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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.

Sorry Twitterfolk, our secret’s out now.

What was - in Facebook terms - very much a worldwide minority pastime is now gracing the pages of Times2.

Though unconvinced by Facebook or - to be precise - its “status update” function as counter-intuitive behaviour for uptight British people, journalist, Sathnam Sanghera,  is now addicted to Twitter. He says: “The banal thoughts of complete strangers are surprisingly comforting and compelling: it’s like following a thousand mini soap operas”. But when he quotes a Twitter user, @foodiesarah - someone I know personally - I realise how small Twitter world has been.

But elsewhere, the migration to Twitter is not being welcomed. Writing on web news site, Mashable, Dr Mark Drapeau is keen to see brands banned from Twitter altogether. He questions whether “one dimensional organizational brands” fit with the Twitter way of working, and concludes they don’t. As he rightly points out, people on Twitter want to talk to real people who use a recognisable identity and photo or avatar, not @DunkinDonuts.

I recently posed the question  - in response to Jeremiah Owyang’s blog post on HP Labs’ Twitter research - about how businesses could work with Twitter, as we have pulled Twitter-based ideas from PR proposals for being inappropriate to the social medium.

And that’s something that businesses should be willing to do before they feel the chill wind of Twitter derision wafting their way, which can’t help but spread online. Social media may be the latest thing, and highly tempting for organisations to get involved in. But don’t dive in without testing the water first - or getting good advice about what might be lurking below.

Pic credit: humble thanks to Rob Cottingham at Noise to Signal for use of the most apt cartoon.

Figures from Nielsen Online reported on Mashable show Twitter to be taking off like nobody’s business, with users growing 422% on last year and sticking around on the site for 7 minutes on average (a veritable lifetime online).

Still, Jeremiah Owyang refers to this (unsurprisingly via Twitter itself) that in the context of social media networks, Twitter’s 2.3m users is small beer when compared to the hulking 100m registered Facebook users.

So, as a Twitterer myself, I now know what it feels like to be in an official minority and a growing one at that. Makes you want to pick up a placard and demand your rights!

 STOP PRESS: Robert Scoble (again, on Twitter) says he’s seen Twitter “all over CNN”.