Social Media ROI

Is there such a thing as social media ROI?

The answer is NO!

Here’s why, a sound and convincing reason given by Neil Schaffer, one of the top social media strategist, voted by Forbes, in his article There’s No Such Thing As Social Media ROI – It’s Called Business ROI.

Social media, like your website and internal IT technology, becomes part of your company’s infrastructure over time.  It’s not a question of having a robust social presence just like you need a robust website: You simply must have them.  For professionals, I call it your “Social Infrastructure,” which is why we feel compelled to be on sites such as LinkedIn and Twitter to network and keep up with the latest news recommended by our social circles.  We see benefits from doing so.

As social media grows rapidly and in my previous posts I hope that I have convinced you enough the fact that social media is so important in business because it impacts many different business aspects including HR (hiring and employee productivity), IT and operations (collaboration tool and product development), and PR (external communications).  Companies are hiring more and more marketing and communications specialists with titles that include “Social Media”, but where do they place them?  It probably doesn’t make sense to have one Social Media Analyst/Specialist in every department because social media helps every department in business.  But how do you measure or quantify how much it helps.  It’s like measuring trust – hence social media ROI doesn’t exist.  It seems kinda silly to think of Social Media as a strategy that we have to spend a separate portion of budget for.  If so, then should we also have Social Media HR Analyst, Social Media Operations Analyst, and so on?

Rather, social media is a tool that could be widely used across departments in any business.  It improves the way each business function works rather replacing the traditional tools.  Be careful when you touch upon this point because as I mentioned before how traditional marketing budget is dropping much lower than digital marketing budget.  Come to think about it, digital marketing is not a replacement for everything you learn in your MBA marketing classes.  It’s an separate line item in your budget for a reason.  The reason is that it’s an add-on item, and as it increases, your traditional marketing budget decreases.  This shows a balance in your overall budget.  Also, it shows that your company is doing the right thing, which is to keep up with what’s trendy and what direction business is heading towards.  In other words, social media should be tied with your business goals.  The approach to optimize social media ROI or number of likes are not going to do your company any good.

So the answer to the question Is there such a thing as social media ROI is still NO!  Business gets this wrong easily because it doesn’t make sense to measure social media ROI.  If you search for Social Media ROI on Google right now, your search result will be flooded with articles on 14 simple formulas to measure social media benefits, or on methods to track your social media efforts, or on debates on whether 10% is enough for social media marketing budget.  Besides, 88% of 750 surveyed marketing professionals didn’t feel they could accurately measure the effectiveness of their social media campaigns.  Fifty-two percent said that dealing with social media ROI was their biggest frustration.  The right way to do is to measure your business ROI, track social media efforts and analyze how it impacts your business.  Eventually if planned and used correctly, you will see the impact of social media has on increase bottom line and sales revenue.  I am not convinced that there is a formula to measure social media ROI.

Should we neglect tracking social media?

The answer is again, NO!

In order to know if your investment in social media is worthwhile, you better keep track of what works and what doesn’t work in your social media tactics, using big data,to follow the trend of social media and the big data explosion.  You should be keeping track of your social media efforts because simply you must have it in your “Social Infrastructure”.  The impact of social media on business has already been discussed.  It’s not necessary to stress any more how much it could help or hurt your business.  Social media gets real!

For example, there are companies that specialize in tracking social media, stressing the fact that picking the right data is very important in evaluating your social media efforts.

Should we still hire a Social Media Specialist?

Now we have to turn the answer to YES.

A person who understands all these points mentioned in this post should be granted this title because he or she is skilled of running social media campaign to make it a tool to support any business goals.  A social media team is necessary, as long as the they understand their roles and objectives, as well as the functions and tools in social media presence.  The social media team should be involved everywhere in your organization.  The qualified candidates are also experienced in business, communications, and most importantly, marketing and data analytics.  Gian Oliveri, a senior consultant with executive staffing firm, in giving a guideline How to Hire a Social Media Specialist has stated:

“Anyone can build a Facebook page, but it doesn’t mean it’s successful. These people go deeper and rely on analytics to run good campaigns, tying it all back to ROI,” says Gina Oliveri, senior consultant with executive staffing firm Bowdoin Group.

Lastly, data analytics skills are becoming more necessary. “[Social media specialists] need to know not only how to run campaigns and ads, they need to know how it all ties back to ROI and how the business can generate revenue from it,” Oliveri says. “You need to be a number-cruncher at some level—put on headphones and look at the data, then come back with intelligent insight so the business knows what to do next.”

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Develope Your Products with Social Feedback

Last time we have discussed about social media being used as collaboration tools in business to increase sales revenue, productivity and worker creativity.  To involve some visual sense, the right half of the picture below displays 4 different advantages of social media as collaboration tools for Enterprise Suite Let us look into what the left half of the circle is about today and see how these four advantages help business with product development strategies.

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Strategy Rethink for Social Media by Ashok Vemuri, Americas Head and Member Executive Council, Infosys Technologies Ltd., discusses why companies need to rethink top-down product creation approaches in the Social Media age.  The video is a thorough summary of Infosys SocialEdge‘s perspective of consumer engagement using social media.  Social media has gotten real and there is almost no activity that cannot be done online nowadays.  Social media becomes marketers’ best friend because of how easy it is to access in formation and data to take traditional marketing beyond normal.  All different methods of market analysis (SWOT analysis, competitive analysis, industry analysis, stakeholder analysis) could be done properly online, in a timely manner.  More importantly, social media is right now the quickest, easier, and cheapest way to have interact with customers.  SurveyMonkey has 14 billion registered users in 2012 and only growing more rapidly everyday.  Success of services such as SurveyMonkey, Qualtrics, Google Consumer Surveys prove that consumer engagement has become a priority for businesses.  Companies have been using online surveys to study consumer behaviors, which hugely impact their product development strategies.

Consumer engagement is done through social collaboration.  Collaborative marketing means involving customers into the product development process.  Crowdtap and Quirky are examples of successful collaborative marketing platforms.  Quirky recently partnered with GE to launch a GE & Quirky Co-Branded Product Development Initiative.  The method is called crowdsource  ( in which marketing research starts from the crowd, or consumers, rather from within the organization or value chain (employees, staff, suppliers, etc.)  Participators in crowdsource could be early adopters or lead users who have innovative ideas and realization of what they need but can’t find in the market.

“We admire Quirky’s speed, collaboration and inventiveness and by opening up lab-proven technology and patents to everyday inventors we can help inspire new ideas and accelerate advanced manufacturing innovation. At GE we are passionate about innovation at market speed, working with entrepreneurs and finding new models of business, and this partnership is just another way we can help inspire invention and help scale it. We are excited to see how the Quirky community uses tools from our scientists and technologists around the world to develop products in an entirely different way.” — Beth Comstock, SVP and chief marketing officer, GE.

Customers seek for information online to make their buying decisions; business use the same information as criteria for their market research .  CMO Council report 48% of CMO’s track online customer reviews.  Brutally honest reviews on drive company decision and strategies in product development.  Companies are allowing co-creation of products from consumers by applying customer feedback to innovation.

Not just to extract information and opinions from customers, companies are also using social media to provide customer care.  Most customer service platforms have been transformed virtual.  Problems and solutions could be found for any unique customer within a short period of time using online collaboration.  Companies are getting proactive, testing customer satisfaction and solving customer problems through company’s Facebook, LinkedIn, and other social media channels.  It is believed that customers who spend more time reviewing or complaining about their purchases have higher spending habit.  The amount of time they spend online to search for products is also higher.

Companies can really take advantage of these finding to generate their online marketing campaign and social commerce activities.  A marketing team who understands what customers like or dislike about a product could easily work with a product team or R&D to modify and suggest product updates.  Crowdsourcing provides data and information that allow business to do feasibility analysis based on user trends.

The Consumer Suite can work favorably toward business’s benefit.  The use of social media does have a huge impact on business’s product development strategies and initiatives.  Now that you understand social media could be helpful besides the purpose of marketing and branding, try digging through your online conversations with customers to engage social listening and social talking.  First off, here are 7 terrific ways to use social media for instant feedback.

21st Century Marketing – It’s No Longer Traditional

I urge you to take a moment to think about the times when there was no internet, no cell phones, no Facebook, no social networks, and no media tools.  My 20-something year old friends and I would probably have a panic attack because our lives would be too hard to handle.  It wouldn’t be the case for my 40-year-old uncle Joe who recently got promoted to be the Marketing Director at my grandpa’s family business, Black & Sons?  Sounds like some exciting news, but poor my uncle Joe Black – he is still struggling with getting new businesses and keeping up with things changing constantly on the internet?  In other words, is it true that Businesses still don’t ‘get’ social media – and it’s 40-year-old marketing directors that are to blame?

What does it mean to say that Uncle Joe doesn’t understand social media marketing?  It means he hasn’t converted from traditional marketing to social media marketing.  Marketing before the existence of social media involved billboards, word-of-mouth, lots of relationships and connections, and TV campaigns.  Social media marketing has reversed the model as the new marketing strategy.  The way business collect data and information nowadays is moving towards a much research-heavy and data-driven direction.  Effective marketing is a about lots of big data and analytics, which require solid analytical and quantitative skills from marketing managers – which perhaps my Uncle Joe is missing.


Social media marketing as the new marketing is proven to be incredibly effective and appealing to the public.  Companies that know how to use social media within boundaries have succeeded significantly in increasing the company’s popularity and sales.  For example, Mashable listed 5 companies with inbound marketing that works and 5 Brands that understand marketing on Instagram.

The growth and cost-effectiveness of social media marketing have been proven by company’s increase in bottom lines.  Social media marketing can also be used as a sales tool in both B2B and B2C markets. 45% of B2C markets and 86% of B2B find new businesses using social media.  Duke Fuqua School of Business‘s statistic suggest that both B2C and B2B marketers will increase significant spending on social marketing, from 8.4% to 11.5%, and to 21.6% by 2018.  In the mean time, traditional marketing is dropping below the ground level.

Social media is also used to tell stories, which makes social media such as TED and Youtube powerful tools for non-profit businesses.  Stories that are told for a cause are no doubt inspiring and influencing to a wide range of audience all over the world.  70% of Youtube traffic comes form outside of the US, among 43 countries and in 60 languages.

Social Media seems like the one and only way to reach the global market.  There is almost no brainer that we better get good at it.  To offer some help for my Uncle Joe, and a lot of us who may find it helpful, I am posting McKinsey’s article on Six Social-media Skills Every Leader Needs.