Three years or so ago, if you went to a social media conference you probably heard this debate:

We can’t measure social media ROI.

We must measure social media ROI.

Well then, what is the ROI of social media?

What’s the ROI of answering the phone?

What’s the ROI of playing golf with a customer?

The debate continues today. When Gary Vaynerchuk asked, “What’s the ROI of your mother?” he wasn’t seriously suggesting we shouldn’t try to track the value of our social media activities. Yet the concept of social media measurement can still raise a significant amount of debate and even ire.

Why?

Social media, like other technologies including email and the Web itself, grew out of a sincere desire to create a better way of engaging and communicating and sharing. And then, depending on who you talk to, the marketers came in and messed it up. There’s no doubt that social media has changed significantly and that the involvement of brands and the sharing of marketing and corporate messaging can still be more than a little heavy handed.

But for those of us who believe social media can truly make corporate communication better, more engaging, more personal and more relevant, these are growing pains. Even so, for some people the idea of tracking social media activity to a bottom line result is still anathema.

The topic can be controversial inside organizations because it can raise other uncomfortable questions. Imagine a meeting of marketing staff where the CMO looks at the Director of Digital Marketing or the Social Media Manager and says, “What’s the ROI of our Twitter activity?” Now imagine how that conversation goes when the Social Media Manager responds with, “I don’t know. Why don’t you ask Larry what’s the ROI of all the signs we put up in airports?”

We hold social media to a standard of measurement that we often blithely ignore for our other channels. But that’s not an excuse.

Perhaps because social media engagement takes place online, many people (possibly your boss) have come to the conclusion that measuring its impact on the bottom line should be easy. And what marketer or analyst, when confronted with the question “What’s the value of what you’re doing?” feels comfortable responding with a blank look and a shrug?

We’ve come to a point in enterprise social media where the expectation of ROI measurement inside many companies has grown out of proportion with their knowledge of how to track it. Yes, you can (as Katie Paine would say), but it takes work to break it down into chunks and see how it flows through to a conversion.

And that brings us to another area of potential controversy. What exactly are you trying to measure? When first starting out, most companies begin by measuring the raw numbers: total number of fans or followers, number of retweets, increase in engagement. Those are good numbers to track, but what’s the value of a Facebook fan? If you spend $1000 in time and money and get 1000 new fans, was that worthwhile? It depends. Are you selling gum, or industrial equipment? Until you know the value of a fan (and the value of a customer), you’re leaving out an essential element of the equation. Brian Solis does a great job of explaining this in his post about measuring ROI.

Furthermore, what is a “conversion” for your business? Many marketers track their social media activity to the point where they can see its impact in driving traffic to the website, for instance, but that’s where it ends. Controversy can build inside an organization when one group thinks they’ve proved the ROI by showing an increase in page views, when what the CMO really wants to see is how it affected the bottom line. Great, they came to the website. Then what did they do?

The good news: Those same social media conferences where three years ago we were debating if we should track social media ROI are now showcasing case studies and best practices about how to do it. Just look at CRM Evolution and MarketingProfs, for instance.

If you’d like some examples of how to make your social media activities trackable and measurable, check out the Radian6 eBook, The Future of Analytics.

Are you still finding the topic of social media measurement controversial?  How are you dealing with it?

Tags: Brian Solis, CRM Evolution, Gary Vaynerchuk, Katie Paine, MarketingProfs, roi measurement