The Truth About Social Media ROI (and why Facebook isn’t enough to deliver)

I recently found myself in a heated debate on Twitter about the ROI of social media. In one corner sat those promoting ‘there is no return on social media…yet’ and in the other sat myself insisting ‘it’s not only possible, it’s happening.’

The skeptical side of me wondered if those who are promoting the ‘no ROI from social’ stance are those who are truly generating ‘no ROI from social’ and are perhaps looking to substantiate that result. But then again, maybe I was wrong. After all, there were some pretty smart people in that opposite corner publishing blogs on Huffington Post and ClickZ – all reaffirming the belief that Social ROI does not exist.

But after further consideration and more research, I’m sticking to my guns. Social media ROI is not only attainable, it should be expected. The harsh reality is that most business executives measure value in terms of financial metrics – not fans. While it’s true that the long-term benefits from real engagement through social media will likely be far greater than any of us realize today, it’s also true that many companies are positioned to start delivering financial returns now, particularly strong CPG brands.

The game will change in 2011
For most CPG companies today, ‘we need a social media presence’ means Facebook and Twitter. Although deeply simplified, this strategy plays out a lot like this:

  • How many fans do we have? Hooray!
  • How many are following us? Hooray!
  • How many times is our brand mentioned on the social web? Hooray!

By all accounts, the results exceed expectations. But while you’re patting yourself on the back for attracting a social following, understand there’s someone within the company scratching their head and asking: So what? How is this investment bringing me any value?

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