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Return on investment from social media?

Step forward, please, the social media alchemist who has struck gold…

The leading voices in social media practice and debate are certainly giving it their best shot: Brian Solis’ recent guest post on Mashable paints a daunting picture of senior executives’ views on ROI from social media, including the bar chart below lifted from a study by Bazaarvoice and the CMO Club.

In short, the marketing decision makers remain unconvinced; so, if selling social media is the way you’re aiming to pay for dinner tonight, be prepared for a light salad rather than roast beef.

Solis suggests that measuring social media ROI in 2010 will hinge on real business metrics, such as revenue, rather than the nebulous numbers offered by volumes of followers on Twitter.

Though it’s been around for a while, Oliver Blanchard’s take on the ROI question (presentation below) still hits the spot, although the influence of other elements in the marketing mix make it difficult to evaluate the effect of social media in isolation.

Olivier Blanchard Basics Of Social Media Roi

View more presentations from Olivier Blanchard.

In our experience as a business using social media for our own purposes, as well as advising clients on theirs, there is a significant investment of time in order to make it work. Equally, the definition of a “return” has not been limited to pounds and pence, though that is the ultimate objective.

So what has been our return from social media? In its purest, measurable form of generating income, we have developed an ongoing relationship with a blue chip company that began with an exchange of views on this blog. But there have been other returns too, that oil the wheels towards our destination.

This has included using social networks to develop new contacts in a range of fields whose knowledge we have been able to call upon when pitching for new business. Through listening to networks such as LinkedIn, we’ve been asked to quote for work, opened doors with decision makers where they otherwise may have remained shut and we’ve fostered true partnerships with our suppliers by providing recommendations and referring them to opportunities spotted online. Monitoring Twitter has helped us to protect and enhance client reputation, especially when influential people on the network have a grievance.

Granted, none of this is a guarantee of instant, financial success. But would we rather have it or not have it? In tough times (and, let’s face it, one measly tenth of a percentage point growth doesn’t make for a recovery) every tool in the new business box has to be sharpened, and social media is now one of them.

To borrow from Solis again, “Defining the “R” in ROI is where we need to focus, as it relates to our business goals and performance indicators specifically”.

In business, the “R” is beefing up the bottom line. But there’s more than one way of getting there and building a presence within social media can mean you leveraging a little help from your friends.

“Hungrier, less complacent and more willing to embrace new media” for business.

That’s just one view why the US’s fastest-growing private companies - The Inc.500 - are giving the Fortune 500 a beating in terms of social media uptake, including use of blogs, online video and podcasting.

The findings come from what The University of Massachusetts Dartmouth claims to be the first statistically significant reseach into the use of social media in companies.

Comparing last year with this, 11.6% of the Fortune 500 have a public blog against 39% of the Inc.500.  Only 3.6% more of the largest US corporations joined the blogosphere in the period, while 20% of private firms signed up. Now, nearly half (44%) of the Inc.500 companies reckon social media is “very important” to their marketing/business strategy - up nearly 20% on last year.

So, what’s bugging the bigger beasts in the forest about social media? And if this is the case in the States, where does that leave the biggest UK companies? The topic surfaced at this week’s Social Media Cafe launch (#smc_mcr) in Manchester, where it was agreed that large businesses tend to baulk at what they see as the uncontrollable world of social media.

Craig McGinty, with typical candour, told the assembled bloggers and social media-ites at the #smc_mcr: “It needs someone with the cahunas to get things going. But that means taking small steps, dipping their toe in and using a small team which can begin to feel comfortable with it.”

This suggests that despite the fears among gatekeepers, lawyers, compliance departments and whatnot within the larger organisations, the communications world is moving that way and companies run the risk of being left behind. 

The new media world of Manchester’s bloggers came face to face with 140 years of newspaper heritage at the Manchester Evening News (MEN) last night.

But even a paper that began life in a “dingy office in Brown Street” has had to change with the times. Now housed in shiny offices, the decor is not the only thing that’s changed.

Assistant news editor, Paul Gallagher, explained how the MEN’s print, online capability and tie-up with Manchester TV station, Channel M, means that decisions on news are very much based on its suitability for the medium, though the paper tends to time the release of online news with the hard copy, so not to compete with itself.

What’s also changed is the way content comes together, combining old fashioned news hounding with readers’ online comments, video taken on reporters’ mobile phones and the work of citizen journalists. As Paul says: “The benchmark for a good story hasn’t changed. But you just have more people contributing to it.”

And the days of the “death knock” - visiting the homes of the recently bereaved in search of a story and, vitally, a photo - may be numbered with newspapers like the MEN turning to online tribute sites for the material they need.

Head of online editorial, Sarah Hartley, described the paper’s move to greater online content and gave a sneak preview of the live blogging and Twittering planned for the Labour Party Conference in Manchester, which starts this Saturday in Manchester.

Still, it was great to see some relics from the past remain, such as the MEN’s hard copy reference library (see pic).