Comments on: The perpetual myth of ROI http://veryofficialblog.com/2008/08/01/the-perpetual-myth-of-roi/ Social Media Integration Means Business Tue, 30 Nov 2010 21:43:29 +0000 hourly 1 http://wordpress.org/?v=3.0.2 By: shannonpaul http://veryofficialblog.com/2008/08/01/the-perpetual-myth-of-roi/comment-page-1/#comment-131 shannonpaul Mon, 04 Aug 2008 22:28:10 +0000 http://shannonpaul.wordpress.com/?p=58#comment-131 I am so grateful for everyone's participation in this discussion! Feel free to drop me a line anytime! My main inspiration for this post was the fact that social media in general takes a lot of hits from skeptics who don't necessarily understand its value; who like to rally around the cause of old-school ROI calculations. My hope with this post was to turn that accusation on its ear a bit, by helping to spread the word that the old school ROI calculations were bunk to begin with. I understand the value of having numbers to support the work of social media, but since the investment is typically very small, the arguments would be better made with a change of values that can actually mean something. I am so grateful for everyone’s participation in this discussion! Feel free to drop me a line anytime!

My main inspiration for this post was the fact that social media in general takes a lot of hits from skeptics who don’t necessarily understand its value; who like to rally around the cause of old-school ROI calculations.

My hope with this post was to turn that accusation on its ear a bit, by helping to spread the word that the old school ROI calculations were bunk to begin with.

I understand the value of having numbers to support the work of social media, but since the investment is typically very small, the arguments would be better made with a change of values that can actually mean something.

]]> By: Laurie Slade http://veryofficialblog.com/2008/08/01/the-perpetual-myth-of-roi/comment-page-1/#comment-130 Laurie Slade Sat, 02 Aug 2008 16:41:18 +0000 http://shannonpaul.wordpress.com/?p=58#comment-130 As soon as we try to quantify, catagorize or, worse yet, control social media, we hamper the organic process that makes social media work. Undersanding that there IS an ROI is valuable. But trying to exact a statistic or an absolute quantity is stifling. Blog, Tweet and Post only truth and it will work for you. Spin, convolute the truth or out-right lie and it will bite you in the rear. As soon as we try to quantify, catagorize or, worse yet, control social media, we hamper the organic process that makes social media work.

Undersanding that there IS an ROI is valuable. But trying to exact a statistic or an absolute quantity is stifling.

Blog, Tweet and Post only truth and it will work for you. Spin, convolute the truth or out-right lie and it will bite you in the rear.

]]> By: Ed Nicholson http://veryofficialblog.com/2008/08/01/the-perpetual-myth-of-roi/comment-page-1/#comment-129 Ed Nicholson Sat, 02 Aug 2008 03:03:37 +0000 http://shannonpaul.wordpress.com/?p=58#comment-129 We're all compelled to measure and report. Sometimes it feels gratuitous. Many times it is. Many times, however, that measurement is good for us all. However: The best senior managers intuitively comprehend the value of community, positive reputation and relationships--no matter how you build these things. The inexperienced or naive deny or ignore that value. Sooner or later, there's a _measureable_ price to be paid for the lack thereof. We’re all compelled to measure and report. Sometimes it feels gratuitous. Many times it is. Many times, however, that measurement is good for us all. However:
The best senior managers intuitively comprehend the value of community, positive reputation and relationships–no matter how you build these things. The inexperienced or naive deny or ignore that value. Sooner or later, there’s a _measureable_ price to be paid for the lack thereof.

]]> By: David Szpunar http://veryofficialblog.com/2008/08/01/the-perpetual-myth-of-roi/comment-page-1/#comment-128 David Szpunar Sat, 02 Aug 2008 02:53:31 +0000 http://shannonpaul.wordpress.com/?p=58#comment-128 @Scott: I don't see anyone saying ROI can't be calculated, just that it's difficult or impossible to do so accurately in many situations involving social media. It's there just hard to put useful, measurable numbers to. True? Maybe, but I think the point is that relationships have more value than they're being given. @Scott: I don’t see anyone saying ROI can’t be calculated, just that it’s difficult or impossible to do so accurately in many situations involving social media. It’s there just hard to put useful, measurable numbers to. True? Maybe, but I think the point is that relationships have more value than they’re being given.

]]> By: Kate Carruthers http://veryofficialblog.com/2008/08/01/the-perpetual-myth-of-roi/comment-page-1/#comment-127 Kate Carruthers Sat, 02 Aug 2008 02:35:54 +0000 http://shannonpaul.wordpress.com/?p=58#comment-127 We still need to be able to justify the spend made on social media to the CFO in ways that make sense to them (if only so we can get more money later). The use of advertising/PR style metrics is done because it is easier to do than to come up with some real measurements. Coming up with ways to measure engagement is key to effective metrics for social media, and that requires good planning and definition of the campaign up front. You can't have good metrics if you don't plan for them from the start. We still need to be able to justify the spend made on social media to the CFO in ways that make sense to them (if only so we can get more money later). The use of advertising/PR style metrics is done because it is easier to do than to come up with some real measurements. Coming up with ways to measure engagement is key to effective metrics for social media, and that requires good planning and definition of the campaign up front. You can’t have good metrics if you don’t plan for them from the start.

]]> By: Scott http://veryofficialblog.com/2008/08/01/the-perpetual-myth-of-roi/comment-page-1/#comment-126 Scott Sat, 02 Aug 2008 01:47:15 +0000 http://shannonpaul.wordpress.com/?p=58#comment-126 Any good business exists for the singular purpose of making money. Contrary to what Twitter (and others of its zero income ilk) may have you believe, even the most well-intentioned & philanthropic businesses will not be able to keep their doors open if they do not eventually turn a profit, or at least break even. That being said, ROI should always matter, and can always be calculated. If I convince a client to invest half-a-million dollars in a social network, and they don't see an eventual benefit to their bottom line (in terms of sales, recruitment or employee efficiency and productivity) the project will be mothballed and I'll probably lose a client. Businesses don't get involved in social networks or design a beautiful lobby because it makes them feel good. At least, not the ones that will <em>stay</em> in business. Any good business exists for the singular purpose of making money. Contrary to what Twitter (and others of its zero income ilk) may have you believe, even the most well-intentioned & philanthropic businesses will not be able to keep their doors open if they do not eventually turn a profit, or at least break even.

That being said, ROI should always matter, and can always be calculated. If I convince a client to invest half-a-million dollars in a social network, and they don’t see an eventual benefit to their bottom line (in terms of sales, recruitment or employee efficiency and productivity) the project will be mothballed and I’ll probably lose a client. Businesses don’t get involved in social networks or design a beautiful lobby because it makes them feel good. At least, not the ones that will stay in business.

]]> By: Chris Poterala http://veryofficialblog.com/2008/08/01/the-perpetual-myth-of-roi/comment-page-1/#comment-125 Chris Poterala Sat, 02 Aug 2008 01:34:51 +0000 http://shannonpaul.wordpress.com/?p=58#comment-125 I hate ad equivalency. The PR trade subordinates itself to the ad world by using that "standard." If anything's true, the earned media from PR is "worth" more than the paid media "earned" through an ad buy. Lots of companies want/need to be able to measure the effectiveness of both PR and marketing activities. Maybe it's not ROI, but some sort of measurement is imperative, so that we can as practitioners can "prove" that our work is providing some sort of "value" to the client. There are lots of ways to measure a campaign that are not tied to sales, but may still be helpful to a client: - an increase in traffic to a web site (you can track these visitors for conversions!) - an increase in mentions on blogs/message boards - a change in tone for coverage of the company/brand (crisis communications) There are many others. I think it's also critically important to understand how a client measures success. We have great ideas and thoughts on how to measure this space, but we need to do a better job of educating clients and helping them gain a better understanding of these new measures and why they can be more powerful than "old school" measures like ad equivalency. I hate ad equivalency. The PR trade subordinates itself to the ad world by using that “standard.” If anything’s true, the earned media from PR is “worth” more than the paid media “earned” through an ad buy.

Lots of companies want/need to be able to measure the effectiveness of both PR and marketing activities. Maybe it’s not ROI, but some sort of measurement is imperative, so that we can as practitioners can “prove” that our work is providing some sort of “value” to the client.

There are lots of ways to measure a campaign that are not tied to sales, but may still be helpful to a client:

- an increase in traffic to a web site (you can track these visitors for conversions!)
- an increase in mentions on blogs/message boards
- a change in tone for coverage of the company/brand (crisis communications)

There are many others.

I think it’s also critically important to understand how a client measures success. We have great ideas and thoughts on how to measure this space, but we need to do a better job of educating clients and helping them gain a better understanding of these new measures and why they can be more powerful than “old school” measures like ad equivalency.

]]> By: Webconomist http://veryofficialblog.com/2008/08/01/the-perpetual-myth-of-roi/comment-page-1/#comment-124 Webconomist Sat, 02 Aug 2008 01:30:20 +0000 http://shannonpaul.wordpress.com/?p=58#comment-124 Some of the best points I've heard yet on ROI in PR/Social Media; advertising ROI is totally different, I think, than ROI in PR. Ogilvy Said: "I know advertising works, just not which half." And advertising measurement hasn't really gotten much better in terms of measurement. So how can it be a comparative to ROI in PR terms? How do you measure conversations? Do you pull out a calculator at a party? It's a company trying to turn a conversation into an ad campaign. They're 2 entirely different messages and mediums. TV advertising is "passive" and Web advertising is "disruptive"...Social Media is contiguous. Some of the best points I’ve heard yet on ROI in PR/Social Media; advertising ROI is totally different, I think, than ROI in PR.

Ogilvy Said: “I know advertising works, just not which half.” And advertising measurement hasn’t really gotten much better in terms of measurement.

So how can it be a comparative to ROI in PR terms?

How do you measure conversations? Do you pull out a calculator at a party?

It’s a company trying to turn a conversation into an ad campaign. They’re 2 entirely different messages and mediums.

TV advertising is “passive” and Web advertising is “disruptive”…Social Media is contiguous.

]]> By: Phil Baumann http://veryofficialblog.com/2008/08/01/the-perpetual-myth-of-roi/comment-page-1/#comment-123 Phil Baumann Sat, 02 Aug 2008 01:10:47 +0000 http://shannonpaul.wordpress.com/?p=58#comment-123 ROI probably won't go away (people love numbers, sometimes more than other people), but you hit something with "we need to simply change how we frame the entire purpose and value of social media". I don't know how much dollar value an attractive, open and inviting lobby area generates for a business, but I'm pretty sure it can make or break first impressions. You're right: it is about value. But knowing what that value means...ah, now there's a question. ROI probably won’t go away (people love numbers, sometimes more than other people), but you hit something with “we need to simply change how we frame the entire purpose and value of social media”.

I don’t know how much dollar value an attractive, open and inviting lobby area generates for a business, but I’m pretty sure it can make or break first impressions.

You’re right: it is about value. But knowing what that value means…ah, now there’s a question.

]]> By: Jason Whitmen http://veryofficialblog.com/2008/08/01/the-perpetual-myth-of-roi/comment-page-1/#comment-122 Jason Whitmen Fri, 01 Aug 2008 23:00:44 +0000 http://shannonpaul.wordpress.com/?p=58#comment-122 I found your site on Google and read a few of your other entires. Nice Stuff. I'm looking forward to reading more from you. I found your site on Google and read a few of your other entires. Nice Stuff. I’m looking forward to reading more from you.

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