Insurance in Plain English

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Posts Tagged ‘return on investment

ROI: Ridiculous, obsolete idea?

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Shame on me. It’s been a week. I blame a lot of things, not the least of which was the shock associated with the LOST series finale.

This interview of Ryan Hanley (a fellow resident of beautiful Albany), conducted by Peter van Aartrijk and Rick Morgan, got me thinking about one of the topics du jour in social media, the search for return on investment.

According to Ryan,

Everyone says, well, what’s your ROI? At this point in the social media movement, to try to slap ROI on it and make a business decision is going to be tough to do. Because it’s hard to calculate.

Don’t I know it! How can I provide quantified, tangible results explaining how valuable my organization’s Twitter accounts are? How can I create a correlation between our LinkedIn groups and sales? How do I explain that no, I’m not just fooling around on the ‘net, I’m actually building relationships? It’s not easy. Heck, it’s pretty close to impossible.

Well, all this talk about ROI made me nostalgic. For the past six months, I’ve been immersed in my (finally completed) master’s thesis, AKA the bane of my existence, which focused on measurement in an area equally as intangible as social media, public relations. Think about it: How do you measure reputation? How do you measure client perception?  Same issue.

A bit of self-plagiarism, and the complication of measurement is clear,

With sales, one can measure end-of-year figures against a set of objectives at the beginning of the year. But public relations is much more nebulous; how can you measure the goal of increased visibility and awareness? How can you track all the instances that a consumer recalled your brand as a result of some positive press he or she read in the local newspaper? Such black-and-white, A-to-B type measurement is not just impractical, but also, nearly impossible to conduct in this field.

While my very own words seem to echo the advice of those who say we need to look past ROI, I don’t completely agree. Measurement is still important.  It helps to determine if our efforts were effective and to decide which strategies to keep, which to trash. It makes us more reflective, and, ultimately, better practitioners. As one scholar put it, “You can only manage what you measure.” But, I do think that today’s measurement techniques need to be different than what we’ve relied on in the past.

So what do you think? Is the concept of ROI in public relations and social media as outdated as the betamax?

Coming soon … well, smarty pants, how DO we measure reputation? Stay tuned …

Written by melissa

May 27, 2010 at 3:31 pm