Last week I attended the first meetup of the Marketing & Technology group, which turned out to be a great first meeting. Since the intersection of marketing and technology is where I’ve lived and played for more than a decade now (since it was just a lonely crossroads), I’m looking forward to seeing the group grow and evolve.
The first meeting featured a discussion panel, to which Ryan Caligiuri posed a number of questions. Several of these had me wanting to interject, like the question of measuring social media ROI (Return on Investment), a practice which some have completely discounted as inadvisable or downright impossible.
Permit me to interject…
In my view, the question isn’t so much if, but how. While it may be true that a lot of small businesses don’t measure the ROI for much of what they do, that’s no excuse for not measuring it on social media. The problem lies in the nature of social media and what kind of return it produces: if you don’t understand these facets, you won’t be able to measure its ROI effectively.
There’s no direct link between time or money spent on social media pursuits and revenue. Sometimes there may be a direct return, but this is the exception and not the rule. Social media pursuits have a gradual but cumulative effect over the long term, which translates indirectly to increased revenue for your business. The more directly you try to align social media with revenue, the less effective it will be, because it violates the most basic principle of social media interaction.
In the textbook, Informal Sociology: A Casual Introduction to Sociological Thinking (1963), William Bruce Cameron wrote:
It would be nice if all of the data which sociologists require could be enumerated because then we could run them through IBM machines and draw charts as the economists do. However, not everything that can be counted counts, and not everything that counts can be counted.
He was correct, of course, and we find social media ROI much more in the world of sociology than economics. The issue isn’t that a baby unicorn dies every time someone tries to measure social media. You must make efforts to gauge the effectiveness of your marketing activities, and social media is no different. It’s just that you first have to measure engagement levels and not merely followers or units sold. It’s a bit more complex, and you have to really get the indirect cumulative nature of the beast. In the world of old-school marketing tactics, it’s more like calculating the ROI on a billboard than on a direct mail campaign.
I’m reminded of a fantastic children’s story that I used to read to my kids, The Last Unicorn on the Prairies by the late Winnipeg writer Rick McNair. In the story, a group of barnyard animals goes in search of a unicorn. Despite being taught what clues to look for, when they meet one face-to-face he’s wearing a hat, and only the horse recognizes him… and the horse isn’t about to give away his distant cousin’s secret. Social media ROI can be a bit like McNair’s unicorn that way.
The final word on social media ROI & unicorn mortality
Social media ROI is not a straight-line calculation, and so far I’ve not seen anything approaching a standard method of arriving at a value. Don’t draw the mistaken conclusion that it isn’t possible — it’s a grave error to think something impossible simply because you haven’t seen it done yet. It’s even worse to propagate such thinking. For now, I think you’re much better off to answer the question of whether your social media efforts are continuing to be effective than whether they reach the desired ROI stated in simple dollar values.
Note: no unicorns were harmed in the creation and presentation of this post.