ROI in social media is a luxury. And the only brands that can accept that are likely to be big ones with multi-platform marketing budgets. The larger the brand, the more likely they are to use social media without concerning themselves with its dollar ROI, when goodwill for them, is priceless. With mid-level brands the debate becomes more acute because the marketing budget is more thinly spread. And as for small brands, there’s no debate at all. For the most part, all they have is social media – so ROI is a matter of hope rather than measurable statistics.
Understanding this equation goes to the very heart of modern marketing, not merely within social media but across the entire spectrum of marketing disciplines.
Part of the conundrum is rooted in the inherent contradictions of the Internet and its technology. On the one hand, Web technology has provided us with an almost obsessive level of measurability – metrics of just about every variable one can imagine are instantly available. On the other, the Internet is a vast, free flowing fish-pond where hundreds of millions of people swim and bob around from place to place, connecting, communicating, and moving on. Measuring that part of the process isn’t just dicey, it’s a recipe for insanity.
Bridging Both Sides of the Internet Experience
The answer is simpler than most people think. Find a way to measure and assess marketing responses that’s right for the channel you’re using – and stick with it.
If you’re using banner advertising (how wonderfully old-fashioned of you!) CPC, eCPM, and CPS are your bread and butter. The ROI – while still imprecise – is at its core at least – numerical. And if it’s numerical, the ebbs and flows of sales can be measured with some degree of accuracy against your spend. How much of advertising ROI is art rather than science is a matter for debate, but there’s enough vaguely convincing science in play to reassure executives.
Partially because “social media” means a great many things, it’s far more difficult to create a reliable attribution model.
Social media – at least today – is often more art than science. At best the science is the pseudo-science of persuasion and engagement – concepts that don’t sit well with the empiricists who want proof of everything, all the time.
Let’s look at how companies of various sizes and budgetary realities look at this quandary.