I’ve been thinking a lot lately about social media metrics. All the talk from marketing managers is like Cuba Gooding Jr. in “Jerry Macquire.” ~ “Show me the money!” Except, when they ask about social media, the request usually goes “Show me the ROI!”

This is a challenging proposition for me – which is good, it makes me think. However, what I think is that these people are asking us to show them the wrong thing.

ROI stands for return on investment. Let’s take a look at this for a moment. Marketers are asking social media pros to show them that posting on a social platform has made them money. Is that a fair question? Well, yes and no.

Ask, say, Bud Light, to tell you the ROI of one of their Super Bowl commercials. Dear Bud Light, how much did you spend on that 30 second spot? $3 Million? For the sake of argument, let’s say the answer is yes. Dear Bud Light, what was your ROI? In other words, how much business did you drive from that ad? Bud Light’s answer would likely be – well, we don’t know. The reason is that many people see that ad, but they also see in-store displays, get beer recommendations from their buddies, etc. Unless Bud Light says to it’s customers – when you buy Bud Light at the store, make sure to tell the cashier that you’re buying it because you saw the ad – there’s no way to really calculate the ROI on that ad. Plus, when you buy a product, are you buying it solely due to an ad? It’s more likely that you are combining multiple touch-points – Web, ads, word-of-mouth when you make a buying decision.

Let’s look at another example. Let’s say you’re in the “new media” world like me, and you buy an iPhone for your business use. What is the ROI on that purchase? What? You say you can’t be expected to calculate an ROI on your phone? Why not? It’s a business purchase, right? The end goal of a business is to make money, right? How many sales did that iPhone get you? What do you mean “I don’t know?” Can’t you tie that iPhone directly to a sale?

Okay, let’s look at an example that is easier to measure, an email campaign. Businesses spend money developing the email, writing the content, designing the graphic, managing their email platform, keeping the email addresses up to date, etc. You can calculate how all this effort paid off by determining how many people opened the email. Let’s say that you have an open rate of 20%. Sounds like a good ROI – right? Well, that’s just how many people LOOKED at the email. How many people actually bought something from the email? An email marketer might say, well, it was worth it, because off the amount of people that looked – that’s eyeballs on your product.

So now, we’re saying ROI means brand awareness. Then why is social media marketing held to a different standard? All of a sudden, social media pros have to prove that an engaging Facebook page is going to make the company X amount of dollars. But isn’t that just another touch point in an overall marketing campaign, just like the Super Bowl ad, or the email campaign?

Perhaps you might argue the the very expensive Super Bowl ad made the company cool, made people talk, and made them associate the brand with the product. Therefore, the ad was worthwhile.

Exactly. And that’s what social media does so well. So why are we all fired up about ROI? The return on social media is that people talk about/with you. It positions a brand so the customers have a relationship with it. The ROI on social media is that you won’t lose market share to the competitor who is using social media and using it well. It means your business will be around for the long haul. Sounds like a good return to me, no?

But, the bean counters still want a measurement. Okay, we can measure social media, but I believe we should be measuring those key performance indicators – KPI. And that’s the next blog post, folks. Stay tuned.