As a finance director, I know money. I know budgets. I know allocations. I know how to tighten the belt during a tough economy. I know how to keep the kids in line when the economy picks up and the money comes back in. (Kidding, co-workers, kidding! You’re all very mature adults who would never run out and buy an iPad on impulse and claim it as a research expense. Right?)
I also know that all budgets need ROI evaluations. So how would I evaluate the ROI on a social media budget? Is there even any way to do this?
Fortunately, I work at Big Fuel, so I’m familiar with active social media programs and understand the need to budget for them. And of course, I have close access to the social ROI experts here to help me wade through the metrics. But every time we pitch a new program, we have to trust that our clients understand the social media budgeting process as well. Fortunately, we work with great clients who do “get it” and are anxious to explore the new social media landscape. But all contracts have to make it past the gatekeepers, namely executives and accounting departments. And as a fellow gatekeeper, I can certainly understand their concerns. After all, Facebook is for looking up high school crushes and playing that farm games, and you want how much money to spend on it? What’s the ROI?
And there it is: “What’s the ROI?” That’s the most difficult question in the growing social media market, especially as more and more companies realize the need for an integrated social media strategy. But, as Brian Solis explains in his article, “The Maturation of Social Media ROI,” many executives still believe that there is no way to measure the impact of social media campaigns. Solis writes:
I believe this is the direct result of a disconnect between social media activity and a clearly defined end game. We must establish what we want to measure before we engage. By doing so, we can answer the questions, “what is it that we want to change, improve, accomplish, incite, etc?”
By defining the campaign goals and evaluating the current marketing avenues, it often becomes clear that social media is the best route for communicating these initiatives. Executives are realizing this more and more every day, but still need a clearly defined and generally accepting standard by which to measure the effectiveness of such social media campaigns. Solis believes, “In 2010, CMOs will seek to establish a connection between social media and business goals.” The connection is visible- now we just need the metrics by which to evaluate it.
It’s become clear to everyone (even to my fellow purse-string holders) that room needs to be made for social media strategy budgets. Executives and accountants, I feel your pain. I know it’s difficult to approve what may seem like a risky budget when you can’t firmly evaluate the ROI. But as the social media landscape matures, so do the metrics and the benchmarks. Soon, we’ll be able to evaluate the ROI of social media campaigns as easily as the ROI of purchasing a new laptop. For now, we’ll have to make do with the impressive early results. And no, you can’t have that new laptop.
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Social Media Budgets and ROI: The Ongoing Struggle – [link to post]
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