Here’s the thing about social media: the more money companies spend on it, the more that return on investment (ROI) is thrust into the spotlight. After all, it makes complete sense for businesses to get a handle on the effectiveness of their activities.
That is, at least, the theory because there appears to be growing signs that some companies don’t care about the ROI of social media. It’s not that they aren’t interesting in measuring bang for buck but, at this point, they seem content to be active within the social media realm than trying to quantify whether what their doing is working.
This against-the-grain approach to ROI struck me while reading a blog post by Rebecca Pollack Scherr about KFC’s social media activities.
Rick Maynard, manager of public affairs with KFC, said: “We don’t get a lot of pressure to justify [the return on investment]. It’s a very important customer-service element, and that’s enough for us.”
He added that KFC doesn’t spend “a lot of time figuring out the value of a Facebook follower. We see it as 3.5 million people who opted in and feel strongly about the brand, and we owe them the interaction and have a lot of fun doing it.”
Another blow to the importance of ROI came from Brad Shaw, Home Depot’s vice-president for corporate communications and external affairs, who told Fast Company’s Farhad Manjoo the company was “ trying different ways to help us better understand the ‘value’ of a Facebook like….but at this point, revenue is not the intent.”
In the same Fast Company article, Doug Clark, Audi of America’s general manager for social media and customer engagement, said the car maker had no idea how whether a social media campaign launched at last year’s Super Bowl had any impact on sales. ”Today, the equation to measure that doesn’t exist,” he said.
While these are admittedly only three companies, they are major brands making large investments on social media. One would think that determining ROI would be important to justify whether the money being spent is having an impact other than attracting followers and Likes, tweets and updates.
Perhaps the cavalier attitude toward ROI has to do with the fact spending on social media is a drop in the bucket compared with other marketing and sales activities. It means social media is more of an experiment and learning process than an established corporate activity. As a result, ROI isn’t as important as participating and learning first-hand what works and what doesn’t.
The importance of measuring ROI can’t be dismissed because any corporate activity needs to be measured and assessed to see if warrants investment versus putting the money somewhere else. But for all the focus on ROI, the reality may be that it’s still early days for social media and, as a result, ROI isn’t a big priority yet.
At the same time, the ability to measure ROI is still in its infancy. Sure there are dozens of different ways to measure ROI but there is a long way to go before they become rock-hard and established.
For now, social media ROI attracts a lot of attention because companies wants to do know how they are doing beyond attracting attention and activity. But it does seem like there more talk than walk at least for time being.
How important is measuring social media ROI?
