Base One Beliefs #4: I would like to believe that the 'R' in ROI doesn't always have to be about money
January 18, 2010 4:25 PM
I was at a conference recently on Social Media Monitoring. During a panel session, someone asked a question about measuring the ROI for Social Media activities. The panel did their best to respond, but admitted that it was still difficult to establish a direct link between Social Media marketing and revenue generated. One by one (and there were five of them), they came out with different versions of the same story: 'we know that our activities generated revenue, but it wasn't really possible to track it. It was hugely successful, though.'By the fifth response, I was getting really frustrated. Not because of this failure to measure revenue, but because they were immediately associating the ROI for Social Media marketing WITH Revenue.
Different marketing activities generate different types of result. Some results are easier to equate to revenue than others. Can we measure the exact revenue generated by an above the line, branding campaign for instance? Social Media Marketing is all about generating conversations. These conversations can be about different subjects, and can take place on different platforms, even cross between platforms. They can also influence people to find out more by using other tools such as search, or plant a brand name in their mind meaning that at some future point they click on a banner. There's no way therefore that we can (or should try to) measure the revenue generated by a Social Media campaign.
Instead of thinking of 'R' for Revenue (yes, I know it's 'R' for Return, but I want to make the point), we should be thinking of 'R' for Results, and with Social Media these come in many forms:
- The number of conversations started
- The number of people involved in those conversations
- The mood of the conversations and reactions to them
- The number of Retweets
- The number of new followers recruited
- The number of new links generated
and..... the number of clicks generated, where and if we can measure them.
All of the above represent Results, and all of the above are a measure of success - just a different measure from those that we have become used to with 'traditional' on-line marketing. With Social Media, we are very much concerned with influencing potential buyers higher up the funnel, a no less important activity, but one step removed from revenue generation. Let's therefore judge performance in a realistic way, so that success can be clearly proved and celebrated, rather than attempting to present it using irrelevant and inconsistent metrics.
5 Comments
Mark W Schaefer
I have the most respect for your agency and its people, but must vigorously disagree with this premise. While it is true that revenue is difficult to measure for SM marketing (and other types of marketing as well), deflecting our ultimate responsibility to contribute to the bottom line is not acceptable.
I will never go into a client engagement and think they should be satisfied with "number of followers" as a way to "clearly prove success." Nor would I categorize "revenue" as an "irrelevant" metric.
Gifford Morley-Fletcher
Hi Mark - thanks for the comment. Maybe I need to reword this, as the message isn't quite getting through. I'm the first one to track performance in the form of revenue when possible, and have been running cost per lead campaigns for over 5 years.
I do however think that it is not always possible, and that other metrics including 'number of followers' are relevant, though admittedly not as a stand alone. I find that a combination of metrics are needed to show the success of a campaign, and these depend on what you genuinely believe you can prove based on the strategy and objectives defined.
And perhaps that's the point I missed. Success is defined before you start a campaign - you decide what you're going to measure (what you can measure) and set goals based on these metrics. If you are able to set a revenue goal, then you can obviously measure your ROI in that way. In the case of the 5 panel members, they were talking about 'successful' Social Media campaigns, but clearly hadn't measured revenue generated. It was therefore in my mind 'irrelevant' to attempt to qualify success in this way - they should have talked in terms of other metrics.
Kathi Kwiatkowski
I think your clarification helps. Revenue can be a part of your goals, but it doesn't have to be the only one, and you need to define those prior to your campaign. For example, with our firm, the goal with one of our twitter feeds is primarily service-based. So we listen to the conversations that are happening and try to proactively help individuals that might be having difficulty. Our goal (for this feed, at least) is customer satisfaction and success is measured by the upticks in the number of positive conversations about us.
Client looking after digital media
Gifford, a really interesting point to raise. I work for a multi-billion dollar organisation looking after our social media activity and our fans on facebook run into the hundred thousands. To date, revenue hasn't been a main concern for us. I agree Social media plays an important role in creating conversation, engaging your consumer with a brand experience beyond what they get from traditional media and inevitably will have a knock on effect on sales instore. However, I do think the beauty of running campaigns online is the availability of data and I'm now challenging myself to drive sales through social media because it's so easy to tell where traffic to our ecommerce platform comes from. Granted i may be a victimn of peer pressure, given other parts of the business drive lots of revenue, but I do feel that given the relationship we're creating with our consumers and the numbers that it would be a shame not to give them an opportunity to buy. Which moves me onto my next point, often consumers find it easier to speak to us via social media and are interested in product in our videos and where it's available to buy, so why not offer them that opportunity.
Sorry may have rambled on there, but ultimately, yes social media shouldn't always need to drive revenue, and when setting up your pages, it's important to give people a branded engaging experience, BUT once you've done that, I don't think it's a bad thing to drive commerce from it - the key is getting it right and there's where i challenge myself to help us as a business stand out from our competitors.
Andrej Volčanšek
hi!
i was hoping to get more here. more return on my investment of reading the whole article :).
geting rid of social media and roi (r=money) colleration is important, but sticking to metricks like clikcs, number of users, number of interaction anything nummeric is still in the field of "doing it because its profitable".
im affraid social media is far beyond what can be acchieved by a motive of monetisation.
ist superrevolution. the only real monetizers are platform providers. Facebook is one.
no one else makes much money out of it. and what people say online is actualy not what they think just before they buy. its an exhibition. everybody likes to look best on the big brother media.
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