Is your business still hung-up on Social Media ROI?
That’s it – I’ve HAD it. For years now, I’ve paid one telecoms service provider after another for my mobile phone, month in, month out. And you know what? In all these years, I’ve never ONCE received any return on investment for this!! Can you believe it??!! I’ve been a good customer, paid on time, and have never once received a single penny back from these communications charlatans. I’m cancelling my contract – there’s simply no ROI to be had from my mobile phone.
Ludicrous? Yes. Absurd? Yes. Why? Because, quite simply, the value of a mobile phone comes from the service it provides. The fact that it doesn’t generate revenue for me is irrelevant – it’s a communications tool that makes everyday communications infinitely easier and more convenient – that’s its value.
And you know what? I’m sure more astute readers of this post will already have twigged where I’m leading with this (you’re a smart bunch) – the same can be said for Social Media.
I’ve been having an interesting discussion recently with a senior marketer in the Marketing Professionals’ Network on LinkedIn. He claims that he often has difficulties ‘selling’ Social Media to his clients because they want to see demonstrable transactional ROI before they commit to using this channel.
But, just like the humble mobile telephone, Social Media is a COMMUNICATIONS tool. @smashadv, an American copywriter / ad man I regularly converse with on Twitter, sums this up succinctly: ‘Comm-Unity’. Enough said. So why do so many people remain hung up on ROI? Is it because they, blindly, still consider Social Media as a marketing device, rather than a communications channel? I really think it is.
Sure, an e-commerce platform delivers verifiable sales – visible, accountable ROI that keeps the bean-counters happy to invest. But what drives consumers to that platform in the first place? A special offer announced on Twitter? A coupon posted on Facebook? Discounts offered to people checking-in on Foursquare? An email voucher? All of these and more?
As marketers and advertisers, we are in the communication business – plain and simple. It is our job to convey the right messages, to the right people, at the right time. And how do we do this? Through communications channels, plain and simple.
So if you still have clients hung up on ROI, take a few moments to ask them if they use a mobile phone. I guarantee that none of them could live without it, despite its lack of ‘measurable’ ROI.
JUST LIKE SOCIAL MEDIA.
Callum Saunders
Digital Marketing Manager at the Stopgap Group
www.stopgapgroup.co.uk
www.twitter.com/stopgap
The Marketing Professionals’ Network
All Comments
Hey Callum.
Couldn’t have put it better myself and the mobile phone analogy is enough for any prospective, or existing client for that matter, to Get It!
ROI is a major stumbling block for customers who are desperate to see some return on social media marketing, even from day one. !!!
Great post, nicely put.
Look forward to reading more
Best
Mike
Mike
Thanks for your comments Mike. I’ve also had a few responses to this post through Twitter, one of which suggests ‘ROE’ – return on engagement – as being more apt for this digital social medium.
Regards,
Callum
Marketing is communication, ergo Social Media is a marketing channel. But not direct marketing/sales
It is about engaging customers, building up the buzz, improving reputation – these are important marketing factors
Great post and analogy Callum.
I think one of the reasons so much emphasis is placed on ROI is that a lot of business see social media as separate from the rest of the business. This makes the perceived investment required to start and embed it seem quite substantial hence the reliance on ROI.
I do think however that social media, phones and other channels can produce tangible and measurable ROI. Though I do believe that if a social media is going to work it should not be implemented with the sole purpose of generating a direct ROI as it provides you with such a limited view of the medium.
Olivia
Marketing and Community Manager
@6Consulting
Authorised Radian6 Reseller
Hi Olivia,
Thanks for your comments – I couldn’t agree more. I genuinely believe that businesses incorporating Social Media into their marketing functions rather than creating separate ‘Social Media’ departments will succeed – mainly as SM becomes simply another piece of an integrated digital make-up rather than a standalone department that is held accountable to ROI constraints.
I also agree with your second point – Social Media CAN provide demonstrable ROI. Let’s not forget that Social Media is still a relatively ‘new’ medium, so consolidating proven success stories is still something that is in its infancy. Nevertheless, we are slowly starting to see these proven case studies trickling in – I have bookmarked some great examples of PROVEN ROI success on Stopgap’s Delicious page under the ‘ROI’ tag – http://delicious.com/stopgapmarketing/ROI
In supplying these ‘success stories’, I am aware that I may appear to be contradicting my post, in which I argue that Social Media’s use should not be held purely accountable to ROI – but these examples should aid those who remain hung up and unconvinced by my telephone analogy…
Hi Callum,
Thanks for your reply.
Again I completely agree. The industry definitely needs more case studies and practical examples. As you say they are absolutely key.
Really glad you mentioned this as it also relates to a discussion I recently posted on our Linkedin group – Social Media Insights (if your interested)and it’s always good to know that I’m not completely off the mark
Thanks for sharing your bookmarks I’ll definitely have a look.
whether you like it or not… you’ll have real difficulties attracting major budgets to social media unless you engage in a debate on ROI … pointing out success stories and putting social media into a wider context as above seems more constructive than lambasting clients for being ‘still hung up on’ things senior management will hold them accountable for…
Also not sure if social media is really a pure communication channel, isn’t it the ultimate marcomms – not every consumer will want to engage in an active dialogue with a brand and some will consume passively? Just wondering aloud
Market Research doesn’t have that problem and I’d like to see someone give us the ROI on that.
I just think we have to be fair with this ROI debate. Social Media is a relatively new online channel, nobody can say it doesn’t have potential because there are definite case studies proving its success.
I may be showing my age here but I remember when the Internet was a new channel and there were people who were asking the same ROI question. Look at it now…
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