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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Social Media – The Bad & The Ugly

Social media’s trend is no doubt only going upwards in our business environment nowadays.  However it is important to keep in mind that it is a very effective tool that could turn into a disaster if used without care.  There are many companies that have failed because of the lack of sophistication and understanding of the bad and the ugly of social media.  There are also cases that social media do more harm than good to the company.

Brand disasters caused by viral network

Facebook effect was the reason Subway got sued for their less-than-12-inch foot-long sub.  In 2012, there is a list of biggest brand disasters from well-known companies such as Fedex, McDonald’s, D&G going around the internet.  These brand disasters are caused by social media and how powerfully it could influence the network.  This is when social media creates an ugly network effect; and companies reputation could get damaged a second after somebody spreads the ugly information only.

On December 19th, 2011, a FedEx customer caught a FedEx employee on camera throwing a brand-new and expensive TV over the gate, instead of ringing the bell to find out if anybody is home.  The number of views grows exponentially.

Screen Shot 2013-05-02 at 11.34.48 AMWith the extremely fast growth of social media’s influence, FedEx, maybe 3 days too late, handled the situation with the following response:

How effective is this solution?  If right now while I am writing this post, May 2nd, 2012, the total number of views is almost 9 million.  And the most recent comment posted on this video is 2 months ago.  Apparently, only crisis such as this incident could damage a company’s brand significantly and for a long time.  On the internet and through social media, almost nothing is private and retrievable.

Online demand generation and wrongful information could impact sales and bottom line

How companies use social media as a marketing tool determines their reach and target audience.  External marketplace has evolved much faster than what businesses can integrate social media into their models.  The challenge here is how to generate demand using social media, while keeping up with the rapid changes social media causes in consumer perception, hence, demand generation.

The challenge here is to determine how far we should rely on social media.  Gen Y is the early adopters and tech-savvy folks that drive heavy traffic on social media sites.  Teen spending has been increasing since Spring 2012, and they prefer to shop in-store rather than online.  The importance of social media on their shopping habit is also decreasing.  This puzzles business because while moving a lot of their marketing forces only, how are businesses going to deal with such phenomenon?  Finding the balance and finding how far to take social media are challenging marketers.

The ugly of getting demand generation wrong could be wasted resources.  Though social media is a cheap way to market, it could make company become disoriented in their marketing segmentation strategy.  For example, Pizza Hut pushes their products beyond public interest, resulting in negative publicity.  In the end, companies are not able to accomplish anything from using the tool.  Rather, social media efforts backfire, resulting in decreased sales and bottom line.

Companies that are not understanding how their customers use social media could easily fail in their social media marketing campaign.  For example, if the company keeps pushing promotions and discounts to the wrong target audience, which results in negative impacts on consumer’s likelihood to purchase from the company.  According to J.D. Power and Associates Reports: Poor Social Media Practices can Negatively Impact a Businesses’ Bottom Line and Brand Image, among highly-satisfied consumers (satisfaction scores of 951 and higher on a 1,000-point scale), 87 percent indicate that the online social interaction with the company “positively impacted” their likelihood to purchase from that company. Conversely, among consumers who are less satisfied (scores less than 500), one in 10 consumers indicate that the interaction “negatively impacted” their likelihood to purchase from the company.

The battle for attention driven by social media is a great challenge for business and it could negatively impact on businesses.  To follow up with my previous post on social media and emergency management, here is an article to stress the flip side of the story: Four Ways The Media Failed In Covering The Boston Bombings, And One Reason Why.  Moreover, these four ways apply to anybody or any business that uses social media.  The growth of social media is comparable to a contagious virus.  The question is: social media is a race, who will be able to keep up?  It probably depends on how we can avoid the bad virus and keep the good one.

P.S. I assume that you all are looking for jobs as MBA students (I hope?!?!)  Then you should read this article on How Social Media Can Help (Or Hurt) You In Your Job Search.  It’s almost a MUST to use social media for your search, just try to avoid things getting ugly.

Emergency: Social Media in Action

My thoughts are with Boston tonight.  The marathon explosion took away 3 lives and injured more than 100 people.  Not only the city of Boston but also everyone around the entire nation is going through the chaos to rescue and help out victims.  The media has been on the roll to provide updates on news, stories, and government’s responses.  Google has generated at 412,000,000 results within 0.23 seconds with keyword search ‘boston marathon explosion’, by 10PM on the day of the event, April 8th, 2013.

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More importantly, there are also resources integrated by social media as emergency respond activities. NBC News published an article, Boston Bombing Aftermath: How You Can Help, giving tips to families and friends to get involved and to initiate help to the victims.  The most impressive tools are Google’s idea on gathering information of people who have a place to offer and of people who need a place to stay.  The first person to fill out the Google form started at and every 5 seconds comes a new entry.  There are also individualized the information with section ‘Other info’.

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The affect of social media in emergency is indeed very powerful.  Besides the good deeds and how much social media can be helpful in responding to crisis, it could be a useful marketing and emergency management tool for non-profit organization such as American Red Cross, Maryland Emergency Management AgencyFederal Emergency Management Agency, hospitals etc.  American Red Cross comes up with mobile apps to motivate people to prepare during emergency and crisis, by providing information, useful tools and a way to let loved ones know they are safe.

The benefits of social media in emergency management essentially are considered strategic marketing and communications tool for private philanthropy, foundations, and corporations.  Generally speaking, social media provide an enormous package of benefit to non-profit businesses/organizations.  It also changes the way non-profit works.  To list a few:

  1. Improve operation efficiency and capacity in services, including responding to crisis and recovery and rebuilding after crisis (Hurricane Sandy: Red Cross, Other Relief Organizations See Social Media As ‘Double-Edged Sword’ For Relief Efforts).  This benefit essentially improve coordination with other businesses such as healthcare services, utilities such as gas, water, electricity, media and communication, etc.)
  2. Fundraising through online social media campaigns.
  3. Volunteer recruitment and team building (How to Help Boston Marathon Victims).
  4. Online collaboration tools such as FEMA’s Collaboration Community where people can exchange ideas of what to do in responding to emergency.  This enhance emergence preparedness.
  5. Effective communication method with stakeholders, victims, decision makers, etc. which improve control and support faster service and broader engagement.  With Dell’s support, Red Cross utilizes Social Media Command Center right after a disaster in order to find survivors who desperately need help.  It is a two-way communication between the general public and these emergency response organizations.  It is a method of crowd-sourcing.

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.

Social Media As Collaboration Tools

Screen Shot 2013-04-07 at 2.05.33 PMPeople from around the globe, more than ever, find social media becoming a hug impact on their lives and the way they run business.  In the business setting, social media has forever changed the way we work.  Moreover, companies have utilized social media to increase efficiency and collaboration at the work place.  The economic value is shared among employees, executives, and other stakeholders.  Great ideas are formed as a result of departments and employees being able to connect and have meaningful conversations in a timely fashion. Social media has created a new generation called Generation-C (connected, computerized, and community-oriented).  These collaboration networks allow brain-storming activities, idea sharing, problem solving not only among employees at work but also among companies and vendors, suppliers, customers, etc.  These social networks add promising values to the business world.

There are various forms of social media and collaboration tools used by companies.  The rise of Intranet 2.0 has added social media, including social networking, blogs, instant messaging, wikis, RSS, and discussion forums, into the evolutionary path of the social intranet.  Social media Intranet 2.0 has become powerful tools for business collaboration.  It is no longer just business marketing, but it acts as vehicles for employees to share knowledge and ideas.  Tools such as Google Docs and Drop Box allows much faster delivery of documents and allows multiple users to shares and edits documents at the same time.

Companies have made a large amount of investment in social collaboration software, which is predicted to grow into a $6.4 billion market in 2016, compared with $600 million last year.  Social collaboration software refers to social media type of platform, allowing Unified Communications and Collaboration (UC&C) solutions including unified messaging, videoconferencing, advanced telephony, etc.  Jacob Morgan cites in his book, “The Collaborative Organization” that business performance could increase by 36% by utilizing social collaboration software.

“Our clients indicate that employees are better informed with Jam and strongly prefer blogs and video over email. Greater employee engagement has been shown by higher scores in areas such as collaborative environment, availability of learning and leader visibility. And some clients have realized a savings up to $500,000 because of other systems and processes they’ve been able to eliminate.”

McKinsey Global Institute reports that social technologies could raise the productivity of interaction workers by 20 to 25%.  People are more productive and motivated when they are given convenient tools and some freedom and work place.  Social media platforms such as Facebook, Twitter, and LinkedIn have become valuable resources for information and connections.  Although the topic of employees SHOULD Facebook or SHOULD NOT Facebook at work remains controversial, 92% employers have been using or planning to use social media as a recruiting tool and search for talents.

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Social collaboration is also a great tool used by independent workers.  Independent Workforce rises by nearly a million workers in 2012, with worker satisfaction rate at 86%.  Interestingly, the report shows that the highest percentage of independent workforces is made up of the baby bloomers, followed by Generation X.  This proves that not only the younger generations are adapting quickly to social media as a valuable business tool.  Social tools could also motivate workers to work independently and virtually.  This provides employees a culture of freedom to work remotely and extend the social circle regardless of different age groups, demographics, locations, etc.

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There are obviously many advantages of using social media and collaboration tools to increase business productivity and efficiency.  It is often easy for us to see the advantages of something we love so much.  Besides the internal benefits that social media provides to business, are there any disadvantages of social media as collaboration tool?

  1. Conflicts in working style: While with social collaboration tools, companies are employing better division of labor, there is also possible conflicts in working style among employees.  This could create hold-ups on progressing the work.  This could also delay decision making because people have different way to approach and prioritize work.
  2. Too many leaders: The advantage of sharing ideas and inputs could bring miscommunication.  Too many people will try to take ownership of the collaborative work.  As a result, creates tension among team members.  This is where too much freedom in the workplace could make it difficult to manage.

There are also a few other challenges that companies are facing in order to fully integrate social media in practicing business.  A couple of them are:

  1. Potential costs as social network grows?
  2. Security of company’s information? Employee privacy?

Let’s explore the bag and the ugly of social media as collaboration tools in later posts.

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.