Can social marketers catch the “ROI leprechaun”?
This post is by Ben Whitford, contributing editor for SmartBrief on Social Media.
For social marketers, return on investment can be a touchy subject; it’s the first question on the lips of many executives when talk turns to social media, and it’s usually tough to come up with a satisfying response. As Edelman Digital Senior Vice President Steve Rubel noted at TWTRCON, many marketers are secretly praying for the arrival of the “Twitter leprechaun,” the mythical critter that will be able to offer, in lieu of a pot of gold, a coherent explanation of how best to measure social-media success.
Sadly, the leprechaun didn’t put in an appearance at TWTRCON, but attendees got the next best thing: social-media chiefs from some of America’s biggest brands mulling the meaning of ROI for their companies. Here are four things that major-league social marketers say it’s best to avoid when thinking about social-media payback:
1. Don’t fall into the follower trap.
One thing everyone agreed on: ROI isn’t just a question of counting up your followers. It’s only “valid followers” — those who are genuinely reading your tweets and engaging with your brand — that really matter, said Marla Erwin, Whole Foods Market’s interactive-media director. That’s tough to measure directly, Erwin added, so it’s better to focus on retweets, which offer a true gauge of your campaign’s relevance and reception. “If people are retweeting your tweets, not only are they really engaged with what you’re saying, but they’re spreading the word. I can’t think of anything more valuable than that,” Erwin said.
2. Don’t obsess about your brand’s buzz.
The buzz surrounding your brand is a means to an end, not a goal in its own right, said LiveStrong.org CEO Doug Ulman. While LiveStrong has millions of social-media followers, Ulman said, its real power comes from the countless anonymous and unbranded bloggers and tweeters who amplify its message. As grass-roots supporters take over, LiveStrong tends to fade into the background — but its core message and its calls to action gain traction and social currency that matter far more than the campaign’s brand recognition.
3. Don’t forget social media’s hidden benefits.
Companies that develop effective social strategies are usually able to squelch online criticism before it erupts into a fully fledged social-media firestorm, said Joshua Karpf, digital communications chief at PepsiCo. It’s impossible to measure the value of preventing a hypothetical social-media PR disaster, Karpf noted, but it’s vital that everyone in your company understands that the best social strategies are defensive as well as offensive. “You need to be able to articulate within your organization the reputational risk you’d take by not doing this,” Karpf said.
4. Don’t expect instant returns.
Sometimes payback can be a long time coming — but when it does, you’ll be glad you made the investment. Newell Rubbermaid’s Graco brand spent years developing a social community for parents, said Newell e-business chief Bert DuMars, but reaped the rewards after a major product recall when community members helped amplify Graco’s reassurances and provided credible parent-to-parent information about the products concerned. “By day three, we didn’t have to reach out any more — the community was doing it for us,” he said. “The ROI was huge just on those three days.”
What does ROI mean to you? Can it ever truly be measured, and does it mean the same thing for different campaigns or different brands? And in the absence of quantifiable data, what’s the best way to communicate social media’s potential to C-suite skeptics?
Image credit, adventtr via iStock
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Tags: Ben Whitford, return on investment, social media, TWTRCON
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Posted by Tweets that mention Can social marketers catch the “ROI leprechaun”? | SmartBlog On Social Media -- Topsy.com on June 21st, 2010 at 6:38 am
[...] This post was mentioned on Twitter by Emily Molitor, Social Media Guy, Emily Molitor, youredgeonline, RT17 and others. RT17 said: Can social marketers catch the "ROI leprechaun"? – This post is by Ben Whitford, contributing editor for SmartBrief … http://ow.ly/17Pabt [...]
Posted by @alchemisttrain on June 22nd, 2010 at 5:49 am
In working for a media measurement vendor, we are still trying to find the best way to help our clients measure brand awareness, when most are just dipping their toes into developing a social media strategy and understanding the landscape. I think ROI can be measured but we need to use a different lens for assessing it; different brands will require a different set of metrics as it all depends on what exactly their strategy and objectives are and how their strategy and objectives are set up to impact business outcomes. At the end of the day, C-level execs want to see the results – whether it be increased traffic to a microsite or wave of positive sentiment in discussion around a brand. What needs to be understood is that the ROI is not always monetary based.
My recent post The Online Ad-Video Takeover by…Celebrities
Posted by @KirylShafarenka on June 23rd, 2010 at 8:26 am
I'd like to develop a little the statement of point #3. Often, marketers forget that social media is a two-way communication channel and they concentrate mostely on spreading values of their brands and forget to listen what people are saying about. By listening you may not only "squelch online criticism" but also get an extrimely valueble information on your products, services and even business processes faults. The monetary based ROI of this "hidden benifite" can be compared to the cost of market researches.
As for non-monetary ROI mentioned by @alchemisttrain, I agree with, but unfortunately it's not always easy to convince clients or C-level executives of its value.
Posted by @lexlacey on June 23rd, 2010 at 12:37 pm
Not sure I'm convinced at all by #2 here. It implies that all businesses only need to drive a message or two as their core business objective – fair for LiveStrong.org, but not for a consumer product selling company – especially a lesser known one. For them, creating a buzz around their brand is pretty much all they want or need to do to secure their next round of funding, drive customer to their website and so on. I'm not convinced this is something to be applied to even 20 per cent of businesses using Twitter.
Posted by Emily Trimble on June 23rd, 2010 at 1:03 pm
Great post. I think you've hit it right on the nose. Businesses are used to numbers, numbers, numbers, so that's what they look for when approaching Social Media. However, Social media is very different from other forms – like you said, it's not about the numbers, but the interactions. Social media is the perfect way to turn your customers into brand evangelists – they'll tell their friends, who'll tell their friends, etc. It's like WOM but much faster and on a wider scale.
While it does take time to build up that base (especially for start-ups or new businesses) it's worth it. But like @KirylShafarenka said, it's not easy to convince execs of this. But thats what blogs like this are for, right?
Posted by @smalltimeCEO on June 23rd, 2010 at 2:07 pm
What about the value of improved customer service by being able to easily address customers questions and concerns? What about the value gained when you discover an actionable insight that gives you a competitive advantage? What about the value of having a branded community where customers can continue to interact with other like minded fans deepening their connection to the brand? In my experience CEO's rarely object to reasonable costs that improve customer service, deepen customer loyalty and mine for competitive insights.
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Posted by How social media marketers can tackle the ROI chat | Sixty Sigma Leadership Development on June 23rd, 2010 at 9:20 am
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Posted by Sheldon on June 23rd, 2010 at 4:57 pm
This a great post with some really good information to take away.
The most important thing to note though is that every companies view of ROI is going to be different. Not everyone can always measure themselves around the same things that everyone else is. Every company is going to have to sit down and determine what results they want to see before venturing into social media. While one companies goal may be to see increased sales, another may just be interested in improving their reputation by establishing connections with their publics.
I know that everyone is waiting for this ROI leprechaun to appear, but I think it's more about the path down the rainbow of social media they take to get to the end that will show them their pot of gold.
Cheers,
Sheldon, community manager for Sysomos
Posted by Russ at AirCut on June 23rd, 2010 at 7:04 pm
I have the unique experience of launching a brand new product exclusively via social sites, so when my boss finally sat me down and said "where's my ROI?" he asked it as "how many sales can we attribute to your use of social media?" He scoffed when I said "all of them", but when I showed the analytics and where people were coming from, I traced back all except the ones he sold to his real life friends. Some bread crumb trails are longer, and some just increase your visibility, but it's all part of social.
Posted by @KirylShafarenka on June 23rd, 2010 at 7:31 pm
Sure, those who understand the impact and value of social media are ready to engage the path going down the "social media rainbow" even if they not sure to find a pot of gold but at least a pot. Nevertheless, the realty is different and when it's about cutting budgets CEO's starts with activities which efficience can't be mesured in money and guess what comes first…
I'm consulting different companies but the main and common hardle I face everytime is to convince the marketing staff to come out of their box and think big. From 360 degree approach they use only the half because the other half is still alien to them. The paradox is that the traditional marketing communications are much more expensive but are still dominant dispite its doubtful efficience and very often lacking in clients' feedback. The transformation will come the day when we will see in the square W of SWOT analysis the statement "low brand visibility on social media"
Would be glad to continue this conversation with everyone of you. Feel free to contact me. http://www.linkedin.com/in/shafarenka, shafarenka.posterous.com (don't be affraid of cyrillic, I'm writing in Russian and English).
In touch,
Posted by 90MilesNorth on June 23rd, 2010 at 11:13 pm
Finally, an honest look at social media ROI. It amounts to a slight shrug and raised brow – which is exactly what it should be. Too many are too desperate to solve the social media ROI riddle with theories and garbled prose that would probably make just as much sense as if they wrote it like a mad-lib. Be honest.
Client: "So, what type of ROI can we expect from social media?"
You: "No idea, but that doesn't mean it's not valuable… *shrug…..*wink"
Anything else is just daydreaming.
My recent post Five Sites To Feed Your Senses
Posted by Social Media: vier Tipps zum Thema Erfolgsmessung « Das Kulturmanagement Blog on June 30th, 2010 at 11:05 pm
[...] einen Kommentar » Ben Whitford hat in einem Beitrag für Smart Blog on Social Media die Frage nach der Messbarkeit von Social Media-Aktivitäten angesprochen. Von Kobolden ist darin [...]
Posted by IsItWorthIt on July 20th, 2010 at 7:57 pm
If returns cannot be measured then there are none. For a corporation with a business goal to achieve using social media, ROI has to be either sales, brand recognition or any metric that results in the increase in the stock price and improve shareholder value.
Posted by Marketers share tips for measuring social success « FCEdge Powerful Marketing Communications on August 9th, 2010 at 10:02 am
[...] Marketers share tips for measuring social success Senior marketers from some of America’s biggest brands, including Whole Foods Market and Pepsi, grappled with the thorny question of social ROI at TWTRCON last week, and gave advice on how to gauge the payback from your social strategy. Don’t obsess about easy metrics such as followers, or even about your brand’s profile, they advise. Instead, focus on actionable goals, and be prepared to wait a while before seeing results. SmartBrief/SmartBlog on Social Media [...]