Social Media ROI

So what? if,

"People are talking about your brand"

"You have a dashboard which shows pretty red, yellow, and green graphs"

"You've just paid a celebrity to tweet about You" 

Do any of these things drive sales for the brand? Maybe. Maybe not. Most likely there is simply no way to tell. This is because there isn't a metric or a series of metrics which can directly and accurately correlate social media actions to sales.

However, there are a few good examples where marketing activities in social networks can drive quantifiable value. For example, Dell has built up a following on Twitter over time so it can now tweet last minute deals and clear out unsold outlet inventory very efficiently. Netflix has built up a large fan base on Facebook and uses it to interact with fans, get feedback, and announce new features or content. JetBlue and Best Buy use Twitter for customer service and have thus built up a large enough following to use Twitter as a launch or awareness channel which is free, compared to other channels like e-mail or direct marketing.

The value derived from the above examples is replacement value - in other words, it can sufficiently and efficiently replace traditional, costly tactics such as market research, direct marketing, e-mail marketing, etc.

Let's dig a little deeper. The "social media marketing" craze of today is really the same as the "word of mouth marketing" craze of a few years ago. There are wrong ways of generating buzz; there are right ways of attracting buzz; and sometimes buzz is generated accidentally - for better or for worse. Word of mouth cannot be purchased or faked; it will be found out. Social media also cannot be controlled; people won't necessarily talk about the product the way the advertiser wants the product or brand to be talked about; and they certainly won't use "on brand" terminology, etc. Perception of the product or brand is ever more important because of its lasting effect in social media.

So how do we get at the ROI of social media?

Social marketing is not marketing - instead it is listening and learning from customers' genuine conversation among peers and earning the right to be part of the conversation by providing value and earning customers' trust. Companies should think of the longer-term "total value of ownership" for social media. Examples of the social media assets that are "owned" after longer-term investment may include fan pages on Facebook, followers on Twitter earned over time, collections of videos on YouTube, etc.

The return on these assets is derived over time and may not be attributable to any one marketing campaign. The ROI derived from these assets will come in the form of replacement value (e.g., you can tweet your launch announcements instead of paying for e-mail and direct marketing) and lasting value (e.g., customer reviews and candid discussions about a brand or product can live on in social media and benefit future potential customers when they go online to search, at no additional cost to the advertiser). 

Because the return is derived over time and is not easily attributable to any particular marketing campaign, social media should be thought of and executed at the corporate level - e.g., via corporate marketing - as opposed to brand marketing, which has a short-term view and specific revenue goals.

Nestle's Facebook Page: How a Company Can Really Screw Up Social Media

Like the Force, Facebook can be a powerful ally — but beware the Dark Side. This is a tale of how a big company can land itself in a PR nightmare in a matter of minutes, all thanks to the power of social media.

About 10 hours ago, Chocolate-maker Nestle posted a seemingly innocent request on its Facebook page: "Nestle fans, don’t use an altered version of the company’s logo as your profile pic, or your comments will be deleted".

The reaction from more than a few followers: "Don’t tell us what to do, Big Brother! 
Nestle’s response: "The logo is our intellectual property. This is our page, we set the rules. You don’t like it? There’s the door".

In other words, whoever mans Nestle’s Facebook page went on the offensive, responding to individual posters in a tone that was at times sarcastic or antagonistic. Here’s an exchange that pretty much sums it up:

The problem here isn’t the way Nestle is trying to police its Facebook page, though I think it’s important that PR people recognize that an altered company logo is a compliment (and a very common online practice), not intellectual-property theft.

The problem, obviously, is Nestle’s response to people who didn’t like the initial statement. It’s PR 101: Don’t insult your customers! And in PR 2010, mind your manners in public forums — especially those expressly created for fans of your company! It may be true that there’s no such thing as bad press, but there’s definitely bad social networking — and this is a prime example.

Any company that maintains a Facebook page should learn from Nestle’s mistake. In the meantime, it’ll be interesting to see how the company responds once the higher-ups get wind of what’s happened.


What’s your take? Did Nestle screw up, or was the company right to assert its IP rights? Share your thoughts in the comments.

A Short Documentary on Google

We think of Google as a search engine but they are an advertising company. This short documentary on Google will give you a good idea of what Google is trying to do and how the different pieces fit together.

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"They want to own the cables that deliver the Internet and also the electricity to power them."

Not every number or statistic that you see in the movie may be true but it is still a good recap of Google’s constantly growing list of products and features.

The movie originally aired on Australian TV show – Hungary Beast.
post appeared in digital inspiration.

Golden Rules of Social Media in 2010

As 2010 opens its doors, I wanted to take a look at my "Golden Rules of Social Media" to see if I could consolidate those rules into 3 or 4 actions we can take to work better in social media in the coming year.

So, here is how I'd consolidated those rules to the fundamental ideas about how we should be using social media tools and platforms in 2010:





Listen. The best way to start your journey in social networks and other social media platforms is to listen. Listen to the conversations already happening around you before you jump in to join them. Listen to the rhythm of discourse. Listen to the stream to make sure you understand. You will surely misstep if you do not listen.

Add Value. The term "value" is subjective, but once you have truly listened, you will be able to discern with relative certainty what is valuable to any given conversation or community. Can you add value to the conversation, not just an empty voice? Can you be a resource? A supporter? A cheerleader? An organizer? 
What is your social media value proposition?

Respond. If you are listening, you will hear when someone says something that begs your attention. You will hear when someone references you. You now have a door to enter the conversation. And if you'e listened thoughtfully and have something valuable to share, your participation will be welcome.

Be Real. Be yourself. Even if you are representing a company or brand and are using the "voice of the company" or "voice of the brand," you can still be human. Yes there is a time and place for automating a message, but learn when that’s appropriate. Be present. Be there. 





I hope you'll like these rules and will surely apply them in your social media engagement '10.


I would also like to invite you to consolidate your thought and put your most powerful social media lesson you've learned in 2009 that can be good advice to others!!