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  • Reich Communications, Inc. is a boutique public relations agency offering full service in a variety of areas, with specializations in transportation safety, business-to-business; advertising, marketing and media firms; non-profits, and select consumer products and services. . . . For more info, call us at (914) 325-9997, email to .... We are located about 12 miles north of NY City's Times Square ... at 112 Ridgeway Street, Mount Vernon, New York 10552. . .. For some examples of our work, scroll down to "Categories" below and click on "What We Do..."

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    May 24, 2007


    Mack Collier

    You're right David, it's about putting blogging in terms that companies can understand and feel comfortable with. That's why I extended the 'blogging leads to understanding' explanation to add that understanding leads to more effective and LOWER marketing costs.

    But even that won't be enough for many companies, for them, nothing short of plugging in numbers into a formula that spits out a numerical ROI will work. Given the many blogging variables, I'm not sure if we can so easily define blogging's ROI in monetary terms.

    Valeria Maltoni

    The first step is talking about it. Thank you, Mack and David for broaching the subject. There are some pretty cool things happening in Philadelphia these days that would make Ben Franklin proud. I am the bearer of the ROI message to the young crowd getting into social media projects -- we can figure it out, together.


    Doesn't it come down to the identifying the functional objectives of a particular program, and then devising some key performance indicators around them?

    Now, I understand that trying to measure the contribution to sales may be desirable yet quite hazy, due to the variety of influences. However that may not be greatest value derived.
    A program could be designed to improve the new product development process. Perhaps improve after-market service.

    Every business process has KPIs and other metrics to assess the quality and effectiveness of efforts. Project management in itself has unique metrics. If the data gleamed from social media projects can be effectively collected & analyzed, then turned into intelligence upon which we (or top mgmt) can act...we can in good faith trust in the process we've built.

    It's a fuzzy field, but ultimately I think all social media programs need to have business cases. That's where accountability and commitment to results will arise. The better the case, the better chances for management buy-in and executing the project well.

    David Reich

    Excellent comments, all. I thank you.

    I believe that ROI will come in different terms for different companies. For some, it will be lower marketing costs, as Mack's formula suggests. For others, it will be more effective customer service, which could reult in fewer product returns or fewer service calls. For others, it might mean better product development, as Mario suggests.

    But underlying it all will likely be some system that monetizes in some way the social media process and the time and money companies will eventually put into it. That's just the way business generally works and I don't see that changing soon in the vast majority of cases.

    And Valeria, keep us posted on what's happening in the City of Brotherly (and Sisterly) Love.


    Great conversation on a topic that has been controversial ever since marketers 'discovered' social media. For most businesses the justification for any marketing initiative is the return on the investment/impact on business outcomes. Which Mario and David pointed out can take many different forms. I continue to find it amusing that every other tactic/strategy used for 'marketing' must be goal driven but that not so for social media. David, perhaps we should ask, "Why is this tactic different from all others (that it does not have to be accountable)?"

    Ah .. would that we could do this for only the fun. But the bills have to be paid and the dog fed.

    David Reich

    Toby, you ask a very good question. (Now we just need three more questions and we can have a seder.)

    Bob Glaza

    I dig the time line. Its intuitive -

    "But business is about money, and the reality is, most managers need a way to determine where to allocate resources. It can be on hunch, or it can be on a more solid measurement. I'd best most managers would go with the solid measurement, whatever form it may take."

    There's the rub - the solid measurement is the easy choice - the simple...the one we are comfortable choosing. And most managers like comfort. In Mack's formula, we instinctively see understanding=more effective/efficient marketing. And leaders act on instinct. I wonder if we can make a distinction between managers and leaders? (2nd question toward the seder :)

    David Reich

    Thanks Bob, now we only have two more questions to go. When we get to four, I'll supply the matzoh.

    You are right about the distinction between managers and leaders. Those marketers that are lucky enough to follow a manager who is a leader won't get bogged down by the whole measurement dilemma. Real entrepeurial companies might do that.

    But still, so many businesses, especially larger ones, have been programmed to make decisions based on, among other things, ability to measure results of actions and expenditures. I don't mean to sound like devil's advocate here, but why should a decision-maker commit to something with no hard measurement set in place? The proponenets of social media for marketing purposes will have to come up with measurement terms or other rationale to satisfy the suits.

    Bob Glaza

    Believe me, David - I'm with you...devils advocate or not. Does today's reality = tomorrow's reality? yes and no (that's three ?'s - though I answered it so I don't think it counts:) Its a distant ship rolling over some pretty monster waves. Centuries old organizations change but in their own time. Its why they stick around for more than a cup of coffee. Yet, we remain optimistic and hopeful the change will come.


    Monitoring (and appropriate reaction) is not that hard to justify in modern corporations as long as it can fall under customer service budget. My sister is VP of customer experience in a telco. They identified an angry blogger, reacted and solved his problem. The blogger wrote a new post about it (very positive) and this case will probably be enough to justify a budget for monitoring.

    When it comes to marketing, that's another story. The only metrics I can imagine are the Nielsen Buzzmetric and the net promoter score:

    David Reich

    Intertesting idea, Philippe, to put social media budget (or at least blogging budget) under customer service or customer relations. But there will eventually be real need for a way to justify blogging and social media budgets in real dollars & cents terms as big marketers enter the game.


    I totally agree (I blogged the same message a few weeks ago). Buzzmetrics is a good base but can't be translated in cash (it measures image and share of voice). But the same applies for every form of communication that isn't a tactical sales action. What's the return of a TV spot? of a page in a magazine? The only metric at the end of the day is sales growth (no matter if the direct link between sales and communication cannot be proved)

    Lewis Green


    I agree with Toby and Bob. Businesses offer value in return for money. That's the definition of doing business. Therefore, Social Media should be goal-driven, which then makes it measurable. So depending upon the goal, ROI also becomes measurable.

    We have to stop talking about this as if conversation has value in and of itself. Of course it does. But we live and work in the business world, where we have to talk in terms of goals, objectives, metrics and ROI. Value of anything should be obvious but to contribute to our business and to our clients' businesses, it also has to be measurable.

    David Reich

    Right you are, Lewis. We may know the payback of conversation, such as the fruits we enjoyed this past weekend. But business needs measurable criteris to justify expenditures. That's just the way it is, and we bloggers who are looking to use conversation via social media for marketing purposes will just have to deal with the need for measurement or results.

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