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Archive for June 11th, 2009

“The person who says it can’t be done is always interrupted by the one who just did it.”

– From the movie “Daylight,” with Sly “Rocky/Rambo” Stallone

To every Social Media pundit or measurement “guru” out there who claims that calculating the ROI of Social Media is either impossible, too imprecise or even irrelevant, I have an ice-cold bottle of reality waiting for you: You’re wrong and you don’t know what you’re talking about.

I’ve said it before and I will say it again: Just because you don’t know how doesn’t mean it’s impossible. 😀

Fact: R.O.I. calculation isn’t rocket science. I can teach a 10-year-old the basics of R.O.I. calculation in 30 minutes.

Fact: R.O.I. calculation is media-agnostic. (It isn’t an old media or new media discussion. Not even close. If you are talking about impression, CPMs, clickthroughs or other media metrics as R.O.I. values, check your map: You are hundreds of miles off course.)

Fact: R.O.I. matters to people who run businesses because it either validates or invalidates an investment (Social Media or otherwise). So you can’t skirt it, blow it off or make it up.

Fact: R.O.I. monitoring allows companies to fine-tune their marketing and business-development efforts on the fly and improve outcomes over time. (If you don’t understand R.O.I., you can’t measure the effectiveness of your activities, and if you can’t measure effectiveness, you can’t truly impact performance. It’s kind of like driving blind.)

Fact: If you don’t understand R.O.I. from a business (P&L) perspective, you just don’t understand R.O.I. Sorry. That’s just reality. Deal with it. (And fix it. For your own sake.)

Fact: Claiming that Social Media R.O.I. is difficult or impossible to measure is as ill-informed as saying that changes in transaction trends are difficult or impossible to measure.

Fact: Every time I turn my head to see who just used the word “impossible,” all I see is the ego of someone who thinks they have nothing new (or old, in this case) to learn.

Fact: The more specialized a measurement “expert” is (especially when it comes to media measurement), the less likely it is that they will be able to help you put all of the pieces of the Social Media R.O.I. question together. So beware the gurus. Their focus is likely too narrow to be of any use to you when it comes to calculating R.O.I.

The truth is, R.O.I. measurement takes work but is relatively simple to do. You just can’t get caught up in mistaking media metrics and “impact” measurement (like increased traffic to your site, social mentions or positive WOM) with actual R.O.I. analysis. (Apples and oranges.)  Those of us with practical business management experience (in which R.O.I. analysis and real business performance come in daily doses) AND  in community or brand management have been doing this sort of thing for years. We know how to measure what matters, and it’s simple.

So if you’re a business executive who feels frustrated by the lack of R.O.I. understanding in the Social Media “expert” community (or the media measurement community), relax. Don’t buy into the “it can’t be done” cop-out. That tired old line is about to be swept out the door for good.

Hang tight. We get into the “How” in just a few more days.

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