For whatever reason we seem to need to assign a dollar value for anything and everything, maybe there isn’t one, but we just have to have one. I’m not going to layout the proper conditions or equation in this post, I’ll let you do you own research, but let’s spend some time getting it right.
Yesterday I talked about Barking At Shadows, where we put far too much stock in the number of fans, likes and followers. Those indicators make you feel good but are really a false sense of security, it just means someone came knocking, they probably didn’t do anything else. So we start asking the question, what’s the value of a follower, a fan and a like…what’s the ROI?
The question of Social Media ROI comes up all the time, and immediately everyone points to the number of followers, likes and fans, but that would be the wrong thing to do right? In my last post I said I would introduce you to someone far smarter than I, he knows this stuff, he lives it. You will love his directness, he calls it as he sees it, so be prepared to learn Social Media ROI with passion. My good friend and author, Olivier Blanchard understands Social Media ROI metrics, he has clear and definite thoughts on how to plug Social Media into your business as well. I am a little biased but I highly recommend you read his book called Social Media ROI, you will be amazed at what you don’t know. I was in an exchange with Olivier and friends on FaceBook the other day in reference to this Mashable story posted on Olivier’s FaceBook wall called, “4 Ways to Convert Facebook Fans Into Super Fans”.
Olivier said with the above link:
Actually, no. Don’t. Attract fans with ads? Create advocates with… contests? Seriously? Who writes this crap? I wonder what the folks at Brains on Fire think about this garbage.
The problem with the “FAN” & the “LIKE” or the “FOLLOWER”, there is no real accurate way of measuring its value, it’s similar to KLOUT trying to accurately measure ones influence. Individually they don’t matter, but the SUM of these inaccurate metrics is more important. The SUM leads to a perceived value, not a real value that can be manipulated. The “SUPER FAN” is one more attempt to bring value to a single digit, WOM is hard enough to measure, the total number of those WOM messages matters more than the single blabber mouth being a SUPER FAN. But what do I know, I’m Canadian.
Olivier responded with:
You know how they do it, right? The CPF (cost per fan) gets magically transformed into fan value:
Because the fan cost $4 to acquire, that fan’s value is now estimated at $4. So the media buyer’s ROI equation, based on media equivalency models, becomes a factor of average acquisition cost – actual acquisition cost. It works like this:
“The average (cost) value of a fan is $4. Our CPF is $2. We acquired 100,000 fans, for a total fan value of $400,000. Your acquisition cost was $200,000. We provided an ROI of 200% with this campaign.
Whether the agency’s fees were included in that $200,000 depends on the agency. Sometimes it is, sometimes it isn’t. That’s the scam.
I responded with:
Its all scam, whomever scams best…. wins.
The conversation ended there, but almost everyone tries to game the Social Media Fan, Like and or follower, its barking at shadows.
The ultimate place to be is for you (your business) to bring extreme value, powerful solutions, backed by qualified data, and that might actually include the shadows, but it’s the lessor of all the metrics to be watching.
There is much to learn, and much more to unlearn when it comes to the future of business, but you should start with Olivier’s book, then his blog, then my blog. I am more about a new of changing, Olivier wants you to be honest and realistic about what you measure, and he’ll get in your face if you or I start spewing a bad message. We’ve talked about this value before, over and over again, it keeps coming back to the table. All it means is, many still don’t understand what it is and where it should go.
The Fan, the Like & the follower do have a value, but let’s put that value in perspective, and most importantly, let’s put that value in the right place in the equation.
- Barking At Shadows (owengreaves.com)
- Which are the most important social media metrics? (Hint: they’re nothing to do with social media) (brendancooper.com)
- Be careful what you ask for, you might just measure it (briansolis.com)
It finally arrived, Olivier Blanchard’s book called Social Media ROI, Managing and Measuring Social Media Efforts in Your Organization. I am truly humbled and honored, I was not expecting to find my name in the book, thank you with all the appreciation I can muster.
I have never met Olivier, but I have had an online relationship with him for over 3 years, and I can tell you he knows what he is talking about. He is firm in his stand and he has always taken the time to try and explain why he takes the stand he does, a man on a mission, a man with Integrity, which you will read in his book.
Now, for some reason the world has missed a simple observation, Social Media (conversations)is not new, its just gone digital. What has been overlooked, is how to accurately translate these conversations into revenue, how these conversations become conversions, how they actually bring about a result worth measuring. No Olivier is not the only one to see that conversations can have a Return On Investment (ROI), he is however, the only one to date that can articulate it with clarity and passion. And now with this book, he is working with you side-by-side.
What caught my eye upon cracking the cover, is how Olivier walks you from beginning to end, from what a Social Media Program IS, what you need to think about, to what it should look like,and what you should get from such a program. It’s the first Social Media University TextBook in my humble opinion.
Right from the beginning you’ll read how to create a social company, all the way to analysis and reporting of your social media program.
This book is easy to read and yet it is serious heavy lifting at times, but if you take the time and follow Olivier’s thinking, the confusion simply goes away. If you do the work, you will have a solid foundation of how to not only leverage Social Media networks, you’ll know how to participate in them, how to plug Social Media into your business, how to listen, how to monitor. and as he says, ” Listening Before Talking”. You learn more from this book than sitting at your computer trying to figure it out. Olivier is your Social Media ROI Mentor, all for the price of a book.
One of my favorite chapters is, The Eleven Key Best Practices for Social Media Program Management.
I highly recommend reading this book many times, not just once, it is packed with so much, one reading would merely set you up to fail. You have in your hands a text book if you study it, you will increase your odds of success in all social networks. A MUST have on your book shelf. This book will protect you from those who consider themselves Social Media GURU’s, the so called Social Media Expert.
This book will play a huge role in my work, how I see the future of business, how this fits an open and free business model, and how an ROI can be achieved. I look forward to implementing many of the steps in this book, and you will too, it’s the best investment you’ll make for the future of your business.
I recently had a couple of close friends tell me they didn’t get my blog, they felt it was dribble and wasn’t useful to business people. I was kind of taken by surprise, and yet I wasn’t all that shocked either, mostly because people don’t get me at the best of times. I even felt a little sad and I think I felt sorry for them. Once I picked myself up off the floor and got past the sting, they got me to thinking.
When I started blogging, I spent most of my time talking about nanotechnology, shortly there after I started thinking about the bigger picture of how technology is and will impact society 5, 10, 15, 30 years down the road. How will business look in the next 3 – 5 years, helping business and individuals to create ideas to adopt the future of business. Showing you some trends and the paradigm shift that is taking place, after all, the industrial age is dead right.
I tried to explain to my friends what my blog was about, and they said, “OK, fine but it doesn’t give me answers for today”. I said, ” I’m not giving you answers, my goal and job is to make you think for yourself, to think of your own answers”. I merely want people to think for themselves, but it appears my friends want the answer handed to them on a silver platter. Which means, they are not paying attention to the bigger picture, they are only putting out fires rather than looking ahead. Is that you?
If you don’t pay attention to what’s coming, how and why are you in business? Every business is built on the very fact that there is and will be a future, if that’s true, why are you building a business? As I told my friends, my blog is trying to give you a glimpse of what’s to come, and hopefully, it helps get the creative juices flowing so you will be ready. If you are paying attention. If not, I see dead businesses.
There is much to be learned here on this blog, if you are paying attention. Are you starting to get my message yet?
I have to tell you, after a couple of hours sharing what it is my blog & I do, I wondered how difficult it was for you and others to understand what I’ve been sharing for the past number of years. I’m going to make it simple for you.
START PAYING ATTENTION TO THE BIGGER PICTURE!
Lift your head up and look down the road, start asking questions, start educating yourself because no one is going to do it for you. If I seem a little testy, it’s because I care, I want good things for you, but you have to play your role in this game called life & business.
If you were reading my blog and paying attention, you would know that there are another 3 billion people coming online in the next 2 -3 years, that 60% of all commerce will be done online, and that the industrial age is dead, no really it’s dead. You would also know, that there is an ROI in social media, that the world has gone crazy with being social and mobile, what does all this mean to you and your business? I have only mentioned a few things that should concern you, you should be worried about how this activity will impact your business, and for that matter your day-to-day life.
There, I feel better now. I hope you find at least one thing you can take away from this blog that helps, if not, ask me a question and lets talk about it. Afterall, I’m here to help, I want to help you figure out how to address the changes we are going through right now. It’s painful for some of you, it’s painful for me too.
Happy Blogging and pay attention to what’s going on around you, the world is watching, and the world needs you to be ready.
I was over at altitudebranding.com’s website responding to one of Amber Naslund’s brilliant blog posts, she gets 5 stars from me almost everytime she posts something. I think many of us have rants pent up deep down inside, but we’re not sure what it is or where we should put it. I can’t articulate as well as Amber, but I too share her concern and wish list if you will.
Please read her article called, Will The Business People Please Stand Up! You can read my response there too and I am including it here below as well, why, because I think my response is a good blog post too : )
OK, You got me on this one, I know what you are trying to say but lets look at who we are talking to in this environment. Forgive me if I come off ranting.
I am only going to draw from my experiences of being here online since the late 80’s when Gohper and WAIS were the tools of the day, FTP was the strongest tranfer tool ever!
It will appear like I’m tooting my own horn but really I’m not, like you, my hearts desire is that I could share my experiences from the trench building sound I.T. Strategies, showing Blog readers how a traditional ROI is calculated, and show you how to determine your businesses breakeven point, but that’s kind of boring me thinks.
Walking through an I.T. Strategic Plan, the steps you should consider working through to at least set the foundation for that plan, that’s not all that exciting either. You can find the above on my Blog, not in great detail but at least at a high-level approach.
There are literally hundreds of, if not thousands of sites on how to do a proper business plan too.
Everything you mentioned plus mine above are badly needed from a professional perspective, but my experience so far, here in Social Media circles anyway, people are not that serious about how to do those things. This is still a place to escape to after the day job, or even during the day job.
The How to build a good blog, how do I monetize it and make millions, the how do I get 10 million followers and so on seem to be the lions share of Internet users and scammers today. Even I want to learn some of those things.
My point is, right now, I would love to see what you have so brilliantly articulated but the reality is, the circle is still too small. Why? Business owners still don’t fully understand what they have in their hands when it comes to the Internet.
You & I know many of the same great people working hard to change the mindset, we want to educate and arm business owners with the right tools, metrics and perspective to succeed here. The problem is, they still don’t take this platform seriously enough, it’s still recreation.
Sorry but I had to get that off my chest. There’s more but it’s a moot point.
So what’s the answer, I think you & I and host of others must stay the course, continue to fight the battles we can win, do our best to educate the business owners if they’ll listen. This is going to take a little longer than I would like to see, but I know eventually this environment will have to be taken seriously because the shift is well under way.
It’s not that different than trying to save people from going to hell, business is changing rapdily, if you don’t change with it, your out of business.
I recently took a small poll on Twitter and asked who you thought were THE people to keep eye on in 2010. People that are bubbling under and don’t have status or a high profile just yet in Social Media. Who do you keep going back to for information and help, they aren’t as popular as Gary Vaynerchuk, Chris Brogan and the Jeff Pulver’s of the Internet.
So for fun, I have listed for you 5 people I keep a close eye on and I think they are going to make the jump from bubbling under to making a huge contrinbution to how we use, measure and interact in Social Media Networks. These people are not only smart but a lot of fun to chat with, hang with and I suspect do business with, I’ll let you be the judge of that though.
My Top 5 for 2010
If you have a Top 5 please leave a comment and tell us who you think we should watch in 2010!