What Is The ROI For Social Media?

I spent a good portion of Sunday and Monday thinking about social media measurement and proving return on investment or ROI. Many of the sessions at PRSA International in Detroit were about social media, web-based communications strategies and the requisite question of how do we report success. Fortunately for PRSA (Public Relations Society of America), Katie Delahaye Paine was on hand to present and share her considerable expertise in the subject.

I attended both a roundtable discussion session, one component of which was a talk with Katie (I reported it for PRSA’s blog) and a session called, “How to derive ROI from Interactive Communication,” presented by Joanne Puckett of Ketchum. The confluence of all the thought, which I’ve outlined some salient points from below, really led me to one clear thought:

The problem with trying to determine ROI for social media is you are trying to put numeric quantities around human interactions and conversations, which are not quantifiable.

To illustrate that point for all our measurement and metric geeks out there, what you are trying to do is assign multiple choice scoring to an essay question. It’s not possible.

Katie hit the nail on the head near the end of her round table discussion when she said, “Ultimately, the key question to ask when measuring engagement is, ‘Are we getting what we want out of the conversation?'” And, as stubborn as it sounds Mr. CEO, you don’t get money out of a conversation.

To further the discussion a bit, I sat down with Katie for an episode of SME-TV:

What Katie evangelized a bit in her session was that the conversation (comments on your content) was the best measure of a level of engagement. Avinash Kaushik says much of the same in his discussions on web analytics. This isn’t an end-around the need for ROI, it’s the answer. Or at least a big part of the answer.

(Side note – Provided this is true, isn’t it sad that most companies haven’t even upgraded the technology used on their websites to enable commenting and conversation. Of course, it’s even more sad that if they had the technology right, they’re still afraid to use it. I digress.)

When you ask businesses why they are participating in social media, what do they say? If they say, “to make money,” then they will fail because currency in the social web is found in both relationships and content. If they say, “to grow our business,” they’re just saying, “to make money,” in a nicer way. If they say, “to participate in the conversation,” which is the more appropriate reason to be involved in the social web, then why on earth would they not measure success by the value of the conversations they have?

This is why every session on measuring ROI in social media is a waste of time. None of the measurement experts are going to make that point and that point alone because without throwing page views and unique visitors and number of subscribers and sentiment and tone, they have nothing to offer. Puckett actually said in her presentation that there are three types of results in interactive measurement: outputs (impressions, share of voice, tone, etc.); outcomes (attitude shift, behavior change, expanding reach); and business results.

She said about business results, “We haven’t figured that part out yet.”

And they’re not going to. And neither are any of us unless we start looking at the results in relation to the goals.

If your goal is to participate in the conversation, to enhance your relationship with your audiences and become a trusted member of the community that surrounds your brand, then your measures should prove you’ve done those things. Your ROI is what you got out of the conversation, not what you got out of their checkbook.

Do social media thinkers and measurement mavens owe businesses more than that? If so, how would you draw the line between having a conversation and making your monthly spend look reasonable to the boss? Push back, now more than ever, is welcome. The comments are yours.