Like learning to love Klingon cuisine, social media has an ROI

Bruce Wilson

Here’s a long-ish comment I posted this afternoon in response to a interesting blog post by John Moore, CTO and SVP of Boston’s Swimfish, entitled More crazy talk, Social media, no measurable value but you have to have it?


Thanks, this post is a solid contribution to the ongoing discussion about social media ROI. I flat out agree with much of what you and other commenters say, particularly the insight that people who don’t know how to derive ROI (or don’t want to try) declare it irrelevant. Here are four more thoughts for your consideration:

First, by way of analogy, what’s the ROI for public relations (PR)? So you get some good press. And oh, sales go up. To what extent are those sales causally connected to that PR event? Even when some click-track data can be obtained it’s impossible to know for certain how much revenue to attribute to certain real world occurrences, much of social media included. But there’s no denying that PR can generate revenue, and thus companies above a certain size generally invest in it without having a deterministic ROI requirement. How are one-off social media experiments any different?

Second, what’s the opportunity cost? Sure, social media channels can generate massive revenue (your Dell example). But what if the same resources were put into different channels? While this doesn’t moot the issue of ROI, the added complexity of comparative ROI seems to confound many people trying to make simplistic balancing-the-scales decisions.

Third, I have the strong impression that for many (most?) decision makers in many (most?) roles and companies, ROI literacy and business intelligence (data + computational resources) are too weak to cope with the question. (Perhaps someone working for a vendor in the BI field already knows if this is the case.)

Finally, I think the social media ROI question is a bit of a smokescreen. The biggest reason the question is so hot right now is because so many business people (C-level, marketing, operations, engineers – across the board) find social media at least partly alien and fear it’s inedible. I imagine it’s like being invited to a Klingon banquet. People who don’t have a clear understanding of social media mechanics and don’t want to take the time to figure it out are looking for an excuse to stay home.

As a social media consultant when entering into a client relationship I almost always begin by working though some strong negative emotions surrounding social media (particularly Twitter) which kick up “business” excuses for foot dragging. As more and more people develop a taste for it, social media campaigns should be treated like any other marketing campaigns: first they are experiments, then they become known quantities.

– Bruce

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