The Social Media ROI Challenge: What it Really Means (and 7 Related Faulty Assumptions)

Last week I wrote a post for the Digital Era Thinkers Blog entitled, “12 Hopes for 2012: Enhanced Adoption of Digital Technologies.” Recognizing that technological advances continue to outstrip our willingness to address the opportunities and challenges they present, the post focuses on the psychological challenges we face and our individual and collective ability to tackle them in thought, word, and deed.

In the post, I expressly stated that I wanted to focus on the positive rather than the negative. But after I shared the post, I got some classic pushback in a response from a person who runs a company that provides management and leadership training. She wrote, in part:

We are constantly asked about the time/value, pros/cons, and cost/benefit of social media. These folks who ask barely have time to do everything they have to do for their jobs, let alone figure out the most effective way to use social media. We network and ask those we trust what we can use (and tell clients to use) to get relevant info quicker, faster, better. The key word is RELEVANT. The vast majority of social media is full of useless, time wasting verbiage that lacks filters. The key to figuring how to best utilize the best of it and get rid of the worst of it, would be some form of easy to use, customized and targeted data mining. Until this comes to the fore I don’t see how it can provide the ROI on a leader’s or executive’s time. I am sure that most people in busy jobs feel the same.

After responding to her directly – and then seeing yet another negative reference to “social media ROI,” I decided to write a follow-up post. This post offers a different perspective on the social media ROI (return on investment) challenges put forth by organizational leaders and other experienced professionals who resist increased digital engagement. Playing off the ROI acronym, it provides alternatives for interpreting the ROI argument. It then articulates – and counters – seven assumptions on which the resistance arguments are often based. The post concludes with a call to move away from specious arguments and to balance concerns about ROI with the equally important COI (cost of inaction).

Click here to read the full post. As always, feedback is welcome.

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Steve Cottle

I’ve heard and read quite a bit about the ROI of using social media, but I like the inclusion of the COI concept. I think it’s a really important component of any business case for using (or not using) social media – one that I’d venture to say is often overlooked.

Courtney Shelton Hunt

Thanks for your comment, Steve. Yes, I like to highlight consideration of the COI as well – and mentioning it always seems to make people go “hmmm”… I only wish I had coined the term!

Corey McCarren

I’ve found that social media can influence how your coverage is in the traditional media sphere, which few people would argue the value of. If you use social media platforms, and a reporter is trying to research your company, the more you have online the better. For example, imagine a reporter is reporting about cement companies. If the reporter looks up “cement companies” on Google and your business comes up the most, they are more likely to see you as a legitimate company to ask about cement. Also, engagement can enhance the customers experience if they have a complaint, which may make customers more likely to return.

Courtney Shelton Hunt

Those are great examples of potential benefits, Corey. And I think they also highlight the limitations of a narrowly-focused definition of ROI (e.g., focusing only on revenue). Many of the benefits of social media – like the benefits of other efforts – are indirect rather than direct. That makes them tough to measure, but it doesn’t mean they’re not worth doing. Thanks for commenting!

Dorothy Ramienski Amatucci

Thanks for tackling this issue. I especially like your points (in your longer article) about the fact that none of this is going away. Web 2.0 is here to stay, and wishing things were otherwise is simply counter-productive IMHO. Also, now that most of these services are cloud-based, it doesn’t cost that much to try. Failure is no longer NOT an option 🙂

Courtney Shelton Hunt

That’s a great point about the cost, Dorothy. The much larger cost is in terms of time, which people also seem to have a hard time wrapping their brains around. From an organizational perspective, leaders need to allocate human resources to digital initiatives – but that doesn’t mean they should “throw” someone at it or hire an intern. They need to be thoughtful about hiring/assigning the right people and making sure they have the capacity and support to be successful. As individuals, we all need to think about the best ways to achieve our goals, many of which involve leveraging new technologies. The future is already here…

Courtney Shelton Hunt

Robert, I’m happy to discuss both the opportunities and challenges created by social media and other digital technologies. If you do your research on me and my work, you’ll find that my perspective is very balanced, and I don’t fall as neatly into the social media advocate camp as you apparently think I do.

I would love to have a rational, balanced discussion about the merits and minefields of new technologies. In fact, I promote those kinds of discussions through both of my digital communities (neither of which is revenue producing, FYI). If your intent is to “intellectually pillage and plunder (me) in front of an audience,” however, I have no interest. Not because I lack cojones or am in any way intimidated by you, but because I don’t see the value in it. As with many other challenges we face in the world today, I’d much rather focus on moving forward to develop productive and viable solutions rather than engaging in point-counterpoint rhetoric or ad hominem attacks.

So, personal jousting? No thanks. A respectful, collaborative, balanced discussion? Absolutely.

Tommy Siragusa

If you are frustrated with trying to find the ROI in social media initiatives, stop looking for it. What’s the ROI on blogging? What’s the ROI on word-of-mouth conversations? It’s a conversation. It’s chance to have direct contact with your audience. The real question is, what will you be losing if you don’t participate? The conversations will be happening anyway. You just won’t be part of it. It’s a cost-effective touch-point that you can control. My advice; participate or settle for allowing your organization to look socially irrelevant.

Dennis Desmond

It’s a shame there are so many Troglodytes/Luddites who are able to make a living by going out to the public and spewing their anti technology tirades….

As both a consumer and manager of Social Media within an information agency, I have found MANY additional uses for Social Media that may lie outside the traditional norms than just “hype and hope.” Here are some examples of how various USG agencies are using Social Media platforms:

1. Strategic Communications – getting the official message out to a much larger and more varied contingent than would normally be reached through conventional media like the WSJ, Fox/CNN, or Public Advertising

2. Emergency Communications – Government agencies use Twitter, SMS, Blogs, Facebook/Google+ and other media for communicating with our customers and our colleagues. When the 3G/4G went down during the earthquake here in Virginia, we used Twitter and SMS to communicate with others which routed the comms to outlying towers and got our messages out.

3. Early Warnings and Indicators – Monitoring Social Media gives insight into the thoughts and trends of a much larger population than waiting for the news to pick it up. From an intelligence standpoint, monitoring worldwide Social Media provides a deep strategic insight into the trending actions of political parties, grassroots movements, activists and others.

4. Emerging technologies and capabilities – Social Media provides more rapid insight through crowd sourcing than the one way communication strategies of reporting we typically see.

5. Problem solving and Crowd Sourcing – through Social Media platforms the ability to resolve organizational issues and problems through a wider discussion platform involving a greater number of interactive participants.

6. Influence Operations – the ability to influence a greater number of individuals through personalized, interactive dialogue and to be able to have a conversation with a larger number of like thinking people.

7. Targeted Reporting – the ability of anyone, anywhere to be able to accurately report facts and activities to a greater audience, devoid of filters, controls and hindrances.

8. Identity resolution – the ability to resolve individual identities based on the collective Social Media profile and online activities that then allow for identity mapping and predictive analysis. This is useful in everything from fraud prevention to marketing to counterterrorism.

These are just some of the uses the USG has found for Social Media platforms. Those who fail to embrace these new forms of communication will, in the end, be left behind. Convergence is impacting Social Media as well as areas such as entertainment, shopping, dining, gaming, and sense making as the distinctions between these areas continue to migrate.

I see a significant ROI in using Social Media and as we have seen historically, the COI of ignoring these types of technology can be both catastrophic and damaging to our national interests.

Courtney Shelton Hunt

Thanks for your thoughtful comments, Tommy and Dennis. That’s really what I was trying to advocate in my post: a thoughtful approach to considering whether social media engagement is/is not a worthwhile investment. At this stage in the game, I understand and respect individuals and organizations who choose not to engage, as long as they have given the matter serious consideration and made an informed decision.I’m also very okay with people who are ambivalent, confused, and on the fence. What frustrates me is those folks who are dismissive and critical of new digital technologies without adequately learning about or researching them (i.e., I know what I think; don’t bother me with the facts!). I don’t think a rational assessment and fair consideration are too much to ask for…