The Biggest Lie in Social Media Marketing

This is what real ROI looks like. Except if you’re in Canada. Then it would be red, blue and purple. Canadian money rocks.
Do NOT skip over this article — It might just save your reputation, your credibility and your career!
ROI (Return on Investment) seems to be THE social media marketing topic right now — How do we make money on this darn stuff? There are hundreds of articles on SM and ROI. So why am I writing yet another one? Because almost all of them have it WRONG. Furthermore, I don’t want you to get it WRONG and be misled by these ROI lies because I want you to become fabulously successful and wealthy so you can buy me things.
Let me illustrate our problem through the headlines of three articles posted in the past two days …
“Forget ROI. Measure Return on Conversation.”
“Social Media ROI measures – Influence and Mention”
“Social Media ROI: The Currency is Content.”
.. and one quote from a prominent blogger I love and respect:
“When you ask businesses why they are participating in social media, what do they say? If they say, “to make money,” then they will fail, because currency in the social web is found in both relationships and content.”
Let’s start our discussion with a point I think we can all agree on. Businesses exist to create value for their shareholders. No profit = no company, no jobs, and no social media marketing. So it is neither wrong nor undesirable for a company to make money and expect to make more of it through investments in efforts like … oh, I don’t know … social media, perhaps?
Second, you CANNOT measure ROI with any parameter other than money. ROI is a financial metric – amount of money returned for the amount of money invested. Not “page views” invested, or “conversations” invested. Greenbacks.
So, from now on, if you see any article proposing to measure ROI by any measure other than cash returned to the enterprise, I request that you write the author directly and tell them “HOOOEY!” because you are a very smart person and know that when speaking within a responsible corporate environment, management expects ROI to be expressed in terms of MONEY. Instead of “hoooey,” you may also substitute “poppycock,” a seldom-used word sure to get their attention.
Measuring true ROI for social media marketing can be very difficult, but that does not excuse anyone to tell their CEO that the ROI is coming in “number of tweets.” If you are having difficulty connecting your effort to either new revenue or cost savings, you will be far more credible telling your management, “At this time, it is beyond our ability and resources to accurately measure this in dollar terms, but we think (insert your non-financial measure here) is a reasonable indicator of our success until we get more experience and data to make the correlation to profits.”
So now you’re thinking, “Great. I no longer have an excuse to measure page rank and call it ROI. Now what am I going to do? I have a report due on Friday!”
Don’t freak out on me. I’m here for you and we’ll get through this together! Over the next few days, we’ll continue our dialogue on marketing measurement with articles on calculating true ROI, the importance of non-financial indicators and that ever-so-tricky intangible, “brand equity.”  You should be fine by Friday : )
This is Part 1 in a series on social media marketing and measurement

Part 2: Social media ROI shock treatment

Part 3: Irresponsible social media measurement research            

Part 4: Social media impact on brand equity                                                        

Part 5: The most important question to ask in social media marketing     

Part 6: A double standard for social media marketing?                   

Part 7: Yes, it IS about the money!                                                          

Part 8: Creating a measurement plan                                                     

Part 9: Measurement is like a bartender                               


All posts

  • Tal Riesenfedl

    Well said! I couldn’t agree more.

    Looking forward to the next few posts…

  • basberkenbosch

    Wholeheartedly agree. Great kick-off. I'll keep a tag on you at least till Friday.

  • Laura

    I think people want to measure SM using other parameters because the ROI sum is so difficult to quantify as it is a long road. How long is a piece of string? How long is the investment road before the return comes? I don't know – may be it is years? So now it may look like there is no return but that doesn't mean there isn't one in the future, hard to benchmark against the current figure of £/$0.00 and it is hard to avoid wanting a short term gain when things are moving so fast.

  • steve dodd

    Mark, you may want to consider adding a piece to this puzzle and discuss emerging trends towards taking the metrics used for ROI determination and add them to Business Intelligence processes. From there, a company can begin to predict imact of Social Media successes on the business as a whole.

  • Nate Towne

    I agree and this reminder could NOT come at a better time – as I'm about to craft the "how do we measure success" portion of a squeaky new social media plan. I plan on using one metric I know I can measure – a unique tracking code that will only be used in our social media efforts. If it worked for Dell, I'm thinking we can repeat the success on a lesser scale, though I wouldn't sniff at 3M in profits! As always great thinking – you've really jump started my brain this cheery Monday morn.

  • wendytarr

    Couldn't agree more with this post Mark – just because it's difficult to measure ROI, doesn't mean you should give up. The other metrics are great for building a balanced scorecard (e.g. no. of page views, depth of engagement, etc.) but there has to be a way of demonstrating financial return on investment.

  • Abhinav Sahai

    a much needed one, eagerly waiting for friday!


    Thanks to all for taking the time to comment.

    I'm glad you're joining me in claiming a stake for social media marketing in the "real world" and the hard work of getting things done in a measurable way.

    I think nothing less than your credibility as a professional is at stake if you buy into the fluff. We all have to be good corporate stewards and be accountable for the money we spend.

  • WKPRAndrew

    Hi Mark, found your post via Twitter.

    Good point about pure ROI requiring a money-based metric. But what about a return on TIME invested? Yes, time=money, but you can draw corellations between money and other things as well.

    Audience size is one example of a metric that has long been used in the journalism and PR industries as a stand-in for monetary values. The larger a paper's circulation, the more they charge for advertising; the more impressions a PR campaign earns, the more it is worth to a client.

    I do agree that strict ROI in a financial sense must include a monetary value, but the same principle of return on effort-X can apply to many other areas. Since there is little evidence of a direct link between social media and the bottom line, I find it forgiveable that marketers invent other ways to measure the usefulness of these new media channels.

    It's all part of a larger struggle in the PR/marketing industries to find effective measurements for "links vs ink". There's a post on the subject on my company blog and lots of other articles about social media etc. Feel free to check it out:


    Good points, Andrew. The time issue will be addressed in my blog article tomorrow. I think you'll find it helpful.

  • steve dodd

    WKPRAndrew, I'm looking forward to how Mark addresses this because the fundamental problem with PR "Impression" measurement is that it doesn't generate measurable business / shareholder value. And, that is not a "fault" but a statement based on the fact that direct measurement to corporate impact could not be determined with the available technology. The volume of circulation of an item cannot be directly attached to specific business impact.

    Conversely, with Social Media, it can. In fact, there are numerous examples of Social Media directly impacting the bottom line of various companies in a huge way. The problem is that few organizations (vendors and users) are focused on determining what the exact impact is because so many are stuck in “old school” thinking.

    I think pretty much any online user has an anecdotal example of some commercial transaction they have made that has been impacted by some kind of online social media interaction. One staggering example (Movie revenue impact effected by Twitter) was actually published today. As an industry we've just not done a good job of identifying them on a broad scale with sufficient detail to understand its impact.

    That being said, because there is an indication of such evidence, we need to define it because with that kind of information, the value of what we as an industry can deliver will be exponentially higher that what we deliver today.

  • Melissa Paulik


    One of the problems that I see is the effort to measure your social media “campaigns” in a vacuum. My area of expertise is B2B software marketing. These sales cycles can be long – and are getting even longer these days. A good lead nurturing program is a “must have” and a blog is a great way to create good content quickly to augment your white papers, on demand webinars etc.

    If your social media efforts can be linked to campaigns that are measurable in terms of impact on the bottom-line, then it becomes much easier to show the ROI for social media.

    All the best!

    Melissa Paulik
    The Marketing Survivalist

  • BrentBillock

    Hi Mark-

    The primary benefit of social media efforts is most likely in brand-building intangibles which may lead to a greater number of sales, but not in a way that can be directly traced to its source.

    Brand advertisers have known for decades that money spent on television advertising has a very real impact on their bottom line. And anyone with a national television budget probably has enough of a marketing research budget to find out exactly how much brand awareness their media buy got for them. If they're really smart, they can quantify what an increase in brand awareness nets in actual sales.

    Compare that to the relative ease with which a smaller company can engage its customers through social media on virtually no budget. Companies that would never dream of brand advertising in tv or even print now have an avenue to promote their brands, and open a new line of two-way communication with their clients and prospects.

    In this situation, there's no chance that a fancy focus group or randomly-sampled telephone survey will be conducted on their behalf. Does that mean the entire effort to reach out to customers is a waste of time?

    I do agree that phony measurements without any attempt to quantify their dollar value are not the answer. I look forward to hearing what else you have to say in the series. This is a very interesting start.


    Wow. You guys blow me away. Terrific insights. Thank you so much!

    Brent, the article series tomorrow turns to this tricky question of social media's role in brand-building. Certainly a powerful opportunity!

  • Ryan Taft

    It's real simple, if you're running a campaign through social media tools and the call to action is to buy a product/service you're selling, be sure to offer something of value to the customer/connection (such as a discounted price, free giveaway, etc.) for mentioning a key phrase or supplying a unique identifier (if purchasing online). This way you'll be able to track any orders coming directly from those social media marketing campaigns. There's your ROI.

    If you have no call to action, you fail anyway…so make sure you tie in a unique phrase/identifier so you can track sales.


    Ryan Taft

  • Susan Fantle

    Hooray for you Ryan, a real direct marketer. My ROI on social media is pretty simple. How many new clients can I track back to my social media exposure, and does the lifetime spend of these clients cover the time and cost of my social media efforts. Of course you are right Mark, it's all about money.


    At the end of the day, it HAS to be about the money but I also recognize it is VERY difficult to quantitatively measure everything, especially when the tools to do that are still emerging. The blog will turn to qualitative measures, starting tomorrow.

    Thanks everyone for engaging. I'm learning a lot from you and you are filling my head with new article ideas!!

  • Trey Pennington

    Great start Mark. I think we'll all find that measuring ROI for social media isn't really that challenging. Olivier Blanchard has written an 8 part SMROI series that clears the whole thing up. And, yes, ROI is exclusively a dollar denominated (or percentage) measure. If you're not measuring dollars back in/dollars out, then you're not measuring ROI.

    That being said, Dave Lahkani makes a good point in his new point: the discussion about social media ROI is an excuse. Because people touting social media keep talking in circles about ROI, executives know they can squash a new idea just by questioning "ROI." Besides, they sound really smart using an acronym.

    Do those same executives debate the ROI of their executive perks? Their bonuses? Conferences? Or, do they really spend that much time pondering the ROI for THEIR favorite media?

    I once worked with a large B2B firm that spent 1/2 of it's entire marketing/advertising/PR/IR budget on display advertising in trade magazines. Even after I showed them a media buyer's study documenting their target market did not read the trade pubs, they continued the trade flight. Why? Because their head-to-head competitor did. (I wonder if the competitor was doing the same thing!)

    Bottom line: we need to merely document the impact engagement through social media has on financial performance and be bold at engaging while we do.

    Oh, and, we should continue to read what Mark and Olivier have to say.

  • Ryan Taft

    Thanks Susan. Quick question – how do you go about tracking lifetime spend for each customer? I guess through e-commerce sites it can be relatively easy. For brick & mortar stores, I'd imagine they'd have to have some type of key card – think ur grocery store card that tracks who they are and how much they're spending, correct?

  • thebrandbuilder

    Thank you. It's nice to run into the occasional bit of common sense these days. I've been writing about this for several months now.

    You and I are going to get along. 🙂

  • Robin Cavonius

    what a brilliant post!

    there are so many ways to measure the success of social media but ROI (financial) is not the way. In addition I think all marketers should remember that another massive benefit is that we no longer need to pay a research company millions of dollars to tell us what our customers want. Instead social media enables us to keep our ears clsoer to the ground and listen to our customers on an ongoing basis.


  • Jeff Swanson

    There does seem to be some misleading information about social media and ROI. An article I read today, which you can see below, is titled How to Track Your Twitter ROI, but never gets to a point where they uncover an ROI.

    The article basically tells how to track engagement using various tool. It explains this well, but tracking followers, etc. is no the same as ROI because money is not involved, as you have mentioned.

  • Agree 100% with this one. Unfortunately marketing people have gotten away with not being measured on financial success, but on some esoteric concept such as “page views” or “brand perception.”

    Bottom line – my local shop doesn’t accept “conversion rate” when I want milk….

  • Pingback: Betty Sue()

The Marketing Companion Podcast

Why not tune into the world’s most entertaining marketing podcast that I co-host with Tom Webster.

View details

Let's plot a strategy together

Want to solve big marketing problems for a little bit of money? Sign up for an hour of Mark’s time and put your business on the fast-track.

View details


Send this to a friend