I’m F*cking Sick Of The “ROI Of Web 2.0″ Debate
I have a confession: I am f*cking sick of the “What’s the ROI of web 2.0 or social media” debate.
Not that I don’t think we shouldn’t talk about it – we should – but I’m sick of convincing everyone that there is one at all. If done correctly, you will see a return on investment. We can debate what the metrics should be, but you will succeed if you are open, honest, and provide something of value.
So can we stop talking about the ROI of web 2.0 tools as though it were an ephemeral mist?
I see a track-record of failure for the naysayers – those who prefer to sit on the sidelines while others take chances (and get the rewards). Here are a few examples from the naysayers:
- They didn’t understand the value of blogging platforms. “Who cares about all the navel-gazers?” That was until Jason Calacanis sold Weblogs Inc. to AOL for $25M in 2005.
- They didn’t understand the value of e-commerce. “No one’s going to give up their credit card information online!” These naysayers didn’t have much to say about Amazon.com’s $476M net income in 2007 though (source: Wikipedia).
- They didn’t understand the value of podcasting. “How does that relate to business?” I don’t think Gary Vaynerchuk worried about that though. He created WineLibraryTV.com and increased his business 10 fold to the tune of $45M per year.
- They didn’t understand the value of online word of mouth. “The 30-second spot is still king!” I can imagine their surprise when the marketing team at Warner Brothers told 7 rabid Harry Potter fans/bloggers about their new theme park. The result was 350M people hearing the news, all without out-bound media relations, marketing stunts, or expensive advertising (Source: The New Rules of Viral Marketing by David Meerman Scott).
- They didn’t understand the value of social networks. “Friendster never did me any good.” Then in September of 2007, Microsoft valued Facebook at $15B. With more than 50 million users and 200K joining every day, this doesn’t look like a fad.
- They didn’t understand the value of Second Life or other virtual worlds. “It’s just a bunch of weirdos with time to kill.” But engagement speaks for itself. The Weather Channel recently developed SL attractions that engage users for an average of 30 minutes per visit. Drew Stein, CEO of Involve 3D, builders of The Weather Channel’s virtual experience, had this to say: “It’s not like a commercial, where maybe they watched and maybe they didn’t. You’re talking about a user actually paying attention, and you can time it. That’s hard to replicate in any other medium” (Source: Fast Company).
So seriously, can we stop debating whether social media and web 2.0 tools have an ROI?
The question for your company is not if they have a return on investment, but how you can get that return on investment. That’s the challenge for your marketing team. And if they start whining about how unnecessary or unworthy web 2.0 is, prepare to join the other nay-sayers in the gutter of business.
I’m not the only one frustrated by the debate. Geoff Livingston explains why we keep going through it:
Often, companies want to know what they will get for $xxx,000 of social media engagement. What’s the ROI?!?!? And we play the game because we have to justify corporate expenditures in this era. But somewhere the soul of social media gets lost in these discussions.
From what I gather though, the audience of this blog is fairly split between marketers who get it and marketing folks and small business owners who want to get it. Today’s post is venting with the first group. In my next post, however, I will address the second group.
If you’re in the second group, you feel the wave approaching. You know social media tools are a big thing but you’re not quite sure how they apply to your business and how you sell it up the corporate food chain. That’s fine – welcome to the discussion and good for you for having the cajones to figure it out.
My next post will give you some ideas about how to think of social media in the context of your business and provide enough web 2.0 ROI for you to sell the idea to your boss. One good way not to miss it is to subscribe.
Update: That next post I mentioned can be viewed on ReadWriteWeb: 5 Ways To Sell Social Media To Your Boss.
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(Photo courtesy of JanThePic via Flickr)
Tags: Business, Facebook, Marketing, Online marketing, ROI, Social Media, Web 2.0
Free your mind and the money will follow…?
Love the concept, just don’t think it will fly. Corporations need to float budgets past dozens of people now, and with the economy so shady, those budgets are thinner and thinner everyday. This puts us, the social media teams, with the task of placing an ROI on a blog post or a comment or a Tweet. Its tough and sucks. We know its more vital that a dollar amount, but its no easy feat to accomplish.
Tools like Radian6 have made it easier to see ROI, but things like sales and leads are always better judges.
Awesome analysis. My question: “What’s the ROI of putting on your pants this morning?”
“Half of ‘social media campaigns’ will flop”
http://news.cnet.com/8301-13577_3-10058509-36.html
The article above really speaks to the fact that successful social media campaigns have to have strategy, be focused and not just use platforms such as Facebook and MySpace because of their popularity. It’s worth the quick read.
Uh, what’s the ROI on this post
At least a laugh for me!
Seems we’ve had to justify investment in every new evolution of interactive media.
Admittedly, there have been failures, but we can’t be afraid to fail. If the powers-that-be balk at case studies & analytics & are skeptic to a sense of urgency, it’s not without precedent.
For those folks, I suggest they gauge social media [experience, platform, campaign, etc] on whether or not it serves basic human need to relate, validate, listen, speak. We are creatures called to community.
Otherwise, fallback to the old awareness, extension, impression paradigms.
Good post.
http://twitter.com/shannonswenson
Peter, Geoff, and David – Heh, thanks for the comments. I’m honored that you stopped by.
Adriana – Thanks for that article. I think you’re correct that most fail because they just don’t have a strategy behind the effort. I was talking to someone just last night about the need for client education, but we can’t forget boss education as well
Shannon and Greg – We will still need to justify expenditures, sure. But I’d love for us to move away from impressions and speak more about solutions. I can’t imagine that Frank at @ComcastCares talks about the positive brand impressions – rather, he talks about all the people he’s helped. These metrics provide a far more telling ROI, in my opinion.
Yes, re: impressions, we’re in agreement, I was being facetious
Emphasize qual over quan, even if it’s harder to measure (aka higher investment).
Great post and discussion. Tracking ROI can be illusive at best with many types of initiatives (not just social marketing). Makes me think — maybe we should really be talking ROO instead.
But hey, if I can’t show my company why what I’m doing is important — than I’ve just made my job expendable.
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Great post. The only thing about social media is that ROI is not easily measurable since social media is a very fragmented playing field. When a company engages in social media, they have to look at themselves first (their image, brand, relationships) before moving into social media marketing.
I’ll keep an eye on your blog
Cheers,
Reinhardt
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I suggest they gauge social media [experience, platform, campaign, etc] on whether or not it serves basic human need to relate, validate, listen, speak. We are creatures called to community.
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Andrew
Link Building
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