Why ROI Means ‘Return On Influence’

Well, it doesn't really.  But, why do some of us use "Return On Influence" to describe social media ROI?

"ROI" is really an acronym for "Return On Investment."

ROI - Return On Investment

But, I can appreciate why some of us would choose to speak of ROI--especially as it applies to social media programs--in more enigmatic terms like "Return On Influence," "Return On Ignorance" (a negative 'valuation') and other similarly abstract phrases.

Old models are new again.

(See also:  "Social Media Strategies and Tactics Are Not the Same")

In this video, I propose an assessment model, gleaned from a 1975 publication in the training industry, that may help explain the disconnect between true ROI assessments of social media programs, and the metrics we often turn to when attempting to quantify social media ROI.   (Below, you can download the mindmap I use in the presentation.  It also includes links to the reference materials I mentioned.)

4-Levels of Social Media Assessments (v-1.0)|1.78 MB|downloads: 950
From Why ROI Means 'Return On Influence'. You must use Adobe Reader (not Preview or other viewers) to view this document. This is the interactive mindmap from the source video. It's in a PDF player format. It's interactive. The branches are expandable. Click the links in the "Read Later" branch to get the reference material I mentioned.

Why is this important to you and me?

It's been claimed that it would be fruitless to try and measure the economic return on social media.  After all, as conventional wisdom goes, how would you assign a dollar value to a relationship?

Yet, as it becomes increasingly clear that social media--like other business tools such as the telephone, fax and email that preceded it--is here to stay, more managers and business consultants are being asked to justify the value of an investment of a social media program for the organization... and invariably coming disappointingly short of an adequate response.

But, without a better understanding about the limitations of metrics we often use to quantify the value of a social media program (e.g., page views, visits, time-on-site, followers, retweets, "return on influence," and so on) we risk failure.

We risk failure by (to name a few):

  • not addressing the economics underlying the questions posed by those who have the power to fill or kill a social media program
  • not targeting the correct metrics that ultimately link to key business objectives after the program has gotten underway
  • not properly setting up the organizational structure that will help us properly manage organizational change as we seek to gain organizational adoption for the new program

What do you think?  Can social media ROI (Return On Investment) be quantified?

Related posts in this series

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About Mel

Mel is the online training architect and screencasting wizard at Kareo, one of Forbes' 2013 list of 100 Most Promising Companies in America. He's also the creator of Digital-Know-How, a training website devoted to developing learners' skills for screencasting and web video course development. Mel is also the chief blogger of ScreencastingWizard.com; Mel's personal blog. The comments and opinions you read here are Mel's and not associated with any other company.
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