Social Media Week: The ROI Question – What Do We Actually Want from Social Media?

by Katie Creaser on February 3, 2010

FacebookLinkedInTwitterGoogle+PinterestRedditShare/Save

How are you celebrating  Social Media Week? We are bringing you fresh social media week-themed posts all week from our partner, Johnson King, a European technology PR agency headquartered in London.

Today’s installment is a collaboration between Johnson King’s Tom Kirkham, account manager, and Jonathan Mathias, senior account executive. Keep an eye out for more updates from our friends in the UK later this week!


Social Media Week: the ROI question – what do we actually want from social media?
Tom Kirkham, account manager, and Jonathan Mathias, senior account executive at Johnson King

Greetings from Social Media Week (http://socialmediaweek.org/), where yesterday evening we attended an absorbing debate at ‘Chinwag Live: Show me the money – where is the ROI in social media? (http://smw-london.sched.org/event/96a5ab8a98ad88 081ca46d7e08b46ff3) . Speaking for Johnson King, we definitely saw an immediate return on investment – attendance didn’t cost us a thing and there were drinks and pizza provided for all. However it became clear as the debate unfolded that the business world is still struggling to quantify ROI (see this recent IAB study for starters: http://www.nma.co. uk/news/brands-need-roi-evidence-to-invest-more-in-social-media-says-iab/3009466.article), and indeed, several of the panelists made a convincing case for redefining ROI altogether when assessing social media’s value.

The debate took a while to heat up; after the first fifteen minutes all they’d determined was that ‘listening is key’ – not exactly groundbreaking stuff. However, then the idea was raised that instead of analysing the people talking about your brand (and thus already engaged with you), you need to listen to the people who aren’t talking about you, and figure out a way to interact with them. The key is to tap into the conversations taking place within a wider context, thus creating a new audience for your business.

Another key point was that social media activity has different aims depending on whether it is being used to engage directly with consumers as a sales tool. In a B2C context, ROI from a social media campaign will likely manifest itself in sales figures which can be broken down and evaluated. However, in a B2B environment social media tactics are much more useful in terms of brand building and reputation or crisis management. Mark Rogers at Market Sentinel argued that social media monitoring is actually more valuable than measurement, as it can be used to assess campaigns in real-time to decide whether to keep going or pull the plug, whereas all measurement can do is provide a retrospective proof point – i.e. “It worked,” or, “It didn’t work”.

Robin Grant of We Are Social described social media investment as similar to life insurance: you’re making a payment that doesn’t have a return unless something goes wrong. The best examples of successful business-customer interaction using social media occur when traditional channels like telephone or email have become overburdened or ignored. Yet even then appraising a social media strategy may involve dealing with something very abstract – sentiment and perception – rather than ‘results’ in a more tangible sense. While many businesses still ignore customer criticism within Facebook groups, blog entries and Twitter posts, the panel lauded several forward-thinking companies that have taken a mature, honest approach to social media outreach to address these crises.

The big question is whether being seen to be listening and taking action is ROI enough? This is of course a world away from financial ROI, and the panel didn’t seem convinced that many CEOs would be willing to embrace this concept at present. That said, last night’s overarching take-away message was that social media is going to cause a seismic shift in the way consumers perceive businesses – with a far greater emphasis placed on trust and transparency– suggesting that perhaps these CEOs will be forced to re-evaluate their own definitions of ROI in the near future.

{ 4 comments… read them below or add one }

Laura Mead 02.03.10 at 1:09 pm

Wow – I really like Robin Grant’s perspective that social media investment is a bit like life insurance. I couldn’t agree more, we need to be a lot better at communicating this – it’s not necessarily about what you get in return for jumping the bandwagon but perhaps what the impact is if you don’t…

Scott Scanlon 02.03.10 at 6:39 pm

Good overview. I think social media/ROI means different things to different levels of organizations. An individual looking to promote their small practice has different goals than a GEO location small business. Obviously the larger the brand the more moods, attention, and other factors play a role. I find the small businesses tend to have great success and pull, personality comes through, and it’s equal listening and interacting. Which leads to increased sales and customer retention.

Oliver Fischer 02.04.10 at 12:30 pm

I agree with both of you… Espacially the question what happens if you don’t participate in social media (as an organisation or company) is very important. Because in my opinion if you don’t jump on the bandwagon you risk to get overrun. Nowadays, a news which has the attention of the online communities can spread around the world in a few minutes… This is a chance if you want to communicate things but it is also a high risk if you are one the communities are communicating about – even more if you are not looking at it yourself.

But there’s one thing I miss in this discussion: If you boost your investment in social media there are not only new opportunities but also high risks, if you do it “wrong”. Beeing on facebook or twitter just for the sake of it, with no strategy and no concept this can quickly leed to a loss of reputation. So it’s not only about being there but also about using it reasonable.

Katie Safrey 02.04.10 at 1:21 pm

Great discussion! It’s been a real challenge for our agency to prove the value of social media to our clients. I do think that being a part of the conversation is valuable, and there is real ROI in being able to address customers/clients/prospects directly, but oftentimes that’s not enough.

I think it’s critical for agencies to work with their clients to set goals for measurement before any type of engagement in social media. Social media programs need to be adaptable on a client-by-client basis with measurement expectations set in place before launch. For example, if a client is in interested in customer service – the success of a program can be based number of interactions/conversations with customers. If a client wants to generate leads the program can be based on traffic to a web form or homepage.

All in all – in my opinion, customizing campaigns based on client goals and objectives is the key to demonstrating the value of any social media campaign.

Leave a Comment

You can use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>