As the man behind the Mojo here, I do most of my own research. But (dare I admit this?) I can’t find everything. Which is why I rely on the kindness of friends, family, and strangers to point me in interesting directions.
Just the other day, my niece, Val (she of Thanksgiving Hand Turkey fame) sent me a link to Beth Kanter’s blog. Beth’s recent conversation on Return on Investment (ROI), caught my eye. Although directed to nonprofits, it’s just as applicable to for-profit businesses.
Did you know that originally ROI was a measure of return on the total investment in the entire business – not just a measure of how much return was made, for example, on marketing campaigns or equipment purchases?
Yep. No jive. So…with that factoid in mind, when you’re putting your own budgets together, where do you place the value of social media?
Kanter says, “Many social media strategists and measurement gurus have challenged using a straight financial calculation to determine whether or not an organization should spend money on social media. They are not saying don’t use numbers. They are saying that you need to measure value -and that value doesn’t necessarily translate into dollars.”
Social media provides an excellent way to “listen” to your audience. Kanter provides some examples, including one from the US Air Force. (Bet you didn’t know the USAF had a blog!)
Greenpeace asked its online visitors for campaign ideas. One of the ideas generated (whale tracking) even worked to drive traffic to the site.
So when you consider your investment in social media (time, money, creativity, et. al.) remember that it’s not just about technology – it’s building relationships. In the end, that’s where your ROI will be most evident.
I totally agree! Isnt that what social media should be in it purest form, what it was created for? Relationships. Getting to know people you might never otherwise know, and starting a closer relationship with those you already know is the foundation of social networking.
Here’s where I’ve arrived – you can’t really measure ROI – that is investment in your early efforts. These have to be low cost experiments. Then as your effort matures and you harvested insights that make your effort better – you may begin to measure the return on investment in tangible dollars terms …. but there’s lot of intangibles too
I think you’ve arrived at a logical place, Beth. Somewhere on your blog I ran across the phrase ROI equalling Return on Inspiration and I really like that thought. Thanks for weighing in.