Wherefore art thou social media ROI?



As some of you may know, my first set of pieces for Memeburn dealt with the issue of ROI, of how it can be assessed, measured and if it’s even measurable at all.

I recently stumbled upon an article from John Heggestuen, who is a research analyst at Business Insider. The man is smart, like silly smart, and raised a terrifying statement that I feel like I am only now starting to understand. Now, I hate sweeping statements and I very much dislike people who have uninformed opinions on matters beyond their understanding. Heggestuen does not and has neither.

He stated that “some companies are starting to drop the idea that they can track social media’s dollar value”, which, when coming from the likes of a regular Business Insider commentator, you listen.

ROI Sucks

The study looks at many insights from various sources, noting aspects such as:

  • What proportionality of your marketing budget will you be spending on social media next year, in two years and in five years?
  • What do you believe is the single most important platform for your brand?
  • What do you believe the benefits are for using social media to market a brand?
  • What are the ROI related metrics in social that you believe are most pertinent to your brand and brands alike?
  • What causes the changes in the percentage of the fans you reach on Facebook?
  • What analytical tools are you using to measure your brands performance in social and what are the best tools to measure the performance against business objectives?

As you can see, it’s not the easiest set of questions to rattle off answers to, especially when, as a marketing type, you’re expected to know “everything about Facebook”. Why is all of this so disturbing? Well, here’s a little tit-bit from Cooper Smith, another regular Business Insider Analyst, who states that many large, consumer-focused companies globally don’t measure social media ROI. I know, right?


Apparently, in North America, nearly half of large B2C companies don’t measure social media ROI at all and in Europe a 52% majority don’t measure at all. Those who do, reside in the Asia-Pacific and Latin American regions where a positive result is more common than not measuring it at all. He goes on to state the following:

  • Fifty five percent of companies based in Asia-Pacific said their businesses have realized positive returns on their investment in social media. Only one-third said they do not measure ROI, and only 13% say they see negative ROI.
  • Forty one percent of companies in Latin America reported positive returns on social media, while 28% said they do not measure it, and 31% reported negative ROI.
  • In North America and Europe, more companies do not measure social media ROI than those that do. Although in both regions, companies measuring ROI tend to see a positive return. (These findings were based on Tata Consulting Services, which surveyed 655 representatives, mostly from consumer-focused companies with US$1-billion or more in revenue.)

Bit of a mixed bag, if you ask me. But, what does it all mean? Well, the crux of the analysis — and I could go on here — is that it feel like the stringency in which social media is analyzed here in South Africa could be for naught, bru. At least, that’s the feeling I’m getting.

Sure, it might not happen all at once, but as the core focus for social media globally moves from attempting to funnel and convert to more — dare I say — realistic metrics such as an increase in consumer awareness and brand affinity, consumer sentiment and towards building a better understanding of consumer trends, isn’t it time that we all started… getting along? I kid. But not really.

The real reason I raise this issue relates back to each piece I wrote on the subject and which I echo again, if you aren’t prescriptively closing the conversion loop within the social media environment then – I’m sorry to burst your bubble –but you’re doing a brand building exercise. End of story.



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