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To Listen, Publicize or Sell: ROI and the Purpose of Social Media

Posted Jun 15 2009 6:27pm

The real value of social media is that it gives you the ability to listen,” one consultant offered.

Another panelist suggested, “ I think Twitter and blogs should be used more for corporate communications and PRthan for brand promotion.”

The Professor tried to tackle the big issue, “ You can’t really measure ROI of social media, but if you look at a traditional marketing model, and assume social media leads to even a 1% increase in awareness, that should lead to big gains in sales and profits.

I heard these comments from distinguished panelists at recent forum on the pharmaceutical industry’s use of social media. Each comment was offered in response to a question from the audience, and each comment on its own is very valid.

But what wasn’t addressed was that these comments taken all together raise an even larger issue: What is the purpose of social media, and is the return on investment (ROI) question even valid? roi1

The dreaded ROI question seems to come from those who aren’t themselves familiar with social media; many skeptical marketers ask, “ What’s the ROI of Twitter or YouTube?

If social media should be used to LISTEN, then the dreaded ROI question can be batted away with the comparison, “ What’s the ROI of focus groups? “  Clearly marketers use focus groups to gain insights all the time and don’t ever pause to calculate its ROI.

If social media is to be used for PUBLICITY, then the ROI question is easily handled with the counter, “ What’s the ROI of press releases? ”  Press releases are still the bread and butter of PR firms and corporate communication departments and nobody ever asks to see the link between a press release and an increase in market share.

If social media is to be used to increase sales, and I think it can (I can hear the gasps already!), then you can track ROI the same way you would track your other online media campaigns. Like other e-marketing campaigns your call to action can be tracked in total clickthroughs and conversions on specific landing pages.

And all of this is part of the problem, and power, of social media. It can be used for all three purposes: Listen, Promote, Sell.  And it gets confusing to talk about social media when you aren’t clear about what the intent is. Focus groups and surveys give you market intelligence, but they don’t actually promote. Press releases and media tours are great to build awareness, but you don’t learn much about the market. And direct sales efforts drive sales, but isn’t optimal for listening or awareness building.

Social media lets you listen, promote, and sell. And that makes it great, and that can make it confusing.

So what do you use it for? What ROI are you expecting?


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