The ROI of Social Media - some of it anyway
This post was first published at GLG Councils´ analyst website 1.11.2010 a bit shorter. This is the first post in the series of SoMeROI articles coming up. Yes, we can! We can see ROI on the efforts put in Social Media, whether it is marketing, communications/PR, sales, recruitment or plain and simple effectiveness of operations.
Companies´ usage of social media grows in such speed, depths and widths that it is hard to comprehend. Everyone talks about it while at the same time every other comment is questioning either simply the effectiveness or the direct ROI of all efforts. Can the ROI be measured, how, why and when is something expected to happen?
There is hardly a single - simple - answer to this, but consider this the next time you think about the value of social media efforts, whatever they may be.
- Facebook has well over 500 million users globally;
- Linkedin has about 80 million users who are easily identified as top class potential clients, candidates, partners, or competitors no matter what you do;
- The use of search engines in finding answers to just about anything is here, EVERYONE uses search engines, probably even your grandmother;
- We´re living in the age of recommendations - people make more and more decisions based on web searches and on recommendations and reviews found online, especially at social networks;
- Social Media has built unique reach to enormous number of potential clients and with such insight to purchasing practises that we've never seen before.
Can you pass a pool of 500+ million potential clients/candidates/partners/suppliers/...? I´m sure your competitors can´t...
In the history of mankind there´s never been such a vast amount of identifiable ´targets´ in clear sight out there. Whether you´re marketing, try finding new employees, searching information about potential clients or more information on the existing ones, evaluate new features for your products/services, launch new products, advertise your upcoming event or whatever, you should consider using social media as one of the main tools of trade. They´re already there, are you?
The ROI of social media comes in mysterious ways. It may be ´Likes´, Fans, ReTweets , visits to your website, sales leads, direct contacts, direct sales, affiliate sales, or in some cases it may be a disasterous rumour that didn´t catch wind and what not. How valuable and measurable are the effects of an accident that didn´t happen or a vicious rumour that no one listened to?
Some ROI can be measured easily. If you get a sales lead, in most industries it´s easily calculable how many leads you need to bring in the money. Or if you reach a certain number of visits to your web page, blog or sales portal, you know how many visits normally bring in the goods. But if you create positive attitude or brand value to your company and/or products, how do you measure it? It may show as ´Likes´, Fans, or ReTweets, but can you measure it? At the end of the fiscal year you see increase in revenue, but can you honestly say where it came from and why? That is exactly the problem with social media ROI - we know it exists and in some cases it shows well, but in many cases it brings you visibility, publicity or brand value that is not directly shown in any figures. (Yes, you can make polls and stuff to find out brand value... That´s not the point!)
On the other hand, many social media efforts are free (I know, not all of it, and if you want, you can pay huge sums for it), but you still need to commit and spend time and resources on it. But what if it brought you value that you can´t find anywhere else? Think about crowdsourcing or microjobs-concept or achieving reputation of being at the forefront of technological advancements. Crowdsourcing is nothing new really, but social media has made it a true business model and a tool that no company should forget. Microjobs again is a totally new concept that social media has more or less given birth to. And the brand value and goodwill in technological early-adoptiveness is something that can´t be achieved in so many places. How do measure ROI on something that hasn´t really existed before like this?
And finally we have the effectiveness. If your company could save tens or hundreds of thousands in travel costs and saved time, would you take it? What if you could gain hundreds of man days in savings...? What if you could avoid overlapping work between projects and/or departments or business units? If there was a way to get the whole company working on new features and evaluating new practises, how much would it benefit your company? In cold cash? Is it calculable? There are so many tools of trade for this - Huddle, Yammer, WeTellNetworks, etc. Choose your weapons, it´s soon a war out there! War for Your business! How would you really WANT to measure social media ROI anyway? It´s pretty much your own choice...
So just to make it as clear as possible, I´ll say it again. Social Media efforts have ROI, it´s not just always plain ol´cash, but other values. Some can be measured and some can´t. Sorry!