ROI for social media: the human measure
By courtney in Other on July 12, 2010
“Return on investment for social media activities”. It’s not a sexy phrase, but it’s one I’ve been pondering hard as I prepare for a National Services Te Paerangi workshop I’m running later this month in Westport (here are some notes on the first running workshop, held here in Wellington).
The workshops are targeted at the GLAMs sector (galleries, libraries, archives and museums) and the people attending often come from quite small or even volunteer organisations. One of the interesting discussions we had in the first workshop was around measuring ROI (return on investment) for the social media activities.
ROI is the ratio of money made or lost on an investment, relative to the amount of money invested. It’s expressed as ROI = (X – Y) / Y, where Y is the investment, and X the final value. A good ROI might look like initially investing $100 and having a final value of $150: that’s a 50% ROI (a 50% profit). A bad one might might look like this: a $100 initial investment and a $0 final value; that’s a ROI of -100% (a 100% loss). This presentation by Oliver Blanchard gives a good overview of how this formula can be applied in a meaningful way to businesses’ social media activities, especially in terms of measuring whether there’s a link between activity and increased sales revenue.
I often struggle with the applying this idea of ROI to GLAMs activities. Firstly, for these organisations it’s rarely about investing hard money. Galleries and museums and the like are not diverting cash in their marketing budget away from one form of advertising and into social media. Instead, they’re reallocating their staffs’ or volunteers’ time and energy. Secondly, benchmarks are rarely in place to make comparisons between social media activities and other promotional activities, such as print advertising.
This is not a reason not to think about the return on effort, rather than pure cash, expended. In fact, one of the best reasons to think about measuring ROI at the start of a social media project is that it helps you clarify what you’re doing and why. I think the time of people rushing, lemming-like, towards the latest tool has passed: now when I talk to people in cultural organisations who are starting or running social media channels, they’re more reflective about who they’re trying to reach, what content they’re wanting to share, and what outcomes they’re trying to achieve. Figuring out ‘what success looks like’ is an important part of the planning process.
There are all sorts of tools out there that can help you measure some kind of ROI, beyond the simplistic follower counts and page views. This Altimeter report gives a good overview of social marketing analytics, and this Mashable post gives a good overview of tools (most better suited to large organisations, to be fair).
Of course, there are all sorts of outcomes other than making money, and different ways to measure whether what you’re doing online is benefiting your organisation. For example, looking at your Facebook stats can help you learn more about the people who are interested in you, as Seb Chan shows. Posting collection items to Flickr might drive interest, enquiries and sales back to your website, as Paula Bray’s paper suggests. Simple tools like bit.ly help reveal how and where your content is spreading. Studying analytics can help you improve what your content and communication, as Beth Kanter blogs about her own Facebook activity. Setting up funnels in Google analytics could show if efforts to publicise exhibitions and events, or fundraising drives, are paying off.
However, after covering tools and ideas like these in my workshops, I usually end with a plea. And that’s for people to think about a human measure – one that captures the benefit for the people who are undertaking the work, who are usually doing this social media stuff on top of already full workloads, and who aren’t being repositioned as well-paid social media managers in order to do so.
When I was at the National Library of New Zealand I worked with the Services to Schools team to set up the Create Readers blog. When we surveyed the staff who were contributing to the blog, one of the things we found was they almost unanimously felt good about was having learned a new communication skill (only one or two contributors had blogged before) and mastered a previously foreign technology. This is still one of my favourite examples of return on investment.
There’s also a sense of pride and community that I don’t think should be undervalued. Most people don’t work in the GLAMs sector for the generous salaries and the stock options. They work in them because they believe in the social value of what they do, and often because they love the stuff they’re working with, be it books, paintings, or bird specimens. Having an opportunity to share the things you care about with other people who’re interested too? To quote Mastercard – that’s priceless. A tweet that gets re-tweeted by half a dozen people, a blog post that garners a bumper crop of comments, a photo on Flickr smothered in notes – that’s the kind of thing that makes your heart glow. As we look for new ways to motivate the people we work with – and ourselves – I think these kinds of measures have a very valid place within discussions of return on investment.