It happens all of the time. Regardless of the group, association or company that is asking to either meet for business development or a speaking opportunity – every group wants to know if I can create an equation that defines the ROI of social media. It’s awkward enough going down the path of trying to define “social media” versus a strategic online environment with a complimentary marketing campaign.
So what is the ROI on Blogging, Podcasting, Twitter, Second Life and every other online tactic that people are lumping into the term “social media”?
Let’s trade. I’ll give you the ROI of social media, if you can return back the ROI on trust. Fair deal?
I was just reflecting on PodCamp Toronto and the session by In Over Your Head and Listen To Your Kids host, Julien Smith, who along with PodCamp co-Founder and Network2 community developer, Chris Brogan, presented: Trust Economies – What They Are And How To Be A Part of Them. It was one of those presentations that has nothing to do with becoming a better Podcaster, but at the same time has everything to do with it.
Here’s the crux of it: if you’re not building community based on trust – providing value, being open and transparent and giving equal voice to all, your Podcast (or community… or brand) won’t last all that long in this day and age where we are all connected.
It’s deep. It’s powerful. It’s true. It also takes a lot of time to develop – and that’s where Marketers get scared off. It’s not something that can happen in a quarter. Truth is it can happen faster or it can take years to build.
Maybe the equation is simpler than any of us thought? Could be it be as simple as:
Trust + Community = ROI?
There are some strategic calculations that need to take place at a micro level for this macro thought to take effect. I’m not naïve. I understand. But there is a philosophical thought here: if you’re worried about pushing product and not about building your community, your brand lifespan is going to be dramatically affected.
ROI is Return On Investment. How much are you willing to invest in building a trusted economy and community around your brand, product and services?
Trust Economies – The New Marketing ROI
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Mitch having been writing an ROI Marketing column on ClickZ for over 6 years; I think this is a valuable question. I think there is one piece to the equation you present that might be missing:
Trust + Community = ROI?
I think Experience (Trust + Community) = ROI. Trust is what brings people to you. Experience is the value you share. Community is what you get when you deliver on both the trust and experience you promise and others want and enjoy sharing it. Experience is the multiplier; if you provide a negative experience your trust and community erode. If it is positive, it will continue to grow.
I’ve been bouncing some similar ideas around since PodCamp, but I am stuck on the valuation part. You’re equation looks good, but is meaningless until we can measure it. How do we value an implicit thing such as trust, and how do we assign a weight to it for each inidividual? Each person will have a different valuation of our trust, and the aggregate value will fluctuate like stocks do… I’d like to visualise that measurement. On the filpside social currency/captial, is an abundant resource that does not suffer from the scarcity of monetary currency, so I believe return on investment is not a suitable term or metric in this situation… unfortunately I’m still trying to come up with an alternative.
hey mitch,
ryan jones from p&g here. the roi discussion about social media is challenging for a lot of larger businesses because it all seems quite fragmented (thousands of podcasts/blogs, etc.) at the moment and it seems to take time to get the scale you need to “move the sales dial”. so, despite the fact that everyone knows social media is valueable, they just seem to shrug shoulders and say…i will wait until these tools are more “mass” & can really get me some reach before using them. would love to get the roi discussion going on six pixels.