The Social Media Measurement Smackdown

I was recently involved in what one tweeter characterized as an “ROI smackdown.”

I was speaking on a panel for Social Media Week New York when one of my fellow panelists said “This ROI stuff is just a bunch of crap. I’m so tired of it. You can’t measure what you’re doing and people should not even try.”

I began to twitch.

“I agree,” said the second panelist. “Too much focus is placed on measurement.”

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My head began to throb.

“As a social media marketer, I can’t measure what I do,” said the moderator. “I just do it.”

At that point, the dam broke.

“Respectfully,” I began, “I disagree with everything that has just been said! As marketers we should measure EVERYTHING. And generally, we can.”

And it kind of went downhill from there. This dialogue is nothing new. It is merely a symptom of an anti-measurement bias creeping into the blogosphere.

The gurus aren’t helping.

Unfortunately, the tone is being set by some of our most beloved social media celebrities such as Gary Vaynerchuk, David Meerman Scott and other high-profile pundits. When Gary is asked about the ROI of social media his famous reply is usually ‘Well, what’s the ROI of your mother?” Scott’s retort is usually something like “Why have a double standard? You don’t measure the ROI of the company receptionist.”

These make great sound bites, and I sincerely respect these fellas and love the passion and wisdom they bring to their work. But after hearing their rants on measurement for a couple of years now, I am agitated to the point of breaking out in hives when I hear it. Promoting an anti-measurement agenda is misguided and confusing to young marketers.

First, in their defense, I think the point they are trying to make is that social media represents an evolution in the way we communicate and we shouldn’t let an ROI calculation (or lack of one) stop us from getting on board. If you are waiting for a pie chart to make a decision, you’re probably missing the point.

Second, I fully recognize that calculating true ROI is frequently impossible. However there are many meaningful leading indicators and non-financial measures that can be tied to stakeholder value. We have so much data coming at us, there is simply no excuse not to measure.

Why you MUST measure.

Here are four reasons why you MUST measure the results of your corporate social media activities.

1. There is an implied value to everything. At some point in the life of every company, there will be a financial imperative to slash overhead costs. The bubble always bursts, at least in a free economy. When that happens, everything will be evaluated under the icy glare of number-crunchers — do we cut or not cut? This is the day of reckoning that defines the ”implied economic value” of any effort. Yes, the social media marketing effort will come under scrutiny. So will the receptionist, your wireless plan, and all these other mundane daily activities not normally associated with an Excel spreadsheet. When it’s your turn to justify the existence of your marketing efforts, you better be able to demonstrate business value, and it better be an explanation more convincing than “Don’t you see that measuring social media is like measuring your mother!”

2. If we are expending human effort, it should be justified. Every economic activity in a corporation directly or indirectly has to contribute to shareholder value or eventually it will go away.

Let’s look at how “un-free” social media really is. Let’s assume you have one person working full-time on social media marketing. We’ll assign that person a salary of $60,000. In a typical company, standard health, 401(k) and other benefit costs equal another 50% of the base salary, or in this case, $30,000. We’ll assign another 20% of base salary for overhead such as office space, shared services support and technology. That’s $12,000. We won’t even address travel, training, or bonuses.

So, our minimal full-up cost for one social media professional is $102,000. As a business owner, are you willing to spend more than $100,000 per year without requiring any accountability for a return? What kind of a company are you running?

3. If you’re not measuring, how do you know you’re making progress? Although Gary V may not be plotting his social media efforts on a chart, I guarantee you he has an acute sense of the return on his social media presence and also knows the point where there is a diminishing return on his efforts. That’s easy for him (and me too, by the way) because he can see the results every day. It’s more complicated in a corporation. Explaining that “it works just because I know it works” may be OK for an entrepreneur but it ain’t going to fly in a board room.

4. There is no excuse not to measure. I’m not advocating that every social media effort has a demonstrable ROI. I’m a practical guy. It may be cost-prohibitive or even impossible to determine the specific ROI of your efforts. Sometimes you need to look at qualitative tools for social media measurement. But there is no excuse for not tracking key measures that contribute to your company’s goals.

I can’t imagine asking a client to trust the progress of our social media effort without some indication of continuous improvement. To support your credibility, your long-term viability, and your personal career in social media marketing, YOU. MUST. MEASURE.

So please Mr. Vaynerchuk, Mr. Scott and all the other gurus out there … please re-consider what could be mis-interpreted as anti-measurement rants. It makes for entertaining quotes, but it’s providing confusing advice to many young people looking to you for thought leadership.

Time for your thoughts in the comment section …

Discuss This Article

Comments: 11

  • Christina says:

    In healthcare we are all about measurement. Evidence-based medicine, outcomes, patient satisfaction, compliance with regulations, improving quality and performance, managing risks, reporting, effective and efficient use of resources, etc.

    Why would we not want to also measure the effectiveness of our social media efforts?

  • Mark, I’m all for measurement. That’s cool. What I disagree with is when the bosses throw ROI requirements at real-time media like Twitter and blogs as a way to say “NO” to something that they are ignorant of. And I love to point out the hypocrisy that they do not calculate the ROI of another real-time media – their blackberry.

  • Alan says:

    Hi Mark, I agree with you totally, trouble is I believe that social media management falls in the same boat as general marketing: organisations don’t tend to monitor the ROI.

    Your point about the “bubble bursting” is good, when times are bad it is those marketers who do “value their activities” who will prosper.

  • I agree with your article and observations. Of course one has to measure all efforts conducted by your marketing department and/or director. I recently wrote an article on one of my blogs that touches on some of your points. Measuring ROI will differ depending on what your marketing goals are. Also, the ROI of a brand new processing company and an established world wide brand like Mercedes Benz will be two different stories. Furthermore, some brands and concepts lend themselves much easier to social media. If you have a hot, haute couture store called bebe at a local shopping center, one would expect that thousands of hip, cool, cute women will “like ” you and/or comment with enthusiasm. Try getting people to “like” a company that sells carborators or window screens. Different animals.

    Here’s my story:
    Regards Mike Kirner

  • @Edw3rd says:

    I suspect they’re not real anti-measurements rants, but anti-VC-backed-measurement-by-entrepreneurial-imagineer-rants. The “industry” has too many baboons chasing bunnies.

  • Those who toss out soundbites like “What’s the ROI of a Blackberry?” etc. are making poor analogies.

    Those who ignore the ROI question generally don’t know what their objectives are or never gave them a thought. Set the objectives then the ROI will come.

    Besides, if you really want to measure the ROI of a receptionist, etc., it’s definitely doable. Calculate the rate of pay and other “costs” then research the cost of an automated system, and look into what customers/callers think of the company due to his/her interaction, the issues and problem the receptionist has resolved or minimized because the system is not automated, etc. That’s just a stab. The ROI, of course, depends on what the objectives are for the position.

    – @MikeDriehorst

  • Cool post Mark. I have always associated ROI to hypocrisy especially when employers are able to measure ROI and not being able to measure that of mobile devices but after justifying on human efforts (second point), am now convinced that there is a need to determine the return on investment.

    Erick Kinuthia
    Team MDwebpro

  • Hi Mark,
    I agree with the points made about taking a cavalier attitude towards ROI. As far as I’m concerned the ROI hasn’t changed. Like any other tools, social media is either going to make you money, save you money or help you prevent losses. What I don’t agree with is the measurement madness. It’s too easy to get lost in meaningless numbers (likes, follows, RTs, views, traffic etc) and most business leaders tend to be spreadsheet junkies and feeding thm rather than educating them helps no one because buy-in usually hinges on their acceptance. And I’m not a fan of feeding the dinosaurs. Measuring these numbers don’t indicate ROI because they don’t measure anything worthwhile in terms of achieving goals. They only really measure things that sound like they matter which drives people to use tactics that can hurt or not even produce any “engagement” but make the reports look good. Most of the numbers can hekp us understand reactions to specific events or content or help measure trends but they’re not goals and they don’t necessarily help with conversions. Some agencies and brands even pay for likes/views/shares/follows to drive the numbers up. What gets lost is the value of doing the hard on the ground work to build proper relationships and identify the right people. This takes time and an attitude shift. Usually, demands for ROI are from business leaders who want a reason NOT to shift because change is hard and scary. In addition to that, you’re not going to be able to measure the ROI of everything you do in social media because part of what gets discovered through social media gets spread outside of social media and the purchases or other completions of calls to action can also happen offline. What’s more important is to measure what matters and not create false expectations that detract from what we’re really trying to do with social media which is usually to find the right people and get them to do what we want them to do so that there is R on our I. I firmly believe that social media and marketing are best used as business transformation tools to facilitate a state where a business has as many positive relationships as possible and I use them in this manner in my work. My take on what’s worth measuring? Both internally and externally: Thank You, Wow and Done. Simple (but not necessarily easy) as that. I detail what that means on an external basis on my blog and would love to hear what you think. Link is here:

    • Also, in terms of cost savings when the bubble bursts, companies would do better to get more social themselves and consult their employees on their ideas for how to save money than to bring in the number crunchers. I’ve seen it work. The employees know what works and what doesn’t and they’re probably better at helping you cut than “number crunchers”.

  • Two key points stick out for me in that article:
    1. “We have so much data coming at us, there is simply no excuse not to measure”
    2. If you are going to spend $100k on a social media professional and not measure their activity, you must be insane.

    I love guru Gary Vaynerchuck @garyvee. I’ve often used a similar argument myself challenging people “What’s the ROI of your dog”. It’s a provocative statement that starts a great debate, but to say that you can’t measure what we do in social is ridiculous. like the ‘value of a fan’ debate, this will only get worse as brands start to look to justify their increasingly large social spends.

    The problem is that 85% of people who are working in social media have been in it for less than 2 years. That’s why there is so much bad advice floating around and so many badly run campaigns (without any real measurement).

    Simply hiding behind an “engagement” argument or palming social off as 100% customer service and therefore above such metric is naive and ignorant. The truth about social (and the reason that I love it so much) is that we can measure EVERYTHING. You can’t do that with all ATL advertising. You can’t do it with PR. it’s almost impossible measuring SEO effectively.

    I think the solution is for all the guru’s to get the f*** out of the way and let the 15% of us who know what we are doing – do our jobs properly.

    • It’s not true that you can measure everything and I don’t think you should either. It’s too easy to get lost in the numbers. As for the value of a fan/follower, you can’t assume people who have clicked “Like” or “Follow” have any monetary value unless you’ve got so many other things right: web design, calls to action, appropriate content, great product etc and even then those are not guarantees that people will buy anything. Especially if you run “like to enter” or “Follow and RT” competitions or similarly incentivise this behaviour.

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