Social Media Measurement – Would You Still Do It If There Was No ROI?

There has been plenty of debate about the ROI of social media. And just before my friend Eric Wittlake went on vacation this week, he stoked my creative juices once again with this thought-provoking post about social media measurement.

To summarize, the CMO of Kmart stated that TV is easier to measure than Social Media.  Eric agrees with him and disagrees with a Jay Baer tweet that suggests Kmart just “try harder.”

In the post “What’s Your ROI?” I suggested that marketers should be using Revenue, Pipeline Value and Customer Lifetime Value (CLV) as measures of how the total marketing spend delivers a quantifiable return. But these measures can be hard to track at the program, channel or tactic level.

OK, so maybe social media efforts are hard to measure, but even if they have little or no immediate ROI, would you still do social media? Eric asked me to comment, so here is my verbatim reply…

I think this is the one of the toughest issues in B2B Digital marketing. So strap in (I had 3 cups of coffee this am.) I think I’m game to try and respond…

I tried to address it with my post on Marketing Attribution: Who Gets Credit for ROI where I suggest we need to look at all companies that were touched by marketing campaigns that ultimately became sales-opportunities. Then I suggest looking at all the contacts from those companies and all the marketing touches made on those contacts. Finally, you need to assign a relative (and imperfect) value to the activities that correlated to pipeline dollars. This will help to get to a better view of Marketing ROI for Demand Gen activities.

The problem with my suggested approach is that it only calculates ROI for the marketing touches that can be assigned to a contact. So in your example, TV and Social Media would both miss out on getting any credit. And I know that lots of investment in social or TV with an effective approach will yield results and influence buyers.

An alternative approach I would strongly suggest is to conduct detailed customer media consumption research and ensure that your marketing mix models line up at least in relative priority to the media our target consumers are spending the most time with. Now this doesn’t consider effectiveness directly so you will need other models like pre / post unaided awareness studies and probably some regression and multi-variate hocus-pocus to get a better view on what really works.

Bottom line is that this is all very hard, especially when you look at the bigger marketing mix question. I agree with you that KMart is right that it is easier to measure TV (and direct mail and email and paid search) but that doesn’t mean that we should only do the things that are easy to track.

In the end, for me, it comes down to this: our customers use social and we need to be there. If we are there and can figure out how to be effective, we can influence buying behavior. If we’re not there, we’ll never have the chance and will miss out on a huge opportunity.

So yes, I still think we should be investing in social media despite the fact that it is hard to track and even if we could show no immediate return. Because in the end, if our customers are there and we are there and if we can add value, then we will gain value. Eventually. Measurable or not.

How about you? Please tell me your thoughts in the comments below or on Twitter, LinkedIn, Facebook.

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Michael Brenner

Michael Brenner  is a Top CMO, Content Marketing and Digital Marketing Influencer, an international keynote speaker, author of "Mean People Suck" and "The Content Formula" and he is the CEO and Founder of Marketing Insider Group, a leading Content Marketing Agency . He has worked in leadership positions in sales and marketing for global brands like SAP and Nielsen, as well as for thriving startups. Today, Michael helps build successful content marketing programs for leading brands and startups alike. Subscribe here for regular updates.

8 thoughts on “Social Media Measurement – Would You Still Do It If There Was No ROI?

  1. I completely disagree! No.. JK, JK, I’m with you solidly on this one.

    I think a lot of business owners, and even marketers lack the foresight to really understand where 6 months of community interaction can take them. Marketing has always been this dollars in, quick results kind of world.

    This is something different, and that’s always been my argument. Easy for guys like us to see, Michael, others need convincing. Posts like this are certainly needed more.

    1. Thanks Ryan,

      Timing is really the issue. It’s the issue in marketing’s relationship with sales and it’s the issue in marketing’s relationship with the CEO. Yes, marketing can produce quantifiable business results right now. But the real value is in what we can do for the future of the business by focusing on the total customer experience. It means engaging earlier in the buying process and later after we’ve converted prospects into customers. The benefits are more revenue, higher conversion rates, lower costs of sales and happy and retained customers.

      Have a great weekend and thanks for the comment!

  2. Defining social media ROI has always been tricky- especially because measurement factors vary from business to business. As you mentioned, the most important thing to consider is that your target audience is using social media. If you don’t use it, you’re definitely missing an opportunity.

  3. Hi Michael, thanks for the shoutout! This is, to me, an easy question to answer. If there is really no ROI, if there is no difference in your business or your personal life because of your involvement in social media (and you are doing it ‘right’), then no, don’t put the time and resources into it.

    However, today, I would seriously question either the measurement or the social media practices of any company that said there is no ROI. Social media is hard to measure and it has impacts across a range of business functions. I’m confident no one today is measuring every impact social media has in their business, so no one can confidently state there is no ROI from a good social media practice in their organization. (And anyone with a good practice likely has enough measurement in place to be confident there is ROI, even if they cannot measure it all the way through to the bottom line of their business yet).

    Love the question you asked here. A good way to get back into social media and marketing after vacation!

    — @wittlake

  4. iContact’s own Peter Ghali just created a blog post and whitepaper around this very subject: https://blog.icontact.com/blog/social-media-roi-a-deeper-look/

    And his point is a good one — define your goals in Social Media. Listen to what your customers are saying and define from there. Once you do that, figuring out ROI is easier. Not easy, easier. 🙂

    It’s not an exact science, but as you said, Michael, our customers are there, so we need to be there. And I believe that eventually we will figure out how to effectively measure our efforts.

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