Social Media has no ROI, the same is true of cars.

A lot of professionals are trying to understand social media… the benefits, pitfalls, investment, and results. People want to know they are doing it right and they HATE doing it wrong.

Here are two different case examples from this month to put the problem into perspective.

EXAMPLE ONE: I am presenting on social media ROI to an audience of  experienced and executive level professionals. Three different people basically said “I don’t see the benefit of marketing on Twitter, therefore social media has no benefit”

This would be the same as “I don’t see the benefit of driving a BMW, therefore cars have no benefit.”
It is the common need for people to categorize things they do not understand.

For the most part, we take for granted that everyone in the United States understands cars, but if you ask residents in Manhattan you may actually hear that “cars have no benefit.”.

You can also hear that “cars don’t have benefits” in many third world countries.

If you don’t have experience with cars or have never had someone educate you on the types of cars, it is probably a fair to assume that you must make observations about what you see.

If you live in Manhattan all your life, you could easily come to the conclusion that cars simply smell bad, cost a lot of money, and are really hard to find parking for (at least that is what you’ve heard.)

If you live in a third world country, you could easily come to the conclusion that the shape of a car is purely cosmetic, that they are noisy, and that people who drive cars must be lazy because they could just as easily walk.

Social Media is often categorized like this.

For a business mindset, the merits and flaws of tools must always be compared to the knowledge and creativity of the person using the tool. A hammer in a child’s hand is a risk, a hammer in a china shop is probably a bad idea, but a hammer in the hands of a carpenter can create a masterpiece.

EXAMPLE TWO: I organize several events in the social media niche. In the past thirty days, I decided to make my default networking introduction lead into the conversation of social media ROI. I wanted to know if professionals I was speaking with thought there was positive or negative ROI. I tracked the results on my mobile phone to help quantify my personal feeling that even in social media groups, professionals are having an extreme difficulty with the topic.

I  had 42 people in marketing/communication roles say that “social media marketing” really didn’t have good ROI.

The top responses for bad performance (multiple reasons allowed)

  • lack of understanding (11)
  • executive failure (10)
  • poor framework (10)
  • inconsistent results (10)
  • “me too” mentality (9)
  • no internal support (8)
  • confusion (6)

An important answer that was at the top of the list was “executive failure.” Which was the category of answers that indicated the main problem with

The top responses for good performance (multiple reasons allowed)

  • Flexibility (4)
  • Affordable (3)
  • Niche opportunities (3)

While the “good performance” answers only came from 5 individuals, all of them had very like-minded answers and displayed a notable personal demeanor of “I get this stuff and I’m not scared to learn more.”

When stating an answer to ROI, I asked them to follow-up by defining what social media is:

37 of the 42 (88 percent) could not reasonable identify or expand upon the idea of social media beyond the buzz statement “it is like Facebook and Twitter stuff.”

100% of those who could not discuss the concepts of social media generated 100% of the “poor ROI” answers.

Conclusion: if 88% of professionals claiming social media has poor ROI have a problem defining what social media is, how in the world could we imagine they know how to measure ROI?

In comparing both case examples, it is very clear to me that the root problem of positive social media ROI is not a lack of capability, but a lack of understanding what the capabilities are.

If you are in the Seattle area and would like to learn more about social media, please come by and visit Social Media Club Seattle – where hundreds of professionals are learning more about social media. (Disclaimer, I am on the board of directors for SMC Seattle), read more on my personal blog here, or visit the 123SocialMedia blog where I share many other insights.