Confusion over the meaning of ROI in social media

You say tomato, I say tomahto….

Here’s a quick vocabulary lesson I’ve learned about social media ROI (“return on investment”), a topic I’ve been writing a lot about lately. In a nutshell: ROI means different things to different people, so it pays to be specific when you are talking about it.

3 ways we fool ourselves with social media metrics

This is part three of a series of posts about using social media metrics.

This is not the porn industry here, kids, and this is not about buying a house… SIZE DOESN’T MATTER!

– Steve Olenski, Too Many Social Media Marketers Still Believe Size Matters

An optical illusion: our brains add information that isn't there.
Would you believe the squares labeled “A” and “B” are identical shades of gray? Click the image for proof. (Developed by Edward H. Adelson of MIT.)

Don’t worry, it’s normal (statistically speaking) for people to fool themselves with statistics. So normal, in fact, that the fields of psychology and statistics can tell you exactly where things go wrong. Read on to find out how you and your organization can avoid being fooled by the Fundamental Attribution Error, Sampling Biases, and Information Cascade when you are evaluating social media metrics.

But first, what are we being fooled to believe? People would like to believe that more social media followers are better, more comments are better, more shares are better, etc. This might be, but isn’t necessarily, true. In fact the opposite may be true. Sometimes less is more. Consider the following hypotheticals, based loosely on real world examples:

Ignore social media metrics: what to focus on instead

This is the second in a series of posts about why I advise certain clients to adopt a “dynamic brochure” social media strategy, focusing on publishing, active listening, and measuring “pulse” without attempting to meet numerical goals for metrics such as “likes”, comments, shares, page views, Klout score, etc.

You can read part one here. In this part I discuss the benefits of a dynamic brochure strategy. In part three I’ll discuss false assumptions about the relationship between social media activity volume and ROI. And in a future post I’ll circle back to how social media ROI can be measured effectively, and some of the frameworks that can be used to measure it.

If you can’t connect social media investment to revenue generation, aka calculate ROI for social media, how does a social media  program help you? Let me count the ways. But first, a new metaphor. In part one of this series you were a rock star. This time you are a rock star’s stalker. You want to get to know a rock star online — really, really get to know a rock star online — what are you going to do? You’ll take a spin through all of that rock star’s (brand’s) web properties, gathering information, and saving or sharing the tasty bits with like-minded friends.

In real life (which for most of us means not being rock stars or having stalkers), who’s going to take this information gathering approach?

  • Prospective customers evaluating your offerings, either before or after hearing about you from other sources.
  • Current customers, and other brand fans, who want to share information about you (referrals).
  • Customers and brand fans just checking in to keep up with the brand.
  • Journalists and bloggers considering the brand for a story.
  • Conference organizers considering your people for speaking positions.
  • Potential employees, either before or after contact with your recruiters.
  • Current employees staying connected to the company, or sharing information with potential customers or Continue reading “Ignore social media metrics: what to focus on instead”