The Social Media ROI Challenge: What it Really Means (and 7 Related Faulty Assumptions)

This post offers a different perspective on the social media ROI (return on investment) challenges put forth by organizational leaders and other experienced professionals who resist increased digital engagement. Playing off the ROI acronym, it provides alternatives for interpreting the ROI argument. It then articulates – and counters – seven assumptions on which the resistance arguments are often based. The post concludes with a call to move away from specious arguments and to balance concerns about ROI with the equally important COI (cost of inaction).

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Last week I wrote a post for the Digital Era Thinkers Blog entitled, “12 Hopes for 2012: Enhanced Adoption of Digital Technologies.” Recognizing that technological advances continue to outstrip our willingness to address the opportunities and challenges they present, the post focuses on the psychological challenges we face and our individual and collective ability to tackle them in thought, word, and deed. 

In the post, I expressly stated that I wanted to focus on the positive rather than the negative. But after I shared the post, I got some classic pushback in a response from a person who runs a company that provides management and leadership training. She wrote, in part: 

We are constantly asked about the time/value, pros/cons, and cost/benefit of social media. These folks who ask barely have time to do everything they have to do for their jobs, let alone figure out the most effective way to use social media. We network and ask those we trust what we can use (and tell clients to use) to get relevant info quicker, faster, better. The key word is RELEVANT. The vast majority of social media is full of useless, time wasting verbiage that lacks filters. The key to figuring how to best utilize the best of it and get rid of the worst of it, would be some form of easy to use, customized and targeted data mining. Until this comes to the fore I don't see how it can provide the ROI on a leader's or executive's time. I am sure that most people in busy jobs feel the same.

 

ROI is Code for...

I've heard these - and similar - arguments more often than I can count. In my experience, when organizational leaders and other experienced professionals talk about the ROI of social media, they’re not just referring to Return On Investment. ROI, in fact, is often code for: 

• Ridiculous Online Indulgence. In their disdainful dismissals of social media, people still highlight the (over)abundance of vapid and banal social media activity (e.g., people sharing what they had for lunch) and characterize the people who engage in it as shallow and narcissistic, with too much time on their hands.
• Real professionals Only Interact in traditional ways. There is a clear bias among many professionals toward how things have “always” been done. Email, the phone, and in-person exchanges are seen as inherently superior to digital ones. More importantly, the different types of exchanges are viewed as mutually exclusive rather than integrated and complementary.
• Resist Out-of-the-box Ideas. In spite of all the media hype surrounding social media and digital technology, people are not particularly quick to adopt – let alone embrace – new ideas and thinking.
• Reserving Our Interest/Investment until we see what others do. And for better and worse, most senior professionals tend to follow more than they lead. Though there may be a strong desire to “keep up with the Joneses,” very few people actually want to be the Joneses.
• Risk aversion Over Innovation. Even when they recognize that they probably need to move forward, fear – of the unknown, of failure, of unintended consequences – holds them back. The risks of engagement are always clearer than the risks of inaction.
• Respect Our Idiosyncrasies and Inconsistency. If pressed, leaders and other experienced professionals would have a hard time defending their negative positions on social media and other digital technologies, especially relative to other positions and decisions. But many of them seem to expect others to accept their arguments at face value and not question or challenge them.

 

7 Faulty Assumptions Underlying Resistance

Generally speaking the resistance arguments contain a number of implicit - and often faulty - assumptions, including:  

1. Social media technologies – particularly the public platforms like LinkedIn, Facebook, Twitter, YouTube – represent the complete range of digital technologies available today. 

• Today’s digital capabilities are far greater than most people realize – and they’re expanding every day.
• People need to think about both hardware and software. When it comes to software, they need to think beyond specific platforms to the tools and technologies that comprise them.

2. Organizational leaders know the ROI of current practices for marketing, branding, selling, etc. - and it's good. 

• The links between many current practices, such as advertisements and trade shows, is difficult, if not impossible, to measure.
• The costs of traditional approaches can be much higher than comparable digital efforts. 

3. Current communication and collaboration practices are efficient and effective and cannot be improved on by leveraging new digital technologies.

• The limitations, challenges, and frustrations of email are well-known.
• Many in-person meetings are considered an avoidable waste of time.

4. It's appropriate to hold new practices - particularly new digital technologies - to higher standards than existing practices.

• People need to be willing and able to critically examine current approaches. There should be no sacred cows.
• The relative value and utility of different approaches should be determined based on a fair assessment.
• It’s unrealistic to expect any approach to working to be “drag free.”

5. Leveraging new technologies requires adding them to rather than integrating them with or substituting them for current practices.

• We should all be open to identifying ways to work smarter, not just harder.
• The best approaches to achieving goals/objectives should be pursued.

6. It will all settle down (or maybe go away?) at some point, so why bother engaging and suffering through all the chaos before it does.

• The only constant in the Digital Era is change. Expecting things to settle down is unrealistic.
• By the time the laggards choose to engage, it could be too late. At a minimum, they will have missed out on a number of potentially great opportunities.

7. It's better to wait for a "silver bullet" solution than to invest in the necessary hard work now to climb the required learning curves and lay a foundation for future success.

• As in other aspects of running an organization, there are no silver bullets.
• Success in the Digital Era requires a new mindset, as well as new knowledge and skills. Learning new ways of working is unavoidable.  

 

Let's Get Real

I'm perfectly fine with any individual or organization deciding not to take more advantage of the digital capabilities that currently exist, as long as they make an informed decision. In my experience, however, that's generally not the case - and when it comes to organizational leaders in particular, I would say that they're neglecting their fiduciary responsibilities by not making a stronger commitment to understanding the new realities in which their organizations operate so they provide the proper guidance, both strategic and tactical. I recognize there are a ton of good reasons why many people haven't done more with digital technology to date, but those reasons - which are anchored in the past and the present - are lousy excuses for not giving greater focus to the future. 

As a practical matter, digital  technology is only going to continue to advance, and the longer people wait to understand and embrace it, the more risks they take with respect to creating and maintaining their own success. In addition to being concerned about the ROI, in other words, they should also be thinking about the COI – the Cost Of Inaction.

As always, I welcome comments and questions.

- Courtney Shelton Hunt, PhD

 

Related resources from the SMinOrgs Social Media Primer

• Part 1: What is this “Fire” of Which You Speak?
• Part 1a: What is Your SMQ (Social Media Quotient)?
  • The Revised Quiz
  • Updating the Quiz
• Part 2: The Juggernaut is Bigger than You Think!
• Parts 1 and 2 Updated: Revisiting the Fire and the Juggernaut 
• Part 3: Reality Check – Four Mental Shifts Organizational Leaders Need to Make
• Part 4: Ante up! Organizational Factors Relevant to Joining the Social Media Game
• Part 5: You Can’t Outsource Leadership
• Part 6: Human Capital Management Challenges 
• Part 7: The SAPLING Approach to Leveraging Social Media
• Part 8a: It’s a Brave New World … Even if You Want the Old One Back

 

Comments

[Richard N. Landers]

For the record, there are times when ROI derived from social media can be measured: http://neoacademic.com/2011/11/22/new-research-links-social-media-marketing-and-purchase-intentions/

[Courtney Shelton Hunt, PhD]

Thanks for your comment and sharing your post, Richard. It is true that in certain circumstances the ROI of social media can be measured, but - as with many other activities in which organizations engage - it is not always possible to directly connect results with efforts. Many leaders use that limitation as a reason to not pursue social media engagement (the best defense is a good offense?), and I was focused on countering that position.

[Stephen Wunderli]

The demands for ROI grew out of the poor economy and managers' panicked reaction/CYA attitude of having to prove their worth. Numbers are easy to understand, plus and minus are easy to understand. But the real worth of all communication is creating and sustaining loyalty...to a product, yes, but more importantly to an ideal or cause; that's when the passion sets in and no matter the cost you can't pry the disciple away. Time for Social Marketing to be viewed as more than an online coupon.

[Courtney Shelton Hunt, PhD]

Great points, Stephen. I often make the distinction between the long term and short term views of social media engagement. Short term, campaign focused activities are relatively easy to measure and assess in terms of ROI. Longer term activities, which tend to focus on things like brand development and loyalty, are much more difficult to measure and assess. But that doesn't mean they shouldn't be done...