COMMENTS
Or, the put the question another way:
"What was the ROI of you putting your pants on this morning?"
Exactly. Yet, you did it.
Unless you are a blogger in your pajamas, living in your parents' basement... (God, I love Palin jokes... there write themselves!)
I really disagree with you guys on this one. You absolutely can measure social media ROI in real, tangible numbers with a bit of effort. Saying you can't measure it is a cop-out....it's code for "I don't want to do the work to measure it."
Not only can you measure success in the social media world in a variety of ways, if you are not you are doing less for your company or your clients by not doing so. There seems to be no end to "experts" of social media these days. Thankfully it is a big, complex world of business and businesses out there with opportunity abounding. Those who measure and share that success with their clients and prospects will be those standing next year calling themselves experts.
I, too, am overwhelmed with all the information and disinformation. It is no surprise that corporations are reluctant to get on board when there really are just opinions and no true "best practices". Maybe "best practices" should be the next meeting to be held here.
agree 100% with Karlyn - anyone who suggests to a CFO or CEO that they
can't measure it can kiss their hopes of getting it funded goodbye - especially in this economy
Can we get these slides that Brian spoke on? These would be great to show at meetings I am involved with and how I can track my ROI.
Thanks
In a way we have become so spoiled by the fact that we CAN measure anything and everything -- what with PPC ads and custom landing landing pages for email campaigns and direct mail campaigns combined with a good CRM system that has marketing functionality built in. Gone are the days of just guessing about what is actually driving revenue. But is that hurting us by preventing us from trying something new that might be a bit more challenging to measure, like social network marketing? I agree that with enough work you can do it, and if you do have it nailed down you should patent it , but in many ways it is a high tech PR tool. Good PR is essential, there is no denying that, but it has always been hard to quantify with statistics other than web traffic numbers or counting up your articles and press references...
In the context of measuring ROI...
If the sum of your marketing efforts that drives lead generation, new business and returning business. Sure, you can segment out a particular campaign that might have had more success than another, but you'll probably drive yourself nuts trying to measure hard ROI dollars linked to most things you do (like social media).
For example: Say you blog and participate in a community where your prospects/customers live. You do this for 1 year. During that time, you exhibit at 6 tradeshows, and send 6 mass emails. When 10 new clients sign up after that one year, how you link that biz back to investment (ROI) on your social media strategy?
We really don't look at marketing programs like a piece of equipment in which you are calculating net present values and ROI before you invest.
Sorry CFOs and controllers.
Now with that, like anything. Metrics (followers, comments, visitors) and KPIs (i.e., conversions to visitors or visitors to conversions to opptys to revenue if you can close your loop) should be established.
Maybe you can't measure ROI on an individual blog post or video easily, but you know what efforts went into creating the unique content and promoting it online. Time = money.
Also if you don't have a dollar amount set on levels of buzz that you create then why are you doing it? Are you engaged in social media because it is the thing to do? Of course you aren't you are doing it because you want to bring business to your company or your brand. Instead of basing your ROI on individual posts or video I would personally concentrate on a specific campaign or monthly basis because social media is a very all or nothing business. You can measure it in increased brand awareness (backlinks to your site created through a campaign or votes on social media) or actual leads that tie to visits created by the social campaign. With the toolset today and tracking available with the proper setup you can somewhat tell if sales increased because of visits from the social media. Of course there is always the tried and true method of simply asking leads or sales how they heard about you.
I echo the comments that Social Media can be measured and should be measured. I work with a 3rd party data group to monitor the volume of comments that are made about a client or a topic in the social sphere. You can track the traffic back from the major social sites to your website and also track conversion.
The software also helps you identify which sites that mention you have the most influence, so you can continue to target your social outreach efforts. In most cases, you can test out this program for free.
"Sorry CFOs and controllers"
That quote goes a long way toward explaining why the average tenure of CMOs is so short.
I normally don't disagree with people on my own blog, but clearly the headline is thought provoking, rather than being a conclusion.
One can and we do measure the ROI of social media participation at HubSpot. What we don't do is bother to take the time to compute an exact ROI. We know about how much time and effort it takes, and we know what the benefits are in terms of leads and customers. So, maybe a full ROi is a waste fo time, but measurement is certainly important.
@victoria I just posted Brian's slides on
Slideshare.
What is the ROI of me taking time out to read this post, Twittering @dogwalkblog, @gerardmclean in short burst all day, posting up a blog entry and commenting on this post? Dunno. Maybe nothing, maybe someone will read this post and think to click onto my web site link and buy services.. or, maybe I'm just feeding the comment pool of folks who are commenting to be able to shout down anything else that was written.
Does anyone ever read comments or do they use comments to shout out THEIR stuff? Seems like the latter is used more than not and that hurts an ROI argument more than anything with the C-suite.
The C-suite reads blogs, they see countless posts with no comments, they see tweets of a mindless nature, but mostly they see content that is self-interested and they see people wanting free stuff without actually becoming customers. They see "conversion" numbers in traffic, page views, CTR, etc, but the revenue numbers don't follow (doing a sponsored-ad analysis right now where I basically have to tell the client they are only paying for clicks that they would have gotten anyway organically, yet they paid a lot of money to sponsor. Did they no spend enough money per click? That is what the advertiser is saying.)
So, will I be able to track back to a client who reads my comments on a blog post, even on HubSpot.com (no offense) and thinks my observations are so insightful that they need to hire me? Probably not. I'd have better luck playing the lottery.
And that, I think, is where ROI in social media is in the minds of the C-suite; You talk about conversion rates, they hear "you are playing the lottery with our money."
So, back to my original question; "What was the ROI of you putting your pants on this morning?" Nothing? Yet, you still did it. Why?
@RickBurnes thanks :) Have a good weekend
I thought Brian's presentation where he showed Hubspot's funnel and how the different marketing channels contributed to the leads was the most useful. Unless you can show similar metrics on how many people came in through organic search, through Youtube or Facebook or LinkedIn or the other social media sites, we can talk about social media until we turn blue, but the corporations are not going to pay attention.
The corporations are getting the why they need to do it, they need help on how they have to do it and what they have to measure. Where you can hang a $ figure is by showing the scalability of social media in reducing the cost of lead acquisition compared to traditional methods.
Gopal's recent comment hits it on the head.
Exhibiting at a traditional trade event might cost a SMB anywhere from $4000 to $50,000. Let's just call it $10,000 for the sake of the discussion (over 4-5 days including travel, but not including reps salaries). While at this show you generate 100 leads or $100/lead and expose yourself to maybe 1000 people.
Now one could easily implement an annual social media strategy on a budget of $5,000 and touch 10,000s of people and drive hundreds of visitors to your web site to complete forms ... leading to business.
As a SMB, there's no way I could afford to exhibit at 20 shows, run ads, etc for the amount of inbound traffic and leads generated from... being a part of the groundswell.
So yes, you have to determine where to spend your money to maximize your results.
Hence, you have to somehow tie your social media efforts back to an indicator (forms filled out, proposals generated, sales) without driving yourself crazy trying to do it.
Good comment Gopal!
Ari,
No disagreements here with your comments.
My reference to $ is with reference to how to convince the management to change the marketing mix so that it is more on social media than traditional marketing methods such as email marketing etc. This is going to take time and convincing. If it was not, you would have seen the whole business world jump on this social media bandwagon - majority of them are not, because they don't understand how to start. Hence, it is important that we who do understand social media, start making it simpler for them to understand by providing metrics they will tend to understand. I am not saying detailed ROI like traditional software companies did, but more along the lines of where did the leads come from, how many customer conversations you have had etc.
After all, they are the decision makers and our customers, hence we better pay attention to how to convince them as opposed to saying they don't get it.
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First of all, many thanks for sharing this information with us. What a fantastic topic. The question that I have and and area that I struggle with is how to help clients understand the ROI of internet videos vs. traditional marketing. In essence, we are asking clients to shift their marketing dollars and while it is clear that the opportunity is great, the way in which we measure is quite different. If someone has a suggestion on this topic, you will be my hero!
Melissa,
I thought Matt Cutler covered this very well. Did you watch his segment?