people will stop complaining about social media marketing ROI requests once they have figured out usable methods and metrics. But to tell businesses that there is no hope of measurement or even measurable return on that expenditure simply means fewer businesses will try the tactic at all.

  • Frank Gilbert

    Investing in Social Media or any other tool or service demands an understanding of the Return on Investment. Not sure what business today can afford to commit resources to an effort without a quantitative understanding of the value, both to justify initial costs as well as to confirm expectations and continued funding. Social Media is not all about Marketing and revenue generation, it also supports brand recognition and loyalty, drives cost savings through alternative communication channels and more. While I am willing to take risks, fund innovative ideas and take advantage of seemingly obvious opportunities I must manage those risks with an idea of the return on investment that is well received by corporate money managers and ultimately our customers and shareholders.

  • http://www.top-mindmarketing.com Janet Peischel

    OMG. Somebody besides me has the temerity to say this. It’s true. Social media is sexy and fun, but there are always those who have to quantify everything. What I tell my clients is that they need to start using these apps, because they’re not going away–and who knows how they will evolve who what will be the next sexy app? Like every other kind of marketing effort, there is a sales cyle, and social media is no exception. It takes a while to gather momentum. ROI? Maybe….