Hey … it was another exciting week … for me, one of those weeks where lingering concepts and thoughts jelled. As many of you know, I been sharing social media via this blog and SocialSteve at Twitter for better than 3 years now and I am persistently trying to convey the real value of social media (no snake oil play) and best practices. And if you are going to take a stance like that, you’re going to have to talk about ROI. Yes, I’ve covered this topic numerous times and put my recommendations on the table in a number of articles, but today, I have something a little different …
Time to think about social media in another way. Maybe we are just too short sighted about the whole thing. Social media is a channel to build strong brands. Strong brands are not built overnight. So if social media is about building brands and building brands takes some time, why shouldn’t we think about social media ROI over a longer period? Social media should not simply be a campaign or a promotion … it is a part of business for the long haul.
So this week, a few things happened that punctuated this view.
Piece 1 – No Quick Hit Lottery Wins
First, I met with someone that runs a boutique PR agency. We were talking about successful marketing and building solid relationships. She said to me in a very puzzled look, “Everyone wants something quick. They think you can just waive a magic wand and all of a sudden get tons of fans or followers.” I couldn’t agree more with questioning this convoluted perception. Furthermore, the most important parameter is the number of fans or followers that engage with your brand, not just the raw number of followers.
Piece 2 – Initiatives to Build Brand Growth
A bit later in the week, I saw a great Charlie Rose interview (is there ever a bad Charlie Rose interview :)) with TED Conference Curator, Chris Anderson. I suggest listening to the entire 18-minute interview, but one part of the conversation was specifically applicable to and supports the notion of social media ROI being looked at over a longer period.
Chris was asked what he has learned about the online space and answered …“When you give something away sometimes, it is the very smartest thing you can do. People pay $6,000 to come to TED, and when we first started to think about giving the talks away for free on the web, a few people thought we were crazy. That we were giving away the crown jewels. But as the world interconnects, those rules about giving away are kind of changing. It turns out that there is huge power to give something away because in an interconnected world it can then spread like wild fire across the web. And so far from killing the demand for the conference, it actually increased the demand for people to come and attend. And more to the point, instead of the conference being 800 people once a year, it’s moved to being about 750,000 people everyday now watch a TED talk.”
He went on to explain that TED (Technology, Entertainment, Design) has taken a life of its own. It has spawned to TEDx events that allow people to organize their own TED events and more than 1000 are held. Going forward, 4 or 5 are being held ever day throughout the world. That’s viral when you consider 1000 events with numerous participants. The TEDx events have turned into a content sourcing pipeline for the TED. Thus TED is “aided now by thousands of people around the world doing this – all of their own back.”
So when the initial discussion of making the presentations available for free when people paid $6000 to hear it live at the conference was made, the vision was long term brand power. I am sure there was an ROI objective there, but it was not a short term sales figure. It was about building audience that had affinity for the brand, became audience and advocates. Not only does this support the long term sales objective, but also supports sales growth. Profitable, sustainable growth – not short term sales objectives.
Piece 3 – Appropriate Social Media Metric Parameters
Then I read another piece that helped solidify this ROI mentality in my mind. Nick Elliot, a Forrester analyst, wrote an excellent article titled “Which Social Media Marketing Metrics Really Matter? (And To Whom?)”. The post highlighted a new report Nick authored called, “Social Media Marketing Metrics That Matter.” Elliot’s social media metric guidance is based on a model that breaks down by constituent:
I like this overall approach, but want to emphasize that while the monitoring frequency maybe (and should be) short term, the objectives should be long-term based looking for a continuous incremental growth. Short term fluctuations are not nearly as important and relevant as a long-term normalized positive growth slope.
Piece 4 – Influence and Enhanced Lifetime Value
Social media is about engagement – engagement with your customers and target market. Successful engagement builds brands. So what does it mean to have successful engagement? I really like the perspective laid out in the new released report “Liminal – Customer Engagement in Transition” was produced by Razorfish. In it, they state that engagement is “about more than just driving revenue – we believe it’s to drive LTV (lifetime value). But, not just that, either. At a time when some newer channels – such as social media platforms – make brand engagements public, it’s to build enhanced LTV – or what we call eLTV. eLTV is built not just on the strict monetary value of one customer to brand, but also on each customer’s unique power to influence others to be interested in it. All men and women might be created equal, but all customers are not. The trick is to identify those customers who can deliver eLTV – lifetime value that takes into account each customer’s ability to influence.”
Putting the All the Pieces Together
Social media ROI should not be looked at short term. You don’t just do something and expect quick hit measureable results. It is about building relationships that help build your brand and in the longer term producing measureable results. If we can all agree that social media is about building relationships, I’ll ask this – What strong relationships have you ever had that were built immediately?
Second, understand the power of sharing. I can personally vouch for the positive return on investment I have gotten producing my articles, insights and experiences for free on the web. I have been afforded great residual value in simply sharing – much like Chris Anderson described.
Third – understand that there are different appropriate metrics for different audiences and even though you may collect and deliver reports on them in short time periods, the true measure of your success must be looked at in a longer time period.
And fourth (but certainly not last), look to develop lifetime value customers and relationships. And when you develop these relationships, know how to distinguish those that are influencers – give them more – treat them extra special.
Now, are you ready to discuss social media ROI in your organization?
Make It Happen,