More on Measuring Social Media ROI

I came across this amusing presentation on Slideshare on measuring the ROI of social media. It seems that everyone has something to say about this topic, including me here, here and here,  but this one is very unique… and fun to watch.

It’s point is that you cannot measure the ROI of social media by just looking at social media data. The impact social media can make on a business can be significant, but it is non-financial. One of the classic comebacks in the social media ROI debate several years ago was “how you measure the ROI of putting on your pants?”  (The funny thing is that this golden oldie surfaced again in an AdAge article just last week so I guess it’s getting a second wind.)  The idea is that interaction with prospects in social media… and putting on your pants… are all critically important to the outcomes you achieve in your day, but you cannot arrive at an ROI by analyzing that activity alone. They are important precursors to the business transaction where the financial impact of the transaction occurs.  This is the only point where ROI can be measured.

Any time a prospect has an interaction with you directly (sales meeting, walking into a store, submitting a resume online) or indirectly (viewing a positive mention in the media, receiving a recommendation from a colleague, reading a review on a blog) they are moving towards a purchase decision.  The presentation below suggests that you overlay business data like sales and sales growth trends on a timeline of your key social media activities to establish a baseline of results.  From there you’d analyze the behavior of your non-transactional activities to identify patterns that point to increases in sales and transactional activity.  We can do the same thing here in recruiting.  Instead of sales data, you can map trends in the number of hires, costs per hire, and time to fill to determine an ROI for the use of social media to support recruiting.

Here is that Slideshare presentation from Oliver Blanchard at the Social Fresh conference.