Debunking Social Media ROI Myths

Last week the Liqui-Site team traveled to Mount Saint Mary College in Newburgh, New York, to talk with administrators, faculty and students about social media. We had a free-flowing, energetic Q & A style session with undergraduate and graduate students, who spanned such diverse majors as Communication Arts, Business, and Information Technology.

At the close of the evening, a professor approached us and commented to the effect of “Great presentation, but is there any way to actually measure the effect of social media?”

It was a perfectly timed question. We had just finished an exhaustive search for a competitive Social ROI software system, and in the process came across a number of misleading statements about social media ROI. Let’s debunk some social ROI myths.

Myth #1: Social ROI doesn’t exist.

In my opinion, there are two main reasons why some people still believe social ROI is not a real thing. The first is that they expect the formula to be the same. ROI is traditionally measured in terms of sales, minus the cost and time required in executing the campaign. But social media is not just about sales, it’s about engagement. Sure-it’s an overused word, but it holds meaning. Here are two measurements of social ROI that are often not factored into the equation: is your social media bringing in qualified leads, and is your social media staff productive? Engaged employees are more productive, creative, and less likely to leave their jobs. That means money saved on not training new people, and a level of engagement that consumers can tell is genuine. You can’t fake social engagement—your customers can tell if you don’t care. The second reason people believe social ROI is fictitious is that they confuse page visits with true Social ROI. A single person who comments on a company blog and is greeted with an open ear by the company is likely to share the company across social networking sites and be a brand ambassador for life. That is social ROI, regardless of whether or not they bought anything.

Myth #2: Social media and return on investment don’t mix.

Conversely, there are those who believe social media and ROI are at odds with each other. These people believe that the value of social media rests primarily in its ability to facilitate conversation, while ROI is geared with the end result of sales. Social media is not the means to an end. Companies that use strategic social media marketing, integrated into the broader business plan, see results. I would argue that social media is replacing word of mouth, and there is no doubt socialization of a brand leads to increased sales. People are inclined to share their brand preference on a blog or their Facebook and Twitter pages because it’s another opportunity to express their identity. Yes, there will always be negative commenters, but it’s less difficult to extract the positive comments today.

Myth #3: Companies that profit from social media got lucky.

The common thread among companies who saw social ROI is not luck, but customer service. Companies that have used social media as their primary customer service platform are seeing measurable ROI. Take BestBuy for example, where employees have the opportunity to help consumers via Twitter, responding to over 13,000 customer questions, concerns, and opinions. The Twitter feed (@twelpforce) now counts over 43,000 followers. The idea was a key value-add. And it’s not just working for huge corporations. Take a look at Seton Hall University, which relies on tuition for revenue. They took advantage of the fact that incoming freshmen jump to a school’s Facebook page to form impressions. The University actively engaged in conversations to answer questions and guide incoming students. They tagged the web traffic coming from Facebook to their website. Tuition coming from Facebook went up 18% and tuition deposits went up 25% – compared to schools not using Facebook. What about Kinaxis, a B2B supply chain management company that used 18 employee bloggers and focused on category thought-leadership to generate over 42,000,000 leads. That’s 2,180,000 per blogger. There are literally thousands of social media ROI case studies. If you don’t think that your business could be a case study, we’d love the chance to prove you wrong!

Myth #4: There are no tools that produce real metrics.

Acquiring a social ROI portal will not in itself deliver results. A company must first and foremost value collaboration in its company culture. That said there are solutions from the likes of Raven, IBM, Adobe, Salesforce and other ‘big players’ that gauge social ROI with deliverable metrics and are capable of complex customer relationship measurements, cross-referencing, and intuitive data that leads to increased traffic and new influencers. But it’s also expensive for a single business, and a big risk if you’re a social media beginner, or don’t have a fully conceptualized social media marketing strategy.

There is also an emerging tier of mid-performing level social ROI systems, such as Sprout Social, Yap Social or Livefyre. These are adequate for a self-employed or professional blogger types, but are really more conversation monitoring tools, rather than discovery tools.

And then there are free services from HootSuite and others that organize your social media activity in one space, but have limited ability to manage a social media campaign.

Those who have dismissed social ROI have likely not had access to high-performance software or social media management services, for financial or other reasons.

Hopefully this clears up some of the confusion. For more information on Liqui-Site’s Social ROI Program, visit or to familiarize yourself with social media ROI, I recommend downloading the white paper from SmartBrief at that can guide you through establishing Social ROI benchmarks.