This week I've had the pleasure of lecturing on the Master in Digital Marketing course at the IE Business School, which offers the #3 ranked MBA course in the World according to Forbes. It's a daunting task – these people know their business, and are already far more knowledgeable about social media than most people I've presented to or taught in the past. Which is why I need your help.
In session one, we did an indepth exploration of the theory behind, and practice of, social media both consumer/audience facing and inside the organisation (eg. "Enterprise 2.0"). In the second session I showed them – some of them already knew how to do much of this – how to use the whole web as their canvas.
But, as you'd expect from a top notch group of students, they rose up in unison at the end, and asked me to come up with real hard data on the ROI of social media. Now everyone in the social media industry knows that there are plenty of vendors, service providers and social media gurus who claim to know the answer, yet I get the feeling that most of these "infuencer metrics" and long tail curves just aren't going to cut it with this audience. And they shouldn't.
But there is growing evidence that, although social media spend is said to be growing, few of those spending the dosh have worked out a way to measure the ROI. Indeed, a study – and I don't put a huge amount of faith in the results of a single study, but it is noteworthy regardless – suggested as few as 14% of professionals across a range of industries claim to measure ROI for their social media activities.
For as long as I can remember, the main benefits of hosting a community on a site, or otherwise engaging via social media, have been to:
- increase brand loyalty and affinity
- increase the number of opportunities to sell to consumers (by increasing repeat visits)
- get users involved in creating fresh, new content on the site
- learn more about users – primarily demographics, but also observing behaviour
- in a few instances, it's also about crowd-sourcing customer service and/or innovating new ideas for service delivery and products
- reach out to new audiences, and better serve captive ones
Inside the enterprise, it's all about making efficiency savings by bubbling content and knowledge to the top, increasing connections between staff, and supporting useful behaviours such as group collaboration, sharing, etc.
I have over simplified, of course, but those are the main things I hear the industry saying.
Now don't get me wrong – I very strongly believe that all of these things are worthwhile. Social media can help organisations reach out to new audiences, embrace existing ones, and there's nothing at all wrong with being more open, honest and transparent no matter what business your in. And within the enterprise, I hate nothing more than beareaucratic structures that stifle, rather than assist, people who hold the knowledge, creativity and skills that a business needs to thrive.
However, when it comes to actual, concrete metrics, there are little. Social media doesn't always increase sales by x percent. Enterprise collaboration systems aren't necessarily responsible for a x percent reduction in cost base.
It might be because we're trying to measure something that can't easily be measured. It's taken for granted that word of mouth advertising is the most effective marketing tool, yet we don't, as far as I'm aware, have a way to measure it. And on the Enterprise side, we can't measure the value, or savings, of two employees dreaming up a creative solution or new product during a fag break. Probably because, in most instances, there is no cost involved in implementing it – it just happens.
But that's a tough argument to make with shit hot marketing students who are used to measuring the effectiveness of campaigns and other activities.
Which leaves me – and our whole industry – in an awkward position:
Plan A: I can either go back to them tomorrow and tell them that, actually, it wasn't their wonderful £3 million campaign that increased sales by 20% year on year, or their new management structure that led to greater effectiveness and efficiences, it was the fact that it was sunny outside, interest rates were low, and people just generally felt happy in themselves. Implying, basically, that you simply can't measure this sort of thing effectively.
Plan B: I come up with some compelling evidence, both anecdotal and hard quantitative data, to prop up our argument – one I strongly believe in – that social media, and enterprise social media, not only genuinely make an impact, but that its ROI can be measured.
So I need your help. Help me come up with a strong, evidence based argument(s) for either Plan A or Plan B – by 15.00 London time (BST) Friday or I'm toast. In return for your efforts and insights, I'll post the results of this research, as well as output from the discussion, right here.