Larry Brauner
As a business community, are we obsessed with return on investment? Is our preoccupation with measuring social media ROI counterproductive?

In this article I look at social media from what might be a novel perspective. I hope to convince you that social media use need not impact the bottom line over the short term, and that our belief that it ought to is impeding our progress.

I expect to provide a few other takeaways as well.

Are Marketing and PR Merging?

I was speaking with Jeffrey Cole, the marketing PR expert behind JJC Communications LLC, an agency using both social media and traditional public relations to achieve clients’ goals. Jeff authors the blog PR 101.

I asked Jeff whether he agreed with me that marketing and public relations were converging. He said he agreed, and that he believed advertising was converging with them as well.

Can You Put a Value on Reputation?

I saw a video and article posted by Chris Boyer, creator of the Hospital Online Marketing Education site on Ning and online marketing consultant at Healthgrades. Chris was discussing social media and the importance of his four R’s:

  1. Reach
  2. Relationship
  3. Reputation
  4. Return on investment

Regarding return on investment, Chris pointed out that measuring the ROI of social media was like trying to measure the ROI of a friendship.

I agreed with Chris’ assessment of social media, but let me ask you this question: What about measuring the ROI of your reputation? Could you possibly place a value on your reputation? I say no. Your reputation is invaluable.

Public Relations

Defining PR, the Public Relations Society of America states that PR “helps an organization and its publics adapt mutually to each other.”

The PRSA definition of PR implies relationship, Chris Boyer’s 2nd R of social media. Even the term itself, public relations, suggests relationship. The key word is relations. According to the Council of Public Relations Firms, public relations also:

  • “Builds and protects reputations.” Reputation is Chris’ 3rd R.
  • “Extends reach, frequency and the message of an advertising campaign.” Reach is Chris’ 1st R.

Marketing tends to revolve around cost per acquisition and ROI.  However, public relations relies on softer metrics, and since reputation is invaluable, PR almost never requires ROI justification.

Public relations and social media are a perfect pairing according to Chris’ four R’s.

Marketing

According to the American Marketing Association, “Marketing is the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large.”

The key word in this definition is offerings. Nothing is mentioned about reputation, although communicating and exchanging seem to correspond to reach and relationship.

Given marketing’s basic orientation toward advertising offerings, an activity in conflict with social media, and that it tends to revolve around cost per acquisition and return on investment, marketing and social media might be incompatible.

There are marketing-related activities that are obvious exceptions.

Customer Relationship Management

Although customer relationship management and customer service are marketing functions, they differ from marketing conceptually.

CRM and customer service focus on relationships more than offerings and are tracked using soft metrics such as time to answer call, call length, first call resolution, sales, saves, etc.

Many attempts to interact with customers on Twitter and to broadcast limited-time offers to them have been successful.

Selling

Selling, according to Wikipedia, is “persuading someone to buy one’s product or service,” i.e., to buy one’s offerings, and relationship is certainly essential for selling success. However, the key word here is persuading.

Social networking sites such as LinkedIn can support the sales process and replace much less convenient offline meetings.

Social media prospecting, if done well, can open doors which have been closed until now. Perhaps though, the persuading part of selling will go more smoothly if taken offline.

One-to-one selling using business networking sites to make connections is working for many people.

Image Advertising

As I said above, marketing almost always requires ROI justification.

There are some marketing efforts that don’t directly increase sales. Big companies can advertise their brands like Coke and Pepsi in order to maintain parity and to create economic barriers to entry into their markets.

These marketing campaigns are brand and reputation centric, and as such the public relations function could presumably conduct the very same campaigns just as effectively.

Social Media Marketing

If social media is largely a public relations tool, then what is social media marketing or social marketing?

Social marketing is web PR as practiced by marketing people who hope (pray?) that their social media outreach will eventually spill over into sales and justify their efforts.

We as marketers find it difficult to admit to ourselves and to others that we’re engaged in PR, but we are.

Do our companies really need more PR?

Marketers have long understood the importance of listening to customers. Today social media facilitates useful dialogue with and understanding of both customers and prospects.

The Long Tail of Social Media

The Long Tail of Social MediaSocial media is an investment with a very long tail. The content we create and the relationships we build can continue to bring a return far into the future. The revenue in the ROI equation is the present value of future dividends arising from our social media investment.

Social media used wisely ought to pay off. We can’t yet say exactly how-so nor how-much-so, but we’ll never find out unless we remove the impediment to progress, our obsession with social media ROI.

I found 35 social media KPIs to help measure engagement on the web and think that you’ll like it. I’m regularly researching and bookmarking new articles for you on my new Bookmarks page.

Keep the faith.. and leave me your comment. ;-)

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Larry Brauner

In Social Media vs. Search Engine Optimization, worth a read, I discussed the synergy between social media and search engine optimization.

Today, thanks to heated competition between Facebook and Google, the connection between social media and SEO may become much tighter than a mere relationship of loose synergy.

A More Natural Form of Search

According to the Wired.com article which I referenced in Most Popular Social Networking Sites for Business, “Facebook CEO Mark Zuckerberg envisions a more personalized, humanized Web, where our network of friends, colleagues, peers, and family is our primary source of information, just as it is offline.”

In other words, the endorsements of both web pages and their authors by people in our personal networks will influence the outcomes of online searches we perform as much as or more than the current system which analyzes external links to determine a site’s authority and relevance.

New Role of Social Media in SEO

Facebook intends to leverage the vast amount of member data stored in its global network to facilitate this type of search.

Facebook is adding tons of new data by the second through its site, as well as via its Facebook Connect API that opens a window into a growing number of other sites such as Digg.com.

Google is pursuing initiatives to develop its own proprietary data through Google Friend Connect and the anticipated releases of Google Wave and Google Chrome OS.

Furthermore, all search providers can mine public web data to monitor additional social media buzz about web pages and their authors.

Let’s consider how big this SEO paradigm shift will be.

Social Media Presence

In the new SEO, your online reputation is an integral part of your overall web presence and influences your search results. Social media enables you to nurture the relationships and shape the opinions that underlie your online reputation and social capital.

So important is social capital today that new products and services such as Sumbaa, by Paden Noble Consulting and Morpholytics, LLC, are emerging to meet a fast-growing need in the marketplace.

Webmasters work to build external links to their company’s web pages. Savvy companies are already beginning to dedicate additional staff to build and manage social capital as well.

High Cost of Complacency

Companies that neglect their social media presence will suffer in several ways:

  • They’ll have no influence over their online reputation.
  • Their customers will view them as backward.
  • They won’t receive traffic from social media sites.
  • They’ll receive less search engine traffic too.

Be Proactive

Build your social media presence right away. Pay special attention to Facebook and Google. I intend to write much more about Facebook and Google in future articles.

Oh, and while we’re on the subject, please take a minute to join my Facebook and Google networks using the widgets on my right sidebar.

Did you enjoy this article? Subscribe to my RSS feed or by e-mail. Visit my About, Services, Media Buzz and Connect pages to learn about Building Your Audience and Brand on the Web. See also my Disclosure Policy regarding affiliations and compensation.

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