With PR being still not being understood by some executives, demonstrating ROI in terms of a monetary value helps justify the value of PR, as the age old adage says, ‘money talks’. While I don’t believe this is the best way to measure the true value of PR it is an important requirement in requesting budget.
One of the main obstacles facing PR practitioners’ wishing to spend money on social media is the question of how to demonstrate ROI? A recent study by e-marketer found that only 16% of those polled said they currently measured ROI for their social media programs and more than 40% of the respondents were not even aware if social media tools had ROI measurement capabilities.
There are a few sites around that offer free social media analysis - Google Analytics, PostRank Analytics, Viral Heat and Crimson Hexagon. These offer a range of tools and functions to track visitors from referrers, including search engines, display advertising, pay-per-click networks, email marketing and digital collateral such as links within PDF documents. Viral heat and crimson hexagon also track sentiment, i.e. whether the information is negative or positive, this is useful to look at before implementing or changing a social media strategy.
While these sites are good and offer a solution for analyzing social media, they do not offer a way to calculate a monetary ROI. If PR practitioners want to increase spend on social media they will need to be better able to justify the ROI, in my opinion the tools to do this are still weak. I would strongly advocate the development of industry standards for social media evaluation. This would enable different campaigns to evaluated against each other and executives to educated to understand one set of benchmarks.
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ReplyDeleteI think ROI in social media is quite different from the usual ROI. As I wrote in one of my posts, quoting Brian Solis, we can determine return on participation, return on involvement, return on attention and return on trust.
ReplyDeleteIndeed "money talks" and it would be harder perhaps to convince executives of these returns. On the other hand, advertising equivalency can be more easily manipulated than the engagement (participation, involvement, attention and trust) of people in the online medium.