Making business sense of social media ROI


Olivier Blanchard is perhaps the most sought-after expert for those looking to connect the dots between social media and ROI (return-on-investment). This is an interview from SmartBlog on Social Media.

The chatter around ROI seems to be as loud as ever. What would you attribute this to? Are we at a pivotal moment for business proving value for social media activities?

The chatter around social media marketing ROI is as strong as ever for two reasons: the first is simply because ROI points to one of the most important questions an organisation can ask before green-lighting a social media programme: I could spend this budget somewhere else — why should I spend it on social media? Before any other questions can be asked, you have to start with “why”.

The second is that most social media “experts” seem incapable of:

a) being able to define ROI … and

b) plug social media into a profit-and-loss statement and actual business objectives.

Most social media marketers, having no true management background, simply don’t understand how to tie social media measurement and performance to business measurement and performance. This lack of business management experience is a major problem in a field where everyone seems to have become an “expert” overnight.

Olivier Blanchard, Principal at BrandBuilder Marketing, Principal at BrandBuilder Marketing, a Greenville-based Brand Consulting and Marketing Management firm

Olivier Blanchard, Principal at BrandBuilder Marketing

As long as these so called “experts” fail to answer the ROI question, the chatter will continue. Ironically, the question can be answered in about three minutes. All it takes is someone on the social media side of the table who understands how to plug new communications into a business from the board’s perspective.

Have you noticed a recurring point where businesses and organisations decide to get serious about applying ROI to social activities? Is it based on experience, resources allocated or both?

Every organisation is different. Some want to establish upfront measurement practices that include ROI from the very start. These are organisations with a specific focus or clear goals. ROI is based on accomplishing those goals. The programme won’t get the go-ahead until every “t” has been crossed.

Others don’t get around to asking about ROI until six to 18 months after a programme has begun and budgets need to be reviewed. Trust me, when 10% of your group’s budget is being cut, you start asking hard questions. Social media programmes not clearly in support of specific business objectives had better come up with a good answer when the budget hatchet starts to come down.

Typically, companies that start by identifying ROI before a social media marketing budget is assigned, people are recruited and the project is even outlined, fare better than their counterparts.

How can those who are in the trenches, but not selling product or services themselves, best justify their social efforts/hours to their bosses and peers?

By aligning their activities and objectives with key business objectives. The fastest way to ensure that your budget is renewed or validated is to show that you play a part in making the P&L positive.

Perhaps your group saves the organisation money by using social media. Customer service is an example.

Media buying, reach, could also show some interesting cost reductions, with social media increasing reach while reducing relative cost-per-impression. Perhaps your group generates not sales but leads by using social-media channels in interesting ways. There are dozens upon dozens of ways to ensure that your programme can be shown to contribute to either reducing costs or generating revenue. What you don’t want to be is a “cost centre” alone, or worse yet, the project team that can’t articulate its value to the organisation. Which happens.

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About Jeremy
Digital marketing leader, blogger and speaker. Married with three adult children. Likes activities and sport not affected by weather.

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