Why do some people get it and other don’t? Starbucks boss Howard Schultz is quoted in Marketing today saying social media is the channel that takes priority and in the same issue we hear that four fifths of markers do not see it as core. Whose right?
Schultz is asked in the interview which one channel will take precedence, here’s his answer:

“I think social media is a natural extension of our brand because we want to do things that are unexpected, and to speak to all sorts of people who are engaged with social media. It’s tough to measure but there is an incremental benefit to sales.”

It is a great quote as in it he encapsulates not only the essence of what social media can achieve (the unexpected and the variety of conversations you can have), but also what for some is the problem or the stumbling block to using it: ie it is tough to measure. Where they ask is the ROI.

It is this lack of ROI that has led to only a fifth of marketers in organisations like Coca-Cola, RBS and the COI viewing social media as a core element of their marketing strategy (so says an Internet Advertising Bureau study).

Marketing reported that only 22% surveyed said that “social media forms a major part of their promotional strategies” and that many marketers are “confused about the role” social media should play in their marketing plans.

In contrast to that 22% are the 75% who cited proving ROI as social media’s biggest challenge and the 64% who said measurement was the biggest hurdle to investment.

I was having this conversation yesterday with someone from a New York based social media consultancy (Mike Moran form Converseon) and we were talking about PR.

It is a difficult discipline to monitor or to assign ROI to, but it is widely seen as essential. Corporations employ numerous PR agencies, their own in-house PR’s and not forgetting internal corporate comms people.

No one questions the value of PR or thinks too much about assigning ROI to it. It is clearly done well worth its weight in gold.

That is one thing t(the PR thing) that struck me, but looking back to the comments Howard Schultz made he must think about ROI when he thinks about the 200% rise in profits at Starbucks in the last quarter.

He must think about ROI when he discusses how the coffee chain attracted 5.1 million Facebook fans and 768, 527 followers and how according to Nielsen the time spent by users on social networking sites has more than doubled since December 2007.

Nielsen said last month that consumers spent more than five and half hours on social networking sites like Facebook and Twitter in December 2009, an 82% increase from the same time last year when users were spending just over three hours on social networking sites.

If you want to talk to these people you’d better be where they are.

I’ll mention Dell again. You kind of have to and while the $6.5m it made via Twitter is a drop in the ocean it is part of a growing drop that many savvy firms are part of.

Look at the other end of the spectrum from a £1000 PC to a £10,000 car. Ford is spending 25% of its marketing spend on social media and James Farley, CMO, said put it nicely last year: “You can’t just say it. You have to get the people to say it to each other.”

Of course he could say that. Ford went big with its Fiesta Movement to launch the little car that people have had here for years. It started its campaign in 2008 a whole 18 months before the cars shipped stateside. The results as this Businessweek piece says were eye opening with 37% of Generation Y aware of a car that was not even available as the result of blogs, tweets, Facebook and YouTube.

What more do you want?

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