Point-Counterpoint Emerges Over the ROI of Social Media

It started out innocently enough.

Earlier this month, I posted a simple question online about how marketers measure the ROI of social media. I was blown away by all the responses I got.

The question was posted on eM+C contributor Jim Gilbert’s popular LinkedIn Group, Social Media Marketing Questions & Answers.

It started out innocently enough.

Earlier this month, I posted a simple question online about how marketers measure the ROI of social media. I was blown away by all the responses I got.

The question was posted on eM+C contributor Jim Gilbert’s popular LinkedIn Group, Social Media Marketing Questions & Answers.

Perhaps the most interesting response came from an exchange that took place in the discussion section of the LinkedIn Group between Steve Goldner, a social media/social network consultant who goes by the name Social Steve, and Doug Garnett, the founder and CEO of Atomic Direct, a brand DRTV agency. To me, it exemplified the ongoing battle between traditional direct marketers and new media executives when it comes to how to measure social media ROI.

Goldner started the discussion by posting a link to an article he wrote titled, “Measuring the Value of Social Media.” He noted that the article explained there’s a way to measure the ROI of social media, but marketers should be careful not to use “sales metrics” when measuring it.

That got Garnett thinking. “Steve’s article seems to suggest that ‘a metric of tweets, for example, is a valid ROI analysis.’ I don’t think that’s at all related to ROI,” he wrote.

He went on: “Having lots of tweets just might contribute to ROI. OR, it might be entirely tangential. You might have higher ROI with fewer Tweets if they’re of better quality.”

Garnett suggested that marketers stick with it and look for true ROI from social media, which he described as “increased sales (at some reasonable point) or same sales with lower marketing costs.”

Goldner countered that what Garnett considers true social media ROI — increased sales (at some reasonable point) or same sales with lower marketing costs — is really lead generation and that “social media should be measured in lead generation and increasing the probability of sales, not sales. Same is true for all other marketing endeavors.”

Garnett countered, “[I] guess one place we part ways is the goal of marketing. The advertising and communication goals are not necessarily focused on sales. But to me, marketing is the process of bringing an entire range of efforts (yup, the ‘4P’s’ are still quite valid) together to create revenue, profit, and market share.”

To read the whole discussion, click here.

I guess it all really depends how you look at it. Coming from the direct marketing world, I hear what Garnett is saying. But as I get more immersed in new media as editor of eM+C, I see Goldner’s point as well. So, I guess I haven’t made up my mind yet about what is the right way to look at it. What’s your take on the ROI of social media? Or the role of marketing in general? Let’s start a similar discussion here.

Point-Counterpoint Emerges Over the ROI of Social Media

It started out innocently enough.

Earlier this month, I posted a simple question online about how marketers measure the ROI of social media and was blown away by all the responses I got.

The question was posted on eM+C contributor Jim Gilbert’s popular LinkedIn Group, Social Media Marketing Questions & Answers.

It started out innocently enough.

Earlier this month, I posted a simple question online about how marketers measure the ROI of social media and was blown away by all the responses I got.

The question was posted on eM+C contributor Jim Gilbert’s popular LinkedIn Group, Social Media Marketing Questions & Answers.

Perhaps the most interesting response came from an exchange that took place in the discussion section of the LinkedIn Group between Steve Goldner, a social media/social network consultant who goes by the name Social Steve, and Doug Garnett, the founder and CEO of Atomic Direct, a brand DRTV agency. To me, it exemplified the ongoing battle between traditional direct marketers and new media executives when it comes to how to measure social media ROI.

Goldner started the discussion by posting a link to an article he wrote titled, “Measuring the Value of Social Media.” He noted that the article explained there’s a way to measure the ROI of social media, but marketers should be careful not to use “sales metrics” when measuring it.

That got Garnett thinking. “Steve’s article seems to suggest that ‘a metric of tweets, for example, is a valid ROI analysis. I don’t think that’s at all related to ROI,’ he wrote.

He went on: “Having lots of tweets just might contribute to ROI. OR, it might be entirely tangential. You might have higher ROI with fewer Tweets if they’re of better quality.”

Garnett suggested that marketers stick with it and look for true ROI from social media, which he described as “increased sales (at some reasonable point) or same sales with lower marketing costs.”

Goldner countered that what Garnett considers true social media ROI — increased sales (at some reasonable point) or same sales with lower marketing costs — is really lead generation and that “social media should be measured in lead generation and increasing the probability of sales, not sales. Same is true for all other marketing endeavors.”

Garnett countered, “[I] guess one place we part ways is the goal of marketing. The advertising and communication goals are not necessarily focused on sales. But to me, marketing is the process of bringing an entire range of efforts (yup, the ‘4P’s’ are still quite valid) together to create revenue, profit, and market share.”

To read the whole discussion, click here.

I guess it all really depends how you look at it. Coming from the direct marketing world, I hear what Garnett is saying. But as I get more immersed in new media as editor of eM+C, I see Goldner’s point as well. So, I guess I haven’t made up my mind yet about what is the right way to look at it. What’s your take on the ROI of social media? Or on the role of marketing in general? Let’s start a similar discussion here.