What's the Return on Your Social Media Investment?
Flickr Photo: Felix IdanLast week, I got some evaluation results back from a social media training I did last month in DC. My favorite comments was:
Holly talks too fast.
That came up at least a half a dozen times. Point taken: in the future, no coffee before my session. But my second favorite comment was this:
Holly said we have to demonstrate the value of social media tools to our bosses. But how do you show that blogging leads to donations, or volunteers?
That, dear evaluator, is the $10,000 question. In social media, we encourage our stakeholders to interact with each other as much or more than they interact with us. Connecting the dots between your MySpace page and that new volunteer you got, however, becomes very difficult. But just because it's a tough question to answer doesn't mean we shouldn't try.
This week in WeAreMedia, we're focused on ROI (Return on Investment). Beth Kanter suggests that a MadLib may help some of us begin to articulate our social media ROI. I'll do just about anything Beth tells me to, so I gave it a try. Here's the MadLib she constructed for us:
Our organization (fill in the name) is implementing a social media strategy that includes (fill in the blanks). The key benefits are (list).
Here's my completed version:
NTEN is implementing a social media strategy that includes BLOGGING. The key benefits are:
- INCREASED website traffic overall
- BETTER search engine rankings
- MORE conversation with and between NTEN Members
- It's an easy CHANNEL for saying things we think are important
- ESTABLISHES and MAINTAINS the voice/personality of our organization
- EVALUATES community opinions/interest by how often certain posts are read or commented on
This is a good start, but I'm only 10% of the way to establishing an ROI. Think of ROI as a simple equation:
(Time & Money Saved + Money Earned) - (Time & Money In) = ROI
Ideally, you want a positive number out of the equation.
Tracking what you put into the social media experiment is pretty easy: I spend about 45 minutes a day on our blog; the rest of our staff spends probably an hour a day, combined. We don't really spend any money on it, because we're not advertising and it's part of our content management system. So, our investment is about 8.75 hours per week of time.
Tracking the value of the benefits is the really tough part. What value should we place on the higher search engine ranking? What value can we assign to the voice of our organization? We can't directly tie blog readership to people who join NTEN, either. If I can't quantify all the benefits, how can I calculate ROI and really demonstrate the value of social media?
For now, I'm happy enough to say that I FEEL like our investment is paying off. What about you? Are you satisfied with felling that your investment is worth it? How are you tackling ROI?
When you're doing any project plan, you have to start with a guess. How much time do you THINK it will take? Obviously, a guess is just a guess, so the best you can do is PREDICT ROI before a project starts. Once it's over, you should have better data about time spent to apply to other experiments.
I think that the equation above doesn't describe ROI 100% correctly.
How could you asses ROI at the beginning of your project? You don't know how much time will it take...
Great post.
Some value is intangible and not able to put a number to it. Some you can.
What value should we place on the higher search engine ranking?
The cost of paying for search engine advertising and the time to monitor and tweak ads
What value can we assign to the voice of our organization? We can't directly tie blog readership to people who join NTEN, either.
you could, possibly, track this if you surveyed people who signed for membership -- how did they hear about it or what motivated them to join. Not sure how valuable that is? Also wondered whether or not you could track with Google Analytics - a pointed to signing up for more NTEN member information - if you had a tagline in your blog posts? That again, may not be worth it.
There is another intangible value - how much does the discipline of writing on the blog improve staff expertise which in turn benefits the organization? Compared to cost of other professional development.
Could it be as simple as staff hours spent writing on the blog to audience hours reading the blog? If the blog is meant to be a communications medium, than you're far more efficient writing a blog post and broadcasting it than spending time responding to everyone's individual emails, right?
I think a solid MadLibs outline would be a sweet method to conceptualize the process of analyzing a social media campaign, and look forward to seeing a usable tool soon!
Good question. I guess social media works to somewhat of a significant degree, as I read this article from seeing it posted on Twitter!
Exposure on the net is hard to justify when it can't be tracked. A lot of it is usually based on the feeling of good karma gained.