Tag Archives: roi

the continuing saga of the ROI of social media

(TOTH to David Brazeal.)

David Meerman Scott provides some very useful advice to those of us who often find ourselves asked the Ultimate Question:

What’s the ROI of social marketing?

It’s worth watching.  Check it out.

As he points out at the beginning, there are cynical ways to answer this question, and there are less cynical ways to answer it.

There’s an argument to be made (non-cynical) that many things CAN be measured (and they should):

  • How many people are exposed to your ideas
  • How many have downloaded your content/videos/ebook/podcast
  • How many times have they shared it?
  • How many people are talking about our ideas, our company?
  • Versus our competition? How much of it is positive?  What’s a useful benchmark?

And then there’s the somewhat more cynical:

What’s the ROI of putting on your pants this morning?

There’s no doubt that there is one.  I think you’d see an eventual loss of revenue if you stopped wearing pants to work.  (Results may vary.)

Still: you can’t measure everything in dollars and cents.

Some things you can.  Not everything.

Here’s the direct link to the video.

dear diary: a travelogue for social media

Beth Kanter recently posted on the importance of outcome-based thinking for nonprofits getting involved in social media, and, with Alex de Carvalho, generated a great list of ways to address some of the challenges presented by social media. I’m just going to pull two items out of this list and expand on the theme a bit:

Discuss and set objectives at the outset, and not just quantitative objectives. Figure out what is measurable and be sure to include the systems to track progress. If systems to track qualitative results are not in place, then keep a journal and also be sure to share positive and negative feedback from customers with the organization.

Determine goals first and break them out into short-, medium- and long-term. Don’t get into social media if you’re not planning to stick with it over the long-term.

Objectives and outcomes have to come first. You don’t set out on a trip without knowing your destination — this is the same thing.

Think of it as a journey, and decide where it is you want to go. Then choose the right tool for the job. A day trip to the next city over calls for a car or a bus, whereas a trip across the country with several different stops will call for a more layered approach, involving planes, buses, taxis, public transportation, and yes, even walking.

Once you’ve chosen your tools, picture what success will look like. Include both quantitative and qualitative measurements.

I love Alex’s idea of keeping a journal to track qualitative results as time goes by. This method emphasizes the fact that you will not just be measuring results at the end of the trip, but all along the way as well. So keep a journal on your trip, and encourage any staff involved to contribute. Maybe a nice, inside-the-firewall blog with multiple authors would do the trick.

Think about it for the long haul. Put systems in place for the continuation of your social media use that don’t depend on certain people remaining on staff — add these skills to that person’s job description so that their successors will be chosen wisely, and so that the project doesn’t get dropped when staff changes occur.

This point also backs up why it is important to define your goals and objectives at the outset — what if there is a complete staff turnover at your nonprofit during the course of your social media journey? How will the new staff, board, executive director, understand why you started down this path in the first place?

Document your goals, strategies, milestones, and measurement plans so that your organization maintains a depth of institutional memory about the project. Nonprofits have a famously high staff turnover rate — accept this possibility as a likelihood.

Beth is right –there is a lot in Alex’s list to unpack and discuss how it applies to nonprofits. I’ve looked at two points — what do you have to say?

half the billboards

Tim Davies wrote this post about the ROI of social media versus the ROI of printed materials, which Beth Kanter pointed to here.  It’s an interesting poke into the idea of establishing the ROI of social media, and asks what is the return on printed pamphlets or brochures?

Of course, many brochures, leaflets, postcards, etc, go unread and unresponded to.  A return rate of perhaps 5-7% is, I think, considered decent for direct mail campaigns, depending on the quality of your list.

This got me thinking about something a mentor of mine likes to say, which is that

We know that 50% of our billboards work.  The problem is, we don’t know which 50%.

This is, of course, true for all advertising.  And the 50% part is pretty optimistic, honestly.

A great point that Tim makes is that, unlike a blog post, a brochure can’t tell you if it was read or not.  A brochure hardly ever gets sent back to you with comments on it.  People can’t find your brochure by googling your organization’s keywords. Even if you do have most of your brochure’s content on your “corporate” website, Google is likely going to ignore it unless you update your website’s content daily, like a blog.

Do you want people to be able to find you when they are searching for something like you, whether or not they know you exist?  Google prizes fresh content, and nothing serves up fresh content like a blog.

A blog, of course, is only one form of social media.  But it’s one that most mainstream folks have at least heard of, and have some sort of handle on how it works.  It’s a good first dip into social media, mostly, I think, because the traffic measurements are built right into most blogs.

Some say that you should get social media neophytes started with an RSS feed, for instance by setting up an “ego-search” on the person or organization in question.  This is a good idea, as long as you know that people are, in fact, talking about the person or organization in question.  If not, that might be a less than rewarding experiment that proves the opposite of what you are trying to prove.

And what are we trying to prove?

That there is a conversation going on out here, whether you know it or not.  If you’re not a part of it, you are going to become more marginalized, not less.

The evidence clearly shows that traditional methods of marketing — especially in the nonprofit sector — are fading in effectiveness, and fading fast.  As donors and members slowly, inevitably change their habits, doesn’t it make sense to be ready for those changes?

The best way to get started is to start eavesdropping.  Start listening in.  Choose some blogs to read and read them every day, whether in a newsfeed or not.  Comment once in a while.  As I’ve said before, the time to start learning a new language is not the day you get your passport stamped.

blogging for the hearts of donors

Shel Israel just posted an interview he did with Dr. Nora Barnes, chancellor professor of marketing and director of the Center for Marketing Research at the University of Massachusetts, Dartmouth.

It’s a good review of some of the thinking that went into, and results of, the study her team did last year on adoption rates of social media within large charities in the United States, called Blogging for the Hearts of Donors: Largest US Charities Use Social Media.

I remember when this report came out – it supported what I had already believed to be true, based on personal experience and purely anecdotal evidence. It’s always deeply gratifying when a methodologically sound, quantitative study backs you up like that.

“Seventy-five percent of the charitable organizations studied are using some form of social media including blogs, podcasts, message boards, social networking, video blogging and wikis. More than a third of the organizations are blogging.”

She mentions in the interview that charities tend to be nimble in their operations, which might increase their capacity for responding to new developments in technology like the Web 2.0 tools listed above, compared with their for-profit counterparts.

“It’s very slow to turn a big boat around.”

And while that’s certainly true, I suspect that it is more a cultural difference that sets charities apart from large businesses than just size. Because the charities she polled were, by and large, pretty large (taken as they were from the Forbes 200 largest charities list).

Primarily, the disparity lies in the staff time charities have available to allocate to social media projects. Most of these social media tools are either free or very cheap — the only real cost incurred is in time spent. So where does this leave the smaller nonprofit, with a lean and mean staff with little or no time to spare?

Well, as in all things, they get creative. They look for volunteers and unpaid student interns to get the ball rolling. In some cases, they don’t feel they can make the case for paying staff to work on social media projects until the return can be proven.

So it’s a bit of a bind for smaller nonprofits, but there are pockets of amazing creativity erupting in small and medium sized organizations. I mostly work with arts and culture nonprofits, which have different “audience development” (read: community-building) strategies than cause-driven charities. So the social media strategies for cultural organizations are going to differ somewhat from the cause-driven organizations.

But the common thread in all nonprofits is passion, and passion is an attribute that is also widely shared by social media enthusiasts. Passionate people find a way to make it happen. They blog on their own time. They buy decent recording equipment on their own dime and stay up for hours at night editing a five-minute podcast. They share resources, collaborate, and make connections in unlikely places.

It’s not surprising that there’s a lot of overlap between the nonprofit world and the social media world. We’re already members of the same tribe.

the only roi is the roi of ice cream

Pleased as punch am I to have gotten a shout-out in the weekly round-up of things nptechish (here), so much so that I have been shaken out of my usual Saturday afternoon torpor enough to write up some of the notes I scribbled down when I got the subject of the week from the Net2ThinkTank, what is the return on investment of the social web for nonprofits?

As a one-time academic, I love a good essay question.  And as a habitual insomniac, I frequently find myself reading barely legible notes from my 4 am brainstorms – which usually center on things worky.

Sometimes these ideas are sharp and focused and spot on and I thank the good lord for making me an insomniac, and sometimes they wander about the room, muttering incoherently about flying, being chased, and/or public speaking whilst improperly (un)clothed.  As I am turning to a recent set of these scribbled notes for my response, let’s hope for the former, shall we?

 What is the return on investment of the social web for nonprofits?

How do you quantify the value of engagement in social networking?  How do you convince organizational leadership that precious and scarce time and money should be directed to something that many see as vague and marginal at best, and risk-laden and uncontrollable at worst?

First, you can tackle a problem that your existing technology has failed to properly address.

Identify a need – for more donors, more members, more volunteers, more participation from all three – and you can propose a solution using the social web.  Often, the only alternative on the table is that hoary old definition of insanity – trying the same thing over and over and expecting different results. 

Because most of our problems come down to a question of money, specifically a lack thereof, these problems can often be well-quantified.  Whether it’s our opening night houses aren’t selling out in the off-season by an average of X tickets or our annual end-of-year donor drive is falling short by X dollars or we have 500 volunteers on the roster and a paltry X of them are in sight when a mountain of envelopes need licking, you can usually stick a value on it and call it your baseline.

Identifying an existing problem and proposing a new approach to it can help remove the element of let’s try this technology because it sounds cool and brings the endeavor more comfortably into the realm of let’s try this technology because the existing technology isn’t working.

So now you have a quantifiable baseline (things aren’t working by X amount), a reasonably controlled experiment (let’s change this one thing about how we approach this problem), and you can set a time-frame for analyzing the results (let’s find out what, if anything, changed).

The nice thing about this is that the initial investment is seen as necessary — there is a problem (lack of attendance, funding, volunteer recruiting) that the whole organization can agree needs to be addressed.  It can be easier to advocate (and get widespread buy-in) for a new approach when the existing approach is acknowledged to be flawed, or at least inadequate for today’s needs.

You didn’t answer the question

But all of the above only addresses how one might go about determining the ROI of one’s own investment into social networks, and neatly evades the question of what the ROI actually is. And that’s what we all want, right? Some research or dataset we can whip out, with a nice multicolor graph with an x-axis and a y-axis properly labelled (preferably something like “time” or “money”) that shows a positive correlation between engagement in the social web and improvement in some metric that is central to the organization’s mission.

That, I don’t have.  I remain unsure whether that graph exists, or can exist, or perhaps even should.

What I do have is (merely anecdotal) evidence that the most tangible immediate return on investment when nonprofits get involved in the social web is internal, not external.  It’s often felt most strongly in terms of professional development, and even empowerment, on the part of the individual staff member and the organization as a whole.

If the organization makes it a rewardable thing for staff members to explore and propose applications for social media, then they will feel free to explore the various sites and their technology, research and observe what their peer groups are doing, and consider what might be the right moves for their own organization in this arena.  The staff member gets smarter, and the organization gets smarter.  Hopefully, the whole exercise begins a conversation about developing a strategy and a unified approach to the group’s engagement – or nonengagement.

The process can go a long way toward bringing nonprofit staff up to speed with what’s out there, demystifying it, overcoming the fear of the unknown, identifying some practical first (baby) steps, and developing a plan (always revisitable) for the future.

This “professional development” ROI shouldn’t be minimized, because it can have a viral effect on a community of nonprofits and nonprofit professionals.  Not only does one organization’s presence in a network often impel others to follow suit, especially if they see each other as competitors, but individual staff members might get excited about one thing — be that organizational blogging, internal wiki use, or the discovery that everybody you know is on LinkedIn — and start talking about it.

That person becomes an ambassador for the social web in some way, she plugs herself in, starts to network herself, evangelizes a few others, and the virus spreads – in the very micro-network that the worker exists in, that of colleagues, collaborators, and board members.  This in turn creates a more educated field of players that surrounds the early adapter.

So what is your answer time is up

I think that the first actual return on investment is the (low-cost, self-directed) professional development of nonprofit workers, and the result is a more technologically savvy, well-informed, self-empowered staff.  A secondary effect is a more well-informed micro-network that is better equipped to make decisions about technology use.  In short, the only way to learn if you should be using web 2.0 – if certain tools, deployed in certain ways, are right for your organization - is to use web 2.0.  At least a little.  These tools are not one-size fits-all, nor does one approach to and use of the tools fit every organization’s needs. You’ve got to figure it out for yourself.

In the absence of a scientific study determining the numerical value of social networking, I think that a manageable, low-risk way to “incent” getting started in social networking is to address a problem with a measurable outcome that is currently not being achieved by the methods being used.

Questioning the question

I do think that it is worth wondering if return on investment in the traditional, MBA sense of the term, is really the best way to valuate social networking — but that for now, at least, it is a question that many if not most nonprofit boards are demanding an answer to.  Especially in light of the fact that many of today’s nonprofit boards were assembled during that whole You-Must-Run-Your-Nonprofit-Like-a-Business push of the last decade.

So, valid or not as applied to web 2.0, it is a question that many practitioners simply have to answer satisfactorily to get buy-in from their board and their organization.  Most nonprofits spent the last 10 years becoming more businesslike, modelling themselves on traditional, often corporate, organizational heirarchies and decision-making practices.

Will a similar paradigm shift be required for buy-in to these new tools and ways of operating?  Will the nonprofit world have to cycle through another shift in how boards are developed and maintained?

Arts nonprofits are now pretty used to making sure they have representatives from certain professions on their boards, if possible: business leaders, marketing professionals, lawyers, insurance people, in addition to practicing artists and cultural leaders.  Is it time to make sure you have an IT – or better yet – an “nptech” person on your board?