Social Media; Influence, Engagement and the Elusive ROI

‘It’s funny.  All you have to do is say something nobody understands and they’ll do practically anything you want them to’.  ~ Holden Caulfield, The Catcher in the Rye

So this tweet from John Lovett (@johnlovett) caught my attention last week:

John Lovett Tweets

Having been flooded with Black Friday and Cyber Monday sales figures, my first thought was how small that $7M sounded compared to the $1.25B that was spent online that day. How small? Well .56% small. I thought it was curious that John would trumpet a number that frankly was about equal to the Cyber Monday sales that were influenced by my Mom’s bridge league. Being the sumbitch I am I responded:

Dean's Response to John Lovett

(Note: I'm patenting #WhoopDeeFrigginDo” so don’t get any wise ideas about stealing it)

The rest of the conversation went something like this…

A Twitter debate between Dean and John Lovett
A Twitter debate between Dean and John Lovett
The response this seemingly benign tweet started, prompted this blog post from John: Counting ROI in Pennies with Social Media, which deferred to the tired explanation that has always been given regarding social media and revenue – “It’s a method to engage with people on a meaningful level and to allow them to engage with one another.” Swear to God if I hear another “It’s not about the money. It’s about engagement”, I’m gonna stab myself in the ear with a fork. To me this explanation roughly translates to “Revenue? Oh this social media shit doesn’t drive revenue, but it’s a lot more fun than that other Marketing bullshit we do, and it’s the best explanation we got to keep doing it.”
Listen, I get it, social media is about connecting and engaging “on a meaningful level” (whatever the Hell that means). I’ve been at the Marketing rodeo long enough to understand and appreciate that there are many arrows in the Marketing quiver and each serves its own purpose, but I take you back to the tweet that started this whole thing…

John Lovett Tweets
It didn’t start with a debate about the role of social media; it started with a statement about its contribution to sales, I.E. $$$$. My less than enthusiastic response spoke to a fairly pitiful contribution.
But here’s my point (and it echoes John’s when he speaks about outcomes). If social media is going to be accepted as a legitimate business tool, it will eventually have to measure its value to the organization. If it’s not through revenue (assisted or direct) then it has to be by some other measurable criteria. Give me something a little more concrete that “It’s about engagement”, you know, something I can put on an excel spreadsheet.
It was John’s own colleague, Jim Sterne (@JimSterne), who wrote in ‘Social Media Metrics: How to Measure and Optimize Your Marketing Investment’ that there are only three true business goals: Increasing revenue, lowering costs, and increasing customer satisfaction. At the risk of putting words in Jim’s mouth, everything else is bullshit. Interestingly, each one of those business goals can be measured and some of those metrics have nothing to do with dollars.
So Social Media folks, what’s it gonna be? Are you gonna hang on to this ‘engagement’ rouse you been feeding the boss, or are you going to put your analytic mouth where your engagement money is and identify some measurable outcomes that deliver true (and measurable) value to the organization.
I’d suggest the latter, because as a marketing guy with a few miles on his tires, I can tell you that when times get tough, the people shown the door first are the ones delivering ‘engagement’ not the ones delivering Benjamins. Be brave, identify some outcomes for your Social Media efforts, and measure the crap out of it. You might find that you can deliver more than just engagement.
There, I said it, I’m glad.

About DeanShaw

Cutting Through the Bullshit So You Don't Have To

Posted on December 18, 2011, in Social Media, Web Analytics and tagged , , , . Bookmark the permalink. 4 Comments.

  1. Dean

    I hate it when I can’t figure out where guests stand on an issue like this!

    That number sure was paltry. I do give Lovett credit that he told the truth though. He had to have been since that number was virtually inconsequential compared to the total. He could have lied and said something like 3 or 5 percent which would still be low but not embarrassimgly low like. 56%

    Anyway, keep pointing this out because it’s important that some kernel of truthbe known in the flood of “social media will save the world” talk that makes everyone forget about common sense and logic.

  2. Frank –

    Wait til next year when the number is $15M and they start saying “Cyber Monday Sales influenced by social media increased by a whopping 114%!!!!!” I’m not trying to bash social media or its ability to influence, but .56% is .56%. Let’s just say it’s influence was inconsequential and call it a night.

    Thanks for weighing in!

  3. Seeing as how you invoked my name and as how John Lovett is a personal friend of mine and how I am on the verge of participating in the Dean Shaw 2012 Twitter Madness Tournament, I am so conflicted that I can only throw a pox on both your houses.

    Engagement matters. By itself, it is indeed made up of those words that were foisted into my mouth by our right honorable host. However, as a function of branding, which is a function of customer and prospect satisfaction, it is a function of persuasion and without persuasion there ain’t no Benjamins.

    So you’re all wrong. Which is to say you’re all correct.

    This is the same conversation we had 15 years ago about the Web. No, it’s not a big number. But at least somebody found it worth measuring and next year it *will* be a much bigger number. And eventually everybody will claim to have recognized it’s true worth before Clay Sharky was a glint in his father’s eye.

    Reminds me of the never ending wrangling about creative versus analytical. For the love of Vint Cerf can’t we just agree that there is no black and white and only shades of gray?

    It must be dinner time – I’m getting cranky.

    Get off my lawn!

    • Jim – I don’t know much about ‘pox’ but I do know that I’m in charge of ‘cranky’ around here so go work the other side of the street will ya

      As far as social media is concerned, I’ll stand by my belief that if its digital, it can (and should) be measured. As a web analyst, its hurts my heart when I hear social folks say “Social media isn’t about $$$, its about engagement” and as such isn’t subject to the same rigorous tracking we do with other online efforts. Its a cop-out that remind me of Avinash’s theory of offline marketing being a “faith-based initiative”. They say “Let us tweet, Facebook, and pin and don’t worry about the numbers, we’re developing relationships here that will pay off down the road – trust us” That’s all great but in the meantime let’s measure some baseline KPIs so we can follow you efforts along this path and look for ways to optimize the process.

      I’m not saying a .56% influence on Cyber Monday sales is good or bad. I am just saying that next year when it’s 1.23% lets have some measurement in place so we can understand what bent the needle in that direction, then do more of what worked and less of what didn’t.

      For more eloquent explanations of my stance check these posts out:

      The ROI of Social Media
      The social media measurement smackdown

      Thanks for stopping by and straitening me out. I heart you for that😉

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