“Some things that count can’t be counted;
some things that can be counted don’t count” – attributed to Einstein
MBAs, accountants, financial analysts, and many others have been trained to evaluate activities by their Return on Investment (ROI). This has often been honored but ignored. Particularly in marketing initiatives such as mass media advertising. In this case, the often large expenditure is either accepted of faith or evaluated against questionable criteria such as recall.
The issue of ROI returns when asking questions such as should you mount social media initiatives such as blogs, wikis, or a presence on Twitter. The ROI question was prominent at this mornings Social Media Breakfast. The good folks at HubSpot, have provided a video of the talks.
A broader and I think more appropriate question is what is the value of a social media (or any other program)? This begs two kinds of questions – relating to benefits and costs. Some authorities such as David Scott
Wish to finesse the question entirely. At a recent seminar I attended, he asked “what’s the ROI of putting on your pants?”
I think the question or something like it deserves an answer and you should expect it to be asked.
There are a variety of conventional and emerging ways of tracking traffic, repeat visitors, time visiting, mentions, searches, etc. Of course, it always pays to ask customers how they found you. In aggregate these are more comprehensive than measures of traditional advertising, but not as compelling as measures of direct response advertising.
Costs for new media can and generally be far lower than traditional media. A viral video on YouTube need not and generally should not have the same lavish production values or costs as that for a 30 second prime time spot. The key to mew media success is rapid experimentation with low cost programs. Low cost does not mean free. The person who blogs, follows twitter, maintains your Facebook page, etc. could always be doing something else. Managers will always have to use judgment. Reasonably designed tests of social media should be cheap enough that they approach the Nike test of “just do it”.