Eating from the Social Media ROI Cookbook

ROI eludes many folks in the social media space. Not because social marketeers aren’t able to, it’s just damn difficult to assign cause and effect to a very organic and often nebulous activity.

That being said, there is something happening that can be measured, but it’s time we think differently about which “measuring cup” we use and how we use it. Susan Etlinger (@setlinger), Andrew Jones (@andrewjns) and the folks at @AltimeterGroup have taken to explain how ROI can be looked at, both qualitatively and quanitatively, through a social media lens.

I couldn’t agree more with the thesis that an effective toolset indeed has ingredients within a larger recipe.

6 Ways of Measuring Revenue Impact of Social Media

Despite promises made by any number of social measurement vendors in this market today, none, and I mean NONE, of them can report on any sort of true representation of what you might call ROI for your social investments. There certainly are a lot of fascinating startups out there trying to crack this nut, but looking at how audiences interact with brands and each other, there currently don’t exist and unique keys to this puzzle.


Altimeter offers a great model on how to approach this problem which should meet in the middle for both sides of the ruler (see figure 5 below). The Top-Down approach looks at conversation and how it begets more conversation and thus correlation to peaks and valleys in your reporting matrices. This is very important in understanding what drives awareness, thought leadership and influence. There is no hard and fast way to measure the impact of such activity, which understandably creates some angst in organizations accustomed to proving points through data.


The bottom-up approach is where you can use metrics to help tell your story, or to at least ask the question, “And then what?” as you review successes and challenges. I call these metrics the “how manys” and have served well to capture the attention of managers. This opens the door to conversations around content effectiveness, message alignment, and so on, which then circles-back to the Top-Down measures looking for the best possible correlations to demonstrated behaviors across social channels.

Put these together and you can create powerful metrics models to prove your efforts are working. Can you call this ROI? Absolutely. But don’t lose sight that social media marketing is still very much in its infancy while related market forces are indeed changing social media’s growth cycle.



Here are a few points to consider as you ponder the question “And then what?” These should lead you through conversations that help you prioritize tactics for achieving social media ROI. If you can attach these measures to what your doing on Twitter or Facebook, you’re doing it right.


Hopefully this report from Altimeter gets you as hungry as I am to try new recipes to cook up some social ROI. It’s still anyone’s game to claim the title of social media “Top Chef.” Use these insights to develop the menu that works best for you.

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