ROI is RETURN ON INVESTMENT!
Lately, ROI has become a dirty word in the Social Media arena. VPs and Execs who are just beginning to look at social media as a channel are asking the first question they always ask when evaluating anything new…”What’s the ROI?”
The problem with ROI and Social Media is that no one has truly cracked the ROI formula yet. We know Social Media is valuable. We have seen first hand how it drives web traffic and increases chances of sales. We know it connects people and creates relationships that would otherwise be impossible…but we can’t seem to say “If you invest $10,000 in these social media applications, you will see a return on your sales of $100,000 in 12 months”)
So, what are we to do?
Lately I have been noticing a disturbing trend among social media practitioners. Instead of admitting the difficulty of ROI and seeking to crack the formula, people are simply renaming it! I’ve heard it called “Return on Influence” and “Retention on investment“. I also recently saw the letters re-arranged to IOR for “Impact on Relationships“. This does little to satisfy the executive’s need for hard data.
So…instead of jumping on the re-definition bandwagon, I went on the hunt for some smart folks who have begun to address ROI for what it is… a way to measure the success or failure of time and money spent on social media.