The ROI of Social Media Is Zero

Some would say the return on investment from social media essentially is "zero," in the sense that social media is not "media" in the traditional sense, so social marketing is not really marketing.

Social media is not media - people's conversations cannot be purchased, nor should they be purchased. The volume and influence on these conversations are not known ahead of time.

Social marketing is not marketing - instead it is listening and learning from customers' genuine conversation among peers and earning the right to be part of the conversation by providing value and earning customers' trust.

Social amplification will enhance the value of your existing content and extend its reach; as more and more conversations happen online, their reach and influence will remain far after marketing campaigns end.

Does this mean spending on social media has no measurable value? To the contrary, many would say social media investments do have value, but need to be measured differently than traditional advertising and marketing have been measured.

There are a few good examples where marketing activities in social networks can drive quantifiable value. For example, Dell has built up a following on Twitter over time so it can now tweet last minute deals and clear out unsold outlet inventory very efficiently.

Netflix has built up a large fan base on Facebook and uses it to interact with fans, get feedback, and announce new features or content.

JetBlue and Best Buy use Twitter for customer service and have thus built up a large enough following to use Twitter as a launch or awareness channel which is free, compared to other channels like e-mail or direct marketing.

The value derived from the above examples is replacement value - in other words, it can sufficiently and efficiently replace traditional, costly tactics such as market research, direct marketing or email marketing.

The ROI of Social Media Is Still Zero