Brand managers should stop calculating ROI for social.
I keep hearing that brands want to build strong relationships with their consumers through social platforms. They love their consumers and want consumers to love them back. Some brands do believe that consumers love them more than anything else in life. The target audience descriptions sound mushy and brand promises sound like wedding vows.
Today, 'social media' is the most discussed topic in advertising and marketing circles. Marketers and admen are desperate to rub shoulders or share a panel with Mark Zuckerberg. Every second person in the industry claims to be a social media expert – Facebook expert, Twitter expert, listening expert, fans acquisition expert, social campaign expert, etc.
Every agency of its worth now has proprietary tools to tackle social, and marketers are trying to find quick solutions to win in social. Over a short period of time, the industry has managed to develop processes and methodologies for social marketing. Smart people have also invented tools to listen, engage, measure, and predict.
It is highly impressive given the transient nature of social media. All this makes it look like marketers (and admen) have really understood social and now we just need to scale it to new heights. So there enters a new character called ROI (return on investment).
In the last six months, I have seen increased focus on calculating ROI for social media. I have seen presentations, heard panel discussions, and read point of views that highlight how to calculate ROI. Some of them actually go in specifics - ROI on Facebook or Twitter or any such platform. Broadly speaking, they all follow a standard formula.
ROI = [Gains from investments – cost of investment/cost of investment
I have spent considerable time studying and understanding the issue of ROI and as it relates to social. I personally find the concept of ROI for social completely out of place and irrelevant. Most people who claim to calculate ROI for social don't really understand the domain because social is not really about releasing display ads on Facebook or doing Promoted Tweets.
In my humble opinion, initiatives on social platforms are to engage people through conversations, gain respect, win trust, show care, and finally build a long-lasting relationship. I wonder where does ROI fit into conversations, respect, trust, and relationships. Would you calculate ROI on your personal relationship and time spent with your parents, spouse, children, siblings, and friends? Your parents gave you birth, brought you up, put up with your stupidities, pampered you, paid for your education, participated in your joyous moments, and were there for you in your tough times. Your spouse loves you, makes you happy, cares for you, stands up for you, and partners you in joys and sorrows. Your true friends accept you as who you are and not what title you carry. They hang out with you, try to pull you out of problems, and entertain you.
If you invest your time and money to nurture and strengthen your relationships, would you calculate ROI? And how? Will you spend more or less time with your parents, spouse, and friends because you don't get enough returns from them? What returns are they getting on you? And how would you feel if your mother starts calculating ROI before she cooks your favorite food or your wife starts calculating ROI before she gives you a kiss or your son calculates ROI before giving you a sweet smile?
I'm not against measuring strength of relationships and bonds. I'm not against working on your relationships to make them stronger and more meaningful. I'm not against evaluating whether the love is real or superficial. But I'm against putting monetary value and expecting monetary returns from initiatives that are meant for relationships, love, trust, and care. In my opinion, brands need to really decide what they stand for and what they seek from their consumers.
So my humble request to brand managers is to take relationships seriously and answer the following questions truthfully:
Are you in love with your consumers?
Do you want them to love you back?
Do you want a long-term relationship?
Do you want their trust?
Do you enjoy the conversations?
Do you care for your consumers?
If the answer to any of the above questions is yes, then please stop calculating ROI on social! But if you insist on calculating ROI on social, then don't claim you're in love – just accept that you're doing a trade.
Join the Industry's Leading eCommerce & Direct Marketing Experts in Chicago
ClickZ Live Chicago (Nov 3-6) will deliver over 50 sessions across 4 days and 10 individual tracks, including Data-Driven Marketing, Social, Mobile, Display, Search and Email. Check out the full agenda and register by Friday, Oct 3 to take advantage of Early Bird Rates!
Pushkar Sane is co-founder and CEO of Convergination Ventures - a firm focused on driving growth plus innovation through convergence and imagination. In order to keep Convergination ahead of the market he spends quality time thinking about future of content and media, impact of digitization on human life and businesses, shape of technology and most importantly human aspirations and pain points. He expresses his observations and inspirations through his blog, monthly ClickZ Asia column, articles, LinkedIn updates, and tweets. Prior to founding Convergination, Pushkar worked in technology, advertising, and media for over 14 years focusing on strategy, account management, digital, CRM, data, analytics, technology and media. He gained valuable business understanding by virtue of working with clients from diverse industry sections (IT, electronics, auto, CPG, F&B, travel, and financial services), world-class brands (General Motors, Samsung, Intel, P&G, Cartier, Diageo, Emirates, Hong Kong Tourism, UBS, Tata Motors, Amul), and geographies (Asia Pacific countries). Most recently he was chief digital officer and global head of social marketing at Starcom MediaVest Group. Previously he worked for Euro RSCG Worldwide in Hong Kong, DRAFTFCB in Hong Kong and India, and Mandar Electronic Systems and Software in India. He holds a B.S. in physics, a post graduate diploma in computer applications from MS University of Baroda in India, and a post graduate diploma in advertising and communications management from NMIMS Mumbai in India.
IBM Social Analytics: The Science Behind Social Media Marketing
80% of internet users say they prefer to connect with brands via Facebook. 65% of social media users say they use it to learn more about brands, products and services. Learn about how to find more about customers' attitudes, preferences and buying habits from what they say on social media channels.
The Multiplier Effect of Integrating Search & Social Advertising
Latest research reveals 68% higher revenue per conversion for marketers who integrate their search & social advertising. In addition to the research results, this whitepaper also outlines 5 strategies and 15 tactics you can use to better integrate your search and social campaigns.
September 17, 2014
September 23, 2014
September 30, 2014
1:00pm ET/10:00am PT