• http://www.mikewilton.com/ Mike Wilton

    Great post Courtney! This is something I have struggled with when it comes to social media for a couple of years now. In the beginning I stuck by the mantra, “Asking the ROI of social media is like asking the ROI of the telephone.” To me social media has always been a communication channel first, and a marketing channel second. I still firmly believe in this. But at the end of the day big businesses and CEO’s still think of social media solely as a marketing channel and want to know where the money is, which is probably why so many people are still obsessing over the true ROI of social media.

  • RavenCourtney

    You’re absolutely spot-on, Mike. I think so many of us are struggling with it because it’s an attempt to fit a round peg into a square hole. We have to decide what we want social media to do for us before we can measure its worth.

  • http://twitter.com/pinsondigital Pinson Digital

    Gary Vaynerchuk has a great quote when asked about the ROI of social media: “What’s the ROI of your mother?” Social media is about building relationships and some of those relationships will never result in direct sales. However, what they may lead to is word of mouth referrals for you.

  • RavenCourtney

    And no one would be happier than social media practitioners if we could definitively measure all of those relationships and referrals. It’s just not possible to fit everything neatly into the sales funnel – but that doesn’t make social media any less effective.

  • http://www.brickmarketing.com/ Nick Stamoulis

    “That’s the value of social media – the potential to create a
    new relationship where there wasn’t one before. And then the ability to
    repeat that process as many times as you have friends and fans.”

    Great point! I always tell my clients to stop looking for one-to-one relationships in social media. Every Tweet does not equal a new follower, a new follower does not equal a new customer–but the potential is there.

  • http://www.boom-online.co.uk/ Amy Fowler

    Agreed Mike; most of us who work in marketing understand that social media is about communication and relationships, and the ability to market yourselves through social media follows on from this naturally.

    Thinking of it as a marketing channel – and focusing on the money it will make you – is where many businesspeeps go wrong.

    We’ve had clients into the office to talk about the benefits of social media, and at the start of the meeting they were saying ‘so how will this make us money’, and at the end, they were saying exactly the same thing.

    It didn’t seem to matter how many times or ways we explained it; they couldn’t get past thinking about how much money it would make them. And until they can get past that, they’ll never ‘get it’.

  • http://twitter.com/inSparq inSparq

    Many of our clients do see ROI via social media. That’s what our technology is all about. For us as a brand, though, social media is definitely measured in soft metrics, most of them mentioned by you, Courtney. As Ms. Fowler said, social media is about communication and relationships, and a long tail ROI as opposed to the immediate.

  • RavenCourtney

    Sounds like you’re doing a great job of client education, Nick! And that can be a pretty big job.

  • RavenCourtney

    Exactly. Even when we calculate social media ROI as thoroughly as we can and as fully as we presently know it, it still doesn’t give us the full story.

  • ndawkins

    I agree that social media ROI can’t be measured PERFECTLY. Can
    anything? But I don’t agree that the business value of social media is
    an elusive goal that may never be reached. We have too many clients who
    are doing it right now. Yes, it takes some work (and multiple sources
    of data). Yes, depending on your goals for social media, attempting ROI
    measurement may be more trouble than its worth. Yes, the assist can’t
    be fully accounted for. All that being true, it is possible to measure
    business value. And when a senior exec asks for an assessment of
    business value, “what’s the value of your telephone?” is not a response
    that is likely to win a bigger budget for the social media program.

    I highly recommend Nichole Kelly’s new book on this topic, How To
    Measure Social Media: A Step by Step Guide to Developing and Assessing
    Social Media ROI.

  • RavenCourtney

    Yes, Nichole is a great resource and her book describes the current industry standard for measuring social media. My point is even when you do all of that, your results will still be a very conservative estimate of social media’s value for your business (taking into account unknowns like dark social, uncredited assists, etc.). So why not take soft metrics into account as well? I certainly believe we should still strive to measure our social media efforts – I’m just not sure “ROI” is the right way to view that measurement. I appreciate your smart comment!

  • http://profiles.google.com/markhiemstra Mark John Hiemstra

    One word: attribution. That is all.