Jimmy Gilmore – Writer – Director

I was talk­ing with a group of social media folks about met­rics the other day and it made me think of a famous quote by William Gold­man, the Hol­ly­wood screen­writer “Nobody knows any­thing.”

Gold­man was talk­ing about how nobody in Hol­ly­wood knows if a movie is going to do well. There are just so many vari­ables that go into a pro­duc­tion that it’s nearly impos­si­ble to pre­dict how a movie will fare on open­ing day and beyond. No one has a clue, no mat­ter how much they protest, how a movie will do cre­atively or at the box office until it hits theaters.

Track­ing the effec­tive­ness of social media is much the same way. It’s incred­i­bly dif­fi­cult to track spend­ing to actual return on invest­ment. Espe­cially for brands that aren’t sell­ing their prod­ucts online. I won’t bore you with the ana­lyt­ics prob­lems involved in even mea­sur­ing links com­ing to your site from say Twit­ter, Face­book, MySpace, or YouTube. The prob­lem is most brands don’t actu­ally sell their prod­ucts or a major­ity of their prod­ucts on their own online store. How do you mea­sure if Tweet influ­enced the pur­chase of chew­ing gum at the 7–11?

Chris Bro­gan says it’s all about the dol­lars. Mean­ing how much money is com­ing in cur­rently vs before. He’s right that it’s about the money but how do you con­nect the pur­chase to the tweet when you’re sell­ing insur­ance? Or if you’re sell­ing potato chips, was it the POP or the sale price that moved the prod­uct in the aisle?

In adver­tis­ing, we’ve been work­ing with this kind of fuzzy math for years with tele­vi­sion, radio, and brand adver­tis­ing. But social media is on the Inter­net where peo­ple have been using Google Ana­lyt­ics and Omni­ture for years so it’s held up to a higher stan­dard, even though it’s the shiny new toy. So what do we do?

We do what we did with TV. Look and see if our invest­ment cor­re­lates with growth. But since the spend­ing won’t nec­es­sar­ily cre­ate as imme­di­ate an impact, we also have to look at activ­ity over time – exam­in­ing trends in both pur­chases and brand men­tions. If these things cor­re­late, then you can begin to esti­mate a ROI. That said, it’s still very dif­fi­cult to fac­tor out other variables.

We’re for­tu­nate peo­ple can’t say nobody know any­thing about social media ROI. But we should be hon­est and say, nobody know everything.

Be Socia­ble, Share!

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This entry was posted Friday, October 16th, 2009 at 4:26 pm and is filed under Site News. You can leave a response, or trackback from your own site.