moneystackThe topic of ROI is not a new one but it remains to be a stumbling block for most in the Social Media Marketing field. The problem isn’t that an ROI can’t be derived, the challenge is, most are using old ways & thinking to get to that ROI place in an environment that requires you to think differently. Using old practices does not help you get there because the rules have shifted yet once again.

I got into it with a few people on Twitter over the weekend, @CreativeWisdom @kriscolvin, @mackcollier, @thebrandbuilder and @virtualcfo. We bantered back and forth sharing our views, recognizing we could get there with similar but slightly different metrics. My conversation started with Kris & Mack, we actually started with the Quantity vs Quality of Twitter Followers topic and then we moved onto the ROI question. Then Olivier jumped in along with Leah & Scot.  There is a distinct difference between ROI & Impact according to Olivier Blanchard (@thebrandbuilder), his definition is interesting and reasonable I think. He states, eyeballs are not ROI, Impact is not ROI, ROI can’t be calculated with an equation. In one of Olivier’s video’s I was able to relate to him because of my 15 years in Radio & Television, he uses F.R.Y. (Frequency, Reach, Yield) as a way to get to an ROI.

Scot Justice made this statement, “You can capture cost of Social Media by implementing a procedure where every prospect is asked about a blog then Calculate SM$ per impression then ROI”. That is an old school way of tracking and has some merit, we used a similar system in Radio to track campaigns, I would like to hear Kris & Olivier’s perspective on his theory. Talk about a hot topic with some very talented and passionate people, this would make a great panel on Owen Greaves LIVE! (I’m working on it).

I do recommend you visit each one’s website or Blog and see what they are doing and how they are doing it, contact them and ask the questions, I’ve listed them for you:

1.) Olivier Blanchard

2.) Kris Colvin

3.) Scot Justice

4.) Mack Collier

5.) Leah Dossey

No they all aren’t Marketers in the traditional form but they do need to understand how obtain a form of ROI. There are many that claim Social Media Expert Status, many think they have a clear understanding of what an ROI is, in my opinion they aren’t and they don’t get ROI.

I’m certain this topic will never really go away because many will have an opinion, many will claim they have the secret formula, the list that do is very, very short. I love this kind of dialogue so I’ll keep bringing it.

About Owen Greaves

I'm a Futurist, I write, speak, and teach the open & free business model, the future of business. Create. Differentiate. Deliver.  

1 Comment

  1. James Stratford on June 19, 2009 at 7:22 PM

    There were some interesting conversations on ROI. It’s amazing what a broad amount of perspectives there are out there when it comes to that topic in the context of Social Media. Perhaps the most logical way to find the answer is a combination of methods to come to a conclusion then verifying what the commonality is and affirming that as a valid measurement.

    The one element missing out of the equation is the cost of time (we all love social networking and social media, however there’s an opportunity cost that is very real). I definitely share some of the above in my view (not claiming to be the definitive expert), but the percentage of followers that view my page (Offer, Charitable Request, or Informational ie. Blog Post) definitely weighs in. The metric for a promoted link is a solid 3% before RT’s and 5% with RT’s. That’s not the purest number I’m looking for, but atm I don’t have enough data to validate the conversion rate to the above three activities. Additionally I’d have to factor in the RSS and Double Opt In subscribers to my blogs or marketing lists. On the RSS and Double Opt in Subcribers it’s at a 12% conversion rate atm, but I need more data to be certain the metric is valid.

    My Two Cents. 🙂