Can You Define the ROI of Social?

   

By Jenna Lebel

Last week, I attended the first-ever Radian6 user conference in Boston with 3 of my colleagues. Appropriately named Social 2011, the two-day event was packed with industry experts, multiple breakout sessions and panels, training opportunities and exciting announcements (Salesforce acquisition just one of many). Overall, the conference, filled with like-minded, social media savvy individuals, was a tremendous success for a company organizing their first user conference.

At a conference heavily focused on monitoring, listening and analytics the panel discussion titled “Can You Define the ROI of Social?” was something I was instantly interested in attending. The panelists included Joe Thornley of Thornley Fallis, Marshall Sponder of WCG, Ken Burbary of Digitas and Katie Paine of KD Paine and Partners. In a lively session that should’ve been dubbed “Social Media SmackDown,” I took more away from the dynamics of the panel itself and questions asked by the audience than the actual content shared by the panelists. They each had different opinions and perspectives on the ROI of social and could only really agree on one point: that there really is no one way to define the ROI of social. The three talking points for the panel were defining ROI, business objectives versus ROI and establishing metrics. Though they tried their best to stick to those areas of focus, the conversation steered away very quickly as a result of several disagreements among panelists. My biggest learning from the panel was that these so-called experts have no real definition for social media ROI, but find it fun to debate regardless. Despite often uncomfortable arguments among the panelists, the session was NOT a wash. It was entertaining (one attendee even said it was more entertaining than Wrestlemania!) and even valuable. Although social media ROI was not fully defined or demystified in this panel, through audience questions and interactions between panelists, I did gain some insight and knowledge.

Here are 6 key takeaways from the “Can You Define the ROI of Social?” panel at Social 2011.

It’s All About Storytelling

A great point made by Ken Burbary was that as social media analysts we are storytellers. It’s not just about presenting the data and sharing numbers, it’s about making stories out of it. A good analyst should be able to identify the relevant data points, account for them and shift strategy accordingly.

Improving Instead of Justifying

One of the more passionate, albeit aggressive, panelists, Katie Paine, advised attendees that money shouldn’t be spent justifying your business and reason for existing, but should instead be allocated to making the business better. This came in response to an attendee asking a question and explaining that he has executives who are constantly seeking proof of value.

It’s Not Just About Sales Earnings

The panelists did agree on one more thing: ROI should not be looked at just in terms of sales earnings. In fact, be suspicious of a single number in general. Even more of a mistake is thinking that one tool or one data set is going to give you your ROI. It’s just not that simple.

Social Media is Long Term

This point is obvious, but still worth sharing. Social Media is long term. To measure it in the short term is really missing the entire point and doing a disservice to your brand and your overall strategy in the space.

The Value of a Fan/Follower

This nugget of information came as a result of an audience question: “What is the value of a fan?” Each panelist weighed in on the topic with various theories and industry catchphrases and buzzwords. But among that was this gem:  to determine the real value of a fan you need to look at whom they are, what they consume and how often.

The ROI of Social Media is Contextual

Perhaps one of the reasons the panel struggled so much to come up with a definitive answer to the session title’s question, “Can You Define the ROI of Social?” is because it’s completely contextual. They should have prefaced the session with this important piece of information. Instead, it came out during the Q&A section at the end. Hard data points and metrics vary based on the business objectives and frankly, the business itself. Further, essentially everything can be measured which is probably the cause of a lot of frustration around identifying ROI. Navigating the various metrics can be painstaking so it’s important to know the numbers that matter to key players in your business.

So can you define the ROI of social? Ultimately, the panelists could not. But that’s not to say they didn’t have some key pieces of advice and information to share in their attempt to answer. And that’s not to say we aren’t closer than we were to formulating an agreed upon answer to the question.

What do you think is important in defining and ultimately measuring the ROI of social media? Will we ever uncover a definition or just spin our wheels trying? Share your thoughts in the comments below! To learn more about the ROI of Social, download our free ROI Ebook here

To see the entire conversation around Social 2011 click here. And for a recap of all sessions, click here.