Why Asking About the ROI on Social Media is the Wrong Question

One of the many knowledgeable and articulate people I was privileged to meet and learn from recently at BlogWorld & New Media Expo is Jason Falls, director of social media for Louisville, Kentucky based brand-building agency Doe-Anderson.

Jason’s blog Social Media Explorer is a regular fund of information and fresh perspectives, as exemplified in his post last week on determining the return on investment (ROI) for social media.

The proposition he develops in that post is that:

The problem with trying to determine ROI for social media is you are trying to put numeric quantities around human interactions and conversations, which are not quantifiable.

And says further:

To illustrate that point for all our measurement and metric geeks out there, what you are trying to do is assign multiple choice scoring to an essay question. It’s not possible.

As a former high school teacher of English and History, often envying my math teacher colleagues when it came to assessing assignments and I was ploughing through a mountain of essays while my math colleagues zipped through their multiple choice, check the box, assignment returns, that analogy summed up for me very neatly the way I had been thinking about measuring the effectiveness of social media investment in the enterprise.

But precisely because I recognize that I approach such issues with the conditioning and biases of someone with a more liberal arts than mathematical/science background, I have frankly been somewhat unsure of my ground.

Was I being too readily and unreasonably dismissive of a more quantitative approach to measuring the effectiveness/ROI of social media?

After reading Jason’s post a couple of times now and watching the excellent, embedded video interview with Katie Delahaye Paine, I think not.

In fact, I feel much more comfortable now about the way I have been explaining these issues to people, especially about continuing to frame or re-frame questions about effectiveness in terms of conversation.

I don’t mean that in any smug, self-satisfied way. There is a lot more to be discussed about the issue of assessing – as distinct (I would say) from measuring – the effectiveness/ROI of social media investment. And especially about how to communicate effectively about these issues with clients, many of whom will present as being much more comfortable with numerical assessments.

Which could be a difficult call, especially if you accept Jason’s contention that “every session on measuring ROI in social media is a waste of time”.

The stream of comments Jason’s post has attracted, still going some five days later, suggests that the issues are by no means clearcut, at least on the level of practical application of the principles espoused.

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6 thoughts on “Why Asking About the ROI on Social Media is the Wrong Question”

  1. Humble thanks, Mr. Walsh, for the post and the compliments. I’m glad my entries make folks think and am happy to have reaffirmed your comfort level with your own theories on measurement.

    Clearly, as you state, nothing here is clear cut. My hope is to push the conversation so we might get closer to clarity. To further prove my point a bit, however, it is my contention you cannot put a numeric value on a conversation. Those human interactions don’t always lead to a sale, sometimes do and often lead to an awareness and third party pass on that may or may not equate into money for the brand. My argument has a hint of saying singular human interactions are priceless. The fact we are having this conversation — Jason and Des — is something I wouldn’t put a value on. It is, as they say, priceless.

    Thank you for your leadership of thought and action. I’m humbled to be part of a discussion with you.

  2. Katie Delahaye Paine

    Thanks for the shout out. I too admire Jason and the conversation he started. But as someone who has been analyzing conversations for 22 years, I must take exception to your comparison of this debate and grading English papers and Math papers. In fact, decades of academic research have contributed to the very specific metrics that are currently in use and that make it very easy for firms such as mine to assess the value of a conversation. Detailed coding instructions can be provided that make it much more like a multiple choice test than an essay. Then of course, its up to the organization to translate that into ROI. But rest assured Des, we’ve made conversations alot easier to measure than when you had to grade those English papers.

  3. Thanks Katie
    You are welcome to take exception to my comparison. Doesn’t that mean you are also taking exception to Jason’s comparison? “To illustrate that point for all our measurement and metric geeks out there, what you are trying to do is assign multiple choice scoring to an essay question. It’s not possible.” What am I missing here?

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