I don’t want to write yet another Social Media ROI metrics post but I feel it is one of the over debated and misunderstood concept among many so called social media experts & practitioners because many people really don’t know what to measure, how to measure? so they think social media ROI cannot be measured.
The most common question businesses & clients ask when you pitch social media as a new medium for their Marketing, PR & Communications, Brand Building & Awareness, Customer Support & Service Channel and Products/Services Feedback Management Channel is “What is the ROI? and Measurement Metrics?” in the proposed social media strategy or “how do you prove the value of this new medium investment to our management team?“.
Unfortunately there has been lot of discussion & debate among many thought leaders in social media space ranging from questions like, do we really need to measure the social engagement of brands with their consumers? because value of human relationships cannot be measured!, how can you put ROI value on a conversations? to new definitions for ROI like “Risk of Ignorance”, “Return of Influence”, “Return on Conversations” etc, I feel none of these things can convince business decision makers when you pitch social media as a supplementary and potential channel for their business unless as a social media practitioner you really understand the “measurement models & real metrics” instead of thinking in terms of number of conversations, comments, retweets, followers & eyeballs attraction in online/offline channels. The problem with most of these arguments is they focus on impact” and “potential value” of your social media efforts instead of measuring actual results.
Jason Falls of Social Media Explorer put’s confusion around Social Media ROI is because of :
The problem with trying to determine ROI for social media is you are trying to put numeric quantities around human interactions and conversations, which are not quantifiable.
But I agree with @TheBrandBuilder perspective :
Marketing professionals need to understand this: If the investment (the “I”) is $$$, then the return also has to be $$$. It can’t be eyeballs or impressions or clickthroughs. You have to tie your results to a $ amount. Anything short of that, and you’re not proving your value to your boss or client.
What about if your prospect client asks you “How can you manage something if it cannot be measured?” - My experience is that “social media ROI is not difficult to measure if you understand the business objective of your clients and follow a measurement model that allows you to track financial & non-financial metrics of your social media engagement efforts“.
What are the metrics one need to measure?
I have been following Olivier Blanchard of TheBrandBuilder blog and Don Bartholomew of MetricsMan blog - whom I personally acknowledge as thought leaders in social media measurements space and also for making me understand the importance of measurement models and specific metrics of social media ROI along with Yong Fook and K D Paine for sharing their expertise in measurements space. I strongly believe “Social Media ROI isn’t about potential of your current engagement efforts but it’s about actual performance“.
I like the following measurement model which can help you understand the metrics to focus on while working on social media engagement for your brand or customers instead of avoiding the ROI questions from your prospects & clients because sooner than later you need to prove the ROI.
Also one need to understand that ROI is related to the actual performance/outcome from your engagement not just eyeballs like I said earlier - you need to differential your metrics into based on financial and non-financial attributes.
The “Action, Reaction” in above diagram are actually related to “Exposure, Engagement & Influence”. When you map the above two models then you can determine the specific metrics that you need to measure to calculate the ROI for your engagement efforts.
What is your take on measurement models & metrics for social media ROI?.
