Monday, November 17, 2008

Social Marketing ROI: Ignore At Your Own Peril

Last Friday morning, I had an informative conversation with new friends Paul May and Jeremy Bencken of BuzzStream. The topic was return on investment (ROI) in the world of social media/social marketing and whether companies will continue to spend money on social endeavors without a demonstrable return on their investment. What spurred the conversation was Paul's recent blog post inspired by friend and fellow blogger, Jason Falls, similarly focused post.

What I liked about our discussion was the fact that Paul, Jeremy and I were all completely aligned. While we appreciate the "Clue Train" mantra that many folks cite these days about social media/social marketing being able to put a "human face" on a company, at the end of the day a company needs to be able to be capable of demonstrating real results from their social efforts. What this doesn't mean is that the two goals need to be mutually exclusive and in fact, when done correctly, a company can enjoy greater results by being human AND tapping into the power of social

This is reinforced by what we're seeing in terms of results from some of the companies that our company, Powered, helps our customers enjoy (yes, I know I promised I wouldn't talk too much about Powered but the results we're seeing from our customers social marketing/elearning programs reinforce my point). As we wrap up our annual ROI report, here are just a few of the preliminary results our customers experienced in 2008.

Of our customers' web site visitors who participated in one of our "Powered" learning centers/managed communities:

  • 92% would recommend our customers' site to a friend

  • 95% would visit our customers' site again

  • 85% would recommend our customers' brand to a friend

  • 66% would be more likely to purchase from our customers' brand

  • 63% have a more positive view of our customers' brand

Yeah, I was impressed when I first saw these numbers too, but what I really liked was the fact that our account services and content teams here make a point of regularly encouraging our customers to be open, honest and transparent with their customers. One might think this is a no brainer given the fact that our customers are investing time and money into these programs but that's not always the case (as evidenced by Gartner's recent report). Even better, most of our clients actually listen to us.

So is your company measuring ROI around its community efforts? Does your community tie to specific business goals like engagement, loyalty, purchase intent or other traditional marketing metrics? If not, you may want to start thinking that way. While it's important to put a human face on your brand (and that can likely be the BIGGEST area of impact for your company), having measurable programs will be critical in helping protect your social marketing/social media programs in tough times while the world sorts through its current credit/financial mess.

If you have examples of companies that are doing a great job of growing and measuring their "social" efforts, please include in the comments below.

Cross-posted on


  1. I've never been a big fan of the "Forget ROI" approach to social media. With due respect to our friends who've argued for less obsession with ROI, I think we're a little naive if we think we'll be able to get away with that approach forever.

    Aaron...other than individual measures like that of Powered, do you know if anyone's taking the lead on DEFINING how we could measure ROI in social? Seems like a good opportunity to collaborate on naming the benchmarks.

  2. Scott - I'm glad we agree. Regarding the "anyone" who's leading the charge in SM measurement, Katie Payne is doing a good job in that respect. Her main tenant is "figure out what you're measuring" first.

  3. Hey Aaron -

    Are you gathering the percentages from online surveys within the community? How would you propose measuring sentiment influxes in a distributed community campaign? (i.e. Using twitter, blogs, social networks rather than building a portal). Hand sampling appears to be the current methodology of choice...

    Also - Glad you are connecting with the guys at BuzzStream. I have conversed with Paul online and am excited to preview the team's management tool in the near future!

    Andy Angelos

  4. Congrats on your job change.
    Contact me at or
    Would like to discuss social networking as part of an financial advisor's client contact and marketing program. Your experience at Fidelity gives you a good backaground. And, maybe we are related?

  5. I think a majority of marketers are still struggling understanding ways to leverage social media, leave alone measuring it. The focus should be on trying and maybe not so much measuring. Try, fail, learn and try again.

    Not discounting that any effort should be measured, but I really don't think enough companies are even playing with the never ending changes and possibilities in social media.

  6. @Andy try taking a look at Radian6 or BuzzGain. You can also connect with - she's a rock star in the social measurement world.

    @wayne - great connecting with you. I'm sending you an e-mail as we speak

    @Ishwar good point - although I think more marketers are thinking about it than you would imagine. Still, we do need to keep reminding ourselves that not everybody even knows what social is.