What is the ROI of Social Media?

Posted by Brad J. Ward | Posted in Analytics, Higher Education, Marketing, Recruitment, Social Media, Thoughts | Posted on 10-29-2008

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I just read a great post by Jason Falls on the ROI of Social Media [Link].  It’s a must-read for anyone dealing with social media and sums some things that have been going through my head when trying to quantify the value/return on social media efforts.  Here are a few quotes that stand out to me from the article if you don’t have time to read the whole thing:

“The problem with trying to determine ROI for social media is you are trying to put numeric quantities around human interactions and conversations, which are not quantifiable. To illustrate that point for all our measurement and metric geeks out there, what you are trying to do is assign multiple choice scoring to an essay question. It’s not possible.”

“’Ultimately, the key question to ask when measuring engagement is, ‘Are we getting what we want out of the conversation?’ And, as stubborn as it sounds Mr. CEO, you don’t get money out of a conversation.”

“Avinash Kaushik says much of the same in his discussions on web analytics. This isn’t an end-around the need for ROI, it’s the answer. Or at least a big part of the answer.”

“If your goal is to participate in the conversation, to enhance your relationship with your audiences and become a trusted member of the community that surrounds your brand, then your measures should prove you’ve done those things. Your ROI is what you got out of the conversation, not what you got out of their checkbook.”

Well said, Jason. It’s exciting to be in a time when we are formulating all of this and are able to read and share thoughts and ideas with the leaders in the industry. Check out the post and comments and tell me what you think.

*update*: I DO think that it is important to track and find some sort of measure on social media efforts.  I just think it’s still too unclear on what the specific measurements are.  It’s almost as if I’m comparing apples to oranges when I look at different measurements for different campaigns/strategies on different platforms… if that makes sense. :)

Comments posted (22)

I disagree. Human interactions are extremely quantifiable if you look at patterns of behavior leading to certain outcomes. Saying something is not quantifiable is just another way to say “I’m too lazy to do it” in my opinion. How do those human interactions add value to the organization, in relation to meeting business goals? You’re in admissions so lets look at a real example from that – how much does human interaction increase the odds that a student will enroll at your university? That is an EXTREMELY quantifiable number. If people that are active in your social network enroll at a higher rate than the average population, do some simple math and you can place a dollar value per person on that social network. Then relate that dollar value back to the cost of building and maintaining that network.

Kinda just took the thunder out of my presentation next week, but still… :-)

I think we’re certainly getting there. In my IACAC presentation yesterday I talked about ‘future metrics’. I’m noticing more and more sites starting to provide this info.

“I’m too lazy to do it” is a great thought. It definitely takes work, time and consistent tracking. I wonder if it’s an issue of resources for some?

I’m excited to see the ’09 enrollment and match facebook/BUForum/chat attendees/Zinch/etc. students and see how many are admitted/matriculated, etc.

I’ll chat a bit in my presentation about ROI vs. ROC (return on conversation). Really looking forward to your presentation. Probably more than any of the other ones on the list.

If students participate in your online brand and are motivated to take actions toward a tangible outcome, the activity really needs to be measured. How else are you going to know if all the effort expended to maintain blogs, podcast, YouTube, etc., is actually worth it?

(Which becomes a very key question as universities start to feel the impact of the economic downturn.)

Even if there is no standard formula available to measure an activity, like blogs in social media, it is still valuable to pull out some measureable attributes (like # of followers, # of views, # of responses), create a formula and consistently use it over time.

The question in my mind though when talking about applying conversion metrics is “conversion to what?” Admissions is one area of higher ed where there are specific indicators as to when a student target moves from a suspect to a prospect, prospect to applicant and so forth. The issue I see in our online metrics is we don’t understand where our online efforts fit into the bigger conversion funnel.

In essence, we aren’t mapping our web activities to the overall admissions process and understanding which applications/activities prompt conversion to the next level of the funnel. It’s the concept of micro-conversions except related to the overall process.

I did a presentation on this at EMG’s Brand Managers’ Summit a few weeks ago. In it I showed how coupling web analytics with surveys can provide a more complete picture of the influence of specific online activities on the larger admissions funnel.

I’ll be writing more about this subject on our company’s blog. Glad to know there are others in higher ed talking about it as well.

Just wanted to respond to Doug’s note that its important to justify efforts for blogs, youtube, etc. in these economic times.
These are the types of efforts that should INTENSIFY in tough times, as opposed to pricy creative campaigns (yes this is what I sell) because they are no/low cost and can generate the same, if not more buzz.

Tell me, traditionally how did admission offices measure the effectiveness of their print campaigns?

That’s a great question. Measuring print is even more elusive than social media. While admittedly I’ve spent my higher education career on the e-communications side, my days in PR would say response cards, follow-up calls and event registrations are likely outcomes to measure…along with surveys, post-campaign though.

Print, or a (somewhat) pricy creative campaign, does have a place though; it should support a web-centric, participatory brand strategy. Coupled with this should be a process to capture customer data at every possible touch point. For example, if a student calls to register a visit he should also be asked, “And what made (prompted) you decide to visit?” Maybe it was a direct mail piece, maybe an email, maybe a recruiter visit to his school. This can be evaluated alongside web analytics, surveys and metrics along the admissions funnel to determine which overall communication strategies are having the greatest impact.

Brad, I just posted on a similar topic today:

http://www.alumnifutures.com/2008/10/community-marketing-and-finding-the-fish.html

Great post and comments!

First, thanks for the cite/point/comments. I’m glad the discussion is finding its way around the web. Only through further discourse will we be able to solve the problem.

As far as Karlyn’s comment, while I appreciate her criticism vastly – someone has to call B.S. – I think we’re talking about very different animals. A college or university can absolutely record and track contact with prospective students, look at the number that applied and enrolled and see a quantification of their efforts. But that is putting a very generic fence around “human interaction and conversation.”

What about the 10 year old who comes to a basketball came on campus? Is that experience quantifiable? Only if you know who that 10 year old is and track his behavior over time, which is impossible to do. Admissions can quantify only those which self-identify or are targeted, not the entire consumer base.

Similarly, brands in social media are having conversation online with a certain number of people they target or react to, but how many people/readers/lurkers see those conversations and start down the road of awareness-trial-conversion and so on. Hardly something possible to track and certainly not something I would deem someone lazy for not trying.

Still, I’ve always said we need to come up with a better answer than you can’t connect those dots. Hopefully, one day, we will.

Hi Jason,

You actually can track the experience of the 10-year-old kid, to some extent. If the experience of being on campus was that profound, they would mention it in their admissions interview or in their essay later on. When I worked in admissions, the office tracked all the kids that came through the various summer camps through matriculation (and in some cases, graduation) so see if the camps produced more qualified leads.

I would always deem someone lazy for not trying because in most cases, there is a way to track it, at least to some extent. You mention lurkers. So when those lurkers do finally self-identify, you make sure you ask them what drove them to do so. Also, if you’re looking at people who are already part of a social network, they HAVE self-identified through their registration. Tracking there is as easy as making a note of it in your database. I’m sorry, but I’m not going to fault the CEO for calling an employee out on not being able to show the value of social media – he’s absolutely right to do so.

Karlyn – Perhaps one 10-year-old who happens to mention, but not all contact points at all times.

And it’s not for not trying. Thousands of people, including me, have been trying to solve the measurement/metrics of soft communications for years. What we’re doing now is not giving up, but saying, “We’ve been measuring the wrong things. We need to ask different questions.”

I would never tell a client they won’t receive some proof that our activity is working, but if they say, “how many items did I sell because of my blog,” I’m probably going to say, “That’s not quite easy to say. Since the goal of your blog wasn’t to drive sales, why don’t we look at the results of its purpose (to extend reach, establish thought leadership, open direct conversation with consumers, etc.”

Jason – having been a former admissions counselor, I can emphatically say that you can measure pretty much every official touchpoint a student has with a school, on and off line. I’ve seen it done. That includes summer camps.

In regards to how many products you sell because of your blog, that number can also be measured to some extent, with the caveat of course that its probably not JUST the blog that’s doing it. You’re right on if the goal of the blog wasn’t to drive sales, you’re probably not going to as much….but what WAS the goal of the blog then? To give customers a warm fuzzy feeling? When you set goals, you have to make sure you have a mechanism in place to measure them. Maybe you should come to Florida next week to the conference Brad and I are speaking at because my presentation is going to lay out exactly how to do this stuff. ;-)

Your exact words were “certainly not something I would deem someone lazy for not trying”. I’m sorry, but again, I would deem ANYONE who doesn’t put in the effort to try as lazy. I’m not saying they are lazy if they can’t figure out a 100% perfect way to do it, but they ARE lazy if they don’t try.

Those are some great points! Thanks for sharing all of your ideas on quantifying the ROI on Social Media communications. Though I think measuring the ROI for every student is nearly impossible, I think Karlyn has a great point that you can measure ROI on most students and in most circumstances depending on what variables you are measuring. We deal with this kind of stuff everyday in the industry I am in. Trying to convince colleges and universities to see the ROI is another story. Keep up the good work and keep the discussions going!

What conference are you two going to?

Karlyn – you had me all the way until the last comment. We’ve both worked in higher ed, so we understand the realities. “Lazy” isn’t necessarily the problem. Lack of time, experience/knowledge and organizational politics play a huge part in why some universities aren’t trying. In your presentation next week, ask the group three simple questions:

1. How many of you use web analytics? (Maybe half)

2. How many of you use analytics in your strategic decision-making? (Maybe 1-2)

3. For those who didn’t raise your hands to both questions, what is getting in your way? (Time and knowledge should rise to the top. I’d be interested to know what else makes the list if you do ask.)

We can’t lose sight of what our colleagues “on the ground” are facing daily. We should help them advocate to their managers, VPs and presidents on the value of establishing a culture of measurement and data-driven strategic (marketing/pr) planning.

Sighting my earlier comments regarding the economic downturn, now is the time for us to help our colleagues learn how to translate analytics into language understood by their superiors.

It’s another reason why mapping online applications/activities to tangible KPI’s is so important. It bridges the gap between the outcomes/goals leadership value and the online activities themselves.

Hi Doug,

Sorry, but I don’t care how much explanation you put behind it – people who do not TRY are lazy and you taking issue with my last statement basically amounts to you condoning people who do not TRY. That just doesn’t fly with me.

Don’t know web analytics? I’ll give you a book so you can learn it. That will allow you to use it in your strategic decision making. If time and knowledge are the only things standing in their way, then make the time and seek out the knowledge. We work in education for crying out loud! If you can’t make the time to LEARN then, yes, you are being lazy for not trying. People can make all the excuses in the world but we can always find time for the things we WANT to do (though those aren’t always the same as the things we NEED to do to be successful).

After reading Brad’s next post on the success of his chat, I think some of the argument here over quantifiable analytics is a bit off-track. While the numbers tell part of the story, they miss the “human component” that others have mentioned. Qualitative assessments can be perfectly valid measures of success, and are best applied to situations where the quality of the interaction is the most important outcome.

As tech-heads, I think a key part (if not the primary part) of our job is facilitating interactions at as high quality a level as possible. Surveys can help provide some numbers around this measure, but they can be misleading depending on the situation. At the end of the day, you have to be able to talk to the bosses about your success, and often that can be achieved with compelling anecdotal evidence (as Brad did in the chat post). I love psychometrics as much as the next person, but we are increasingly moving into a space where success is not defined by bounce rate.

[...] social media ROI is really so important, read more posts on ROI from Jason Falls, Janet Fouts and Brad J. Ward, find some good tools and posts on the topic on Constructing [...]

While I think it’s important to take “qualitative measures of success” into consideration, we live in a dollars and cents world. In my opinion, Social Media is much more quantifiable than print,radio, television, etc. I think it’s just a matter of what criteria you use to measure.

We use these criteria:
1) Number of links to myUsearch
2) Number of mentions of the myUsearch name (it’s great if you can measure whether these are positive vs. negative)
3) Traffic from social networking sites

And then we compare these numbers to a drop or increase in sales activity. It’s pretty simple. If you measure it for long enough, you will probably see a fairly similar increase in sales in proportion to your social networking activity. Then you can prove that there is a ROI.

I read several blogs by some that have written here (via comments or otherwise). I have also worked in higher ed for many years. It is not always possible to track every person that comes to our campuses. Not all are part of camps–we could get lists from those that organize those.

Some may come to our sporting events, or theatrical productions or just like to hang out in our quad.

I honestly find some of the comments here frustrating. The tone in some of the comments make it seem as though the author(s) of them are always correct and have the only right answer. I’ve found this across many blogs that the author(s) make comment on or even author the posts.

I’m all for discussion–even disagreement–but the tone is just frustrating. Each of us has our own experiences. Let’s be open minded enough to listen to each other, rather than thinking that OUR way is the only right way.

Hey Susan.

I think you bring up a great point. Although it’s important to track the ROI of social networking, it is also important to understand that there are other results (going to a football game) that cannot be counted. It’s not an exact science and I agree that we all need to listen to each other. I apologize if my comment took a “I know everything, you know nothing” tone. It’s nice to have someone to keep us all in check.

Tone is always up for interpretation, or misinterpretation. Part of the problem of the internet. Honestly, I think comments about tone, rather than about content, are a bit frustration myself.

As someone who develops and consults to Admissions/Development offices on their information systems, I am with Karlyn Morissette in saying that you can absolutely measure social media’s ROI. Every point of interaction should be captured, and Social Media needs to be part of the any school’s marketing plan. Don’t confuse social-marketing with ad-hoc marketing…authentic doesn’t mean it has to be random and unguided.

Every ‘input’ into a school’s marketing activity incurs some kind of cost. At the admissions level, you are ultimately measuring admissions and retention yields. If you want to measure brand development/awareness, you can do that too…

[...] What is the ROI of Social Media? Posted on December 18, 2008 by straxis What is the ROI of Social Media? [...]

As someone who develops and consults to Admissions/Development offices on their information systems

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