Compared With What?

I always like it when someone poses the ROI question in discussions about the social web - 'What's the return?'.  Recently, I have found myself responding by asking, 'Compared with what?'.  This may sound like a clever-clever response but it isn't meant to be.  There has long been a sense of what different aspects of the marketing mix are good for.  PR is good at explaining complicated messages but its value is really difficult to quantify.  TV is the big blunderbuss that gets across the banner headline but the metrics look increasingly creaky when justifying its price.  DM is a good way to build data and customer profiles that can drive action but it has a junk problem, especially in the recycling age.  Sponsorship builds good long-term recognition but can be a very expensive tactic.  Print can be targeted and deliver wonderful visuals but isn't terribly interactive.  Search is great value but doesn't build brands.  Radio is relatively cheap but (obviously) isn't visual.  But social media hasn't found its place in that intuitive ranking system because it's new and in flux.  And my question is intended to define the role of blogs, video sharing, communities and social networks in that broader context.  One obvious but very big difference is that most marketing tools have an established metrics system based on media effectiveness.  However, social or networked media doesn't have such a system because it's not about measuring media.  It's about measuring the interaction between people.  The irony here is that measuring social media is very easy to do in practice, but very difficult to do in theory.  On the modern web you can see if people are interacting with you through analytical tools that interpret what is happening in real-time, or just by counting how many people are talking to you and seeing what they are saying.  For instance, it's really easy to see if a blog or online community is popular or not - and with who - by looking at the comments or seeing who is linking to it.  However, this approach doesn't really fit in a theoretical conversation such as, 'If we invest in this media plan we will reach x percentage of the demographic over this period of time which means a unit cost of y'.  Which is what most mainstream media does.  We all know blogs, communities, forums, social nets and other networked media are very real in practice. But they're invisible in theory.  Which makes people's heads hurt.  I'm sure the area will develop its own place in the intuitive marketing armoury over time.  But only if people continue to ask that ROI question.

Comments

[Rory MacDonald]

Do you think that web 2.0 exists as _a_ media?

Are "blogs, video sharing, communities and social networks" one single entity?
Isn't this like grouping: PR, print advertising and DM under the banner of "things on paper"?

Just a thought.

As for the metrics, I think the PR analogy is perfect. For years, I can remember people trying to put ROI figures on PR to the extent that it got in the way of doing PR properly. How do you measure the value of a relationship?

Now people just seem to accept PR, when it is done well, as a very cost effective tool and they concentrate on that, rather than trying to measure ROI.

Measuring ROI on intangible assets is like city-boys putting exact figures on debt default risk: it works sometimes, but when it goes wrong .......

Sometimes it is better to just be straight with people and say, the way to measure the value of PR or community based marketing is using your intuition. Marketing managers can always play safe and hide behind an accountant, but leaders sometimes run with their instincts.

[James Cherkoff]

Hi Rory, I don't if Web 2.0 really can be considered a media, but I think we can lump together "blogs, video sharing, communities and social networks" as tools from the same box.

Measurement has indeed always been the achilles heel of the PR industry. However, everyone is clear about the potential outcomes eg story in national or influential press, contact with government and discussion about policy or people showing up for an event. Social or networked media doesn't have those intuitive benefits as a marketing tool - as yet.

If I had to guess, I think community building will be a key marketing skill in coming years and that those communities will be evaluated using all the traditional markers eg magnitude, frequency and sales.