Measuring ROI in a brave new (social media) world

In his book Socialnomics, Erik Qualman asserts that the only ROI on investment in social media you can count on is that your business will still be around in a year’s time.  It’s a tough concept to grasp for organisations used to measuring their marketing efforts by the 400% rule.

Social media has turned much of traditional marketing thinking on its head, particularly in organisations used to single rather than multi-stage marketing.  It can leave marketing and management teams, particularly those operating in the events sector, scratching their heads on how to measure success vs effort.

The difficulty lies in our ability to measure internet marketing efforts in a consistent and meaningful way.  Although this is now easier than it once was, it still relies on other people’s algorithms and an understanding of the errors that will inevitably be part of a process that is generalistic and mechanised.

One of the most frustrating aspects of this measurement process is that it is often impossible to see the results of efforts as they are happening – other than on a live twitter feed or by constantly running a report or refreshing a browser.  And, despite appearances, social media is constrained by the same mechanism that has been a restrictive factor for traditional media: the fact that someone else owns the environment in which you are publishing. Once again brands and individuals find themselves limited to measuring those actions which the technology providers have decided are important rather than those which are meaningful to a particular organisation.

An essential tactic is to decide which metrics are the ones which are going to give you the best feedback and a springboard to move your brand messaging forwards enabling you to continually tweak and refine your messaging and your products.  The key is in creating a positive feedback loop that delivers information which you can action quickly and visibly. While facts and figures are reassuring, real ROI can only be delivered if there is also a plan in place for drawing visitors, fans and other participants further into your community once you have initially caught their attention.

Finally, remember that since your audience can change direction many times in one campaign, let alone a 12 month-period, your measurement processes must now be measured in days and hours rather than weeks and months.