Don Bartholomew of Acumentics Research blogs five truths about social media roi that need to be heeded.
- Return on Investment is a financial metric
- Attempts to reinvent the acronym are counterproductive
- ROI in social media has a time dimension
- Linkage and correlations are important.
- All ROI studies are custom.
Read the post for details, but recognize that all of the formal research supports the idea that demonstrating value doesn’t necessarily mean calculating ROI. Sure, a lot of financial folks would like to see it, and it’s possible in certain circumstances to do so right now (hello, Marketing Communications?). But the value calculus — especially in matters of reputation management — isn’t easy to distill to A+B=C.
For one thing, it’s a complex system — buying decisions (or decisions to keep what one has and not buy something different) rely upon factors well outside the control of the communications team — for example, user experience. If someone has a lousy experience with your product, no amount of discussion will make them satisfied and willing to say good things about you to others.
Marketing typically works best by generating awareness, so that the customer has the opportunity to place you into their consideration set. The point at which you’re in that set allows companies to share information and persuasive comparisons that have the chance to vault you into the lead position in the consideration set. The sales process then takes center stage to close the deal, and customer service and product quality try to keep the customer happy.
How much does each of those touch points affect the buying decision? That’s market mix modeling and multiple regression’s question to answer.
Let’s keep our heads when measuring value and not overreach — after all, the last thing we want is to research everything out and find out we don’t matter.
Tags: measurement, PR measurement, Social Media, Twitter
Hi Sean,
Thanks for picking up on my post and extending the discussion. I agree with you that not all value created can realistically be quantified. Certainly there is value in making X consumers aware of something, or getting your targets to engage with you. Increasing the likelihood they would seriously consider your brand. The list goes on. There is value created by PR in each area, but ROI normally is done only with the final transaction – usually the sale. All the non-transactional value that proceeds a sale typically exists in good-will and other intangible areas. Cheers, Don B @donbart