I ran across a mention on Beth Kanter’s How Nonprofits Can Use Social Media blog awhile back of a social network ROI calculator — impressed at first glance, I bookmarked it and determined to go back and visit it, which I’ve just done.
The Social Network ROI Calculator was put together by Justin Perkins, Product Manager & Director of Nonprofit Services at cause-related portal, Care2. The more I look at it, and while it’s clear it’s really a marketing (er, development) tool for NFPs, I can’t for the life of me figure out why nobody has built this kind of tool for evaluating ROI of social media relations or public relations, for that matter, whether in the for-profit or not-for-profit world.
Or, maybe they have and I just haven’t seen it?
Yes, I know that return on investment is not only about transactions and I certainly don’t want to fall into “vulgar reductionism” on that front here.
But, the inability of PR practitioner advocates of social media to effectively quantify for client organizations the ROI of time and resources spent on Web 2.0 communications efforts continues to be, let’s admit it, an obstacle to overcome in the real integration of social media relations into traditional media relations practice. But, I digress …
Justin’s Social Network ROI Calculator (slide show here), is so brilliant because it works like an online mortgage calculator … and who hasn’t played around with one of those in the last two or three years!?!
By changing the inputs in the yellow column (kids, this is safe to try in your own home!), the tool automatically recalculates its estimate of cost and return on investment for not-for-profit recruitment and fundraising efforts. The latter are obviously the equivalent of “sales” or “customer acquisition” in the for-profit world. And, it’s obviously much easier to track traditional and online marketing campaigns against sales or subscriber increases, than it is against much less-tangible public relations campaigns and media relations outreach.
But, while it’s more difficult with PR, it can’t really be impossible. By establishing goals or desired results specfic to a client organization (say, something simple, like eyeballs on the client organization’s website) and tracking the increase in web traffic against any variety of traditional and social media outreach activities (from posting of news releases online, to stories landing in traditional print or online publications, to sharing of news via social networking sites and Twitter feeds, etc), I’d think you should be able to come up with a back-of-digital-envelope estimate of the ROI for PR activities, both social and non.
Again, maybe somebody has done this already and I just haven’t seen it. If so, feel free to enlighten … or embarass me!
It’s clear to me why the not-for-profit sector might be in the lead on this, however, given that their resources are comparatively slim and return on investment is always at a premium. So, it stands to reason they would be very attuned to where they spend their money and for what. In a couple of other posts on the relative ROIs of Facebook and MySpace, for example, Perkins makes a real case for why cause-related campaigns via social networking sites have proven to be, well, generally a pretty clear waste of time and resources for not-for-profit concerns.
That said, I also have to note that whereas some in the not-for-profits and NGO world seem to be ahead in analysis of the ROI of social networking, the for-profit world seems way ahead in understanding the benefits of social-media optimization of organization newsrooms and how that dovetails and can feed into social networking marketing campaigns.
When organizations social-media optimize their news content and through Web 2.0 technologies and social networking platforms enable that news to resonate through the Internet, it can serve to both inform and grow their constituencies — and encourage them to join/subscribe or contribute/purchase, when the call goes out in recruitment/subscription and fundraising/marketing campaigns.
Maybe the lack of social media optimization of online news and events pages at some of the major NGO sites I’ve visited recently help to explain the poor ROI that not-for-profits find when working through social networking sites. Just a thought …
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23 July, 2008 at 4:56 pm
Haven’t seen any kind of calculator like this but it sure would be welcome. Trouble is, social media programs can yield benefits that are difficult to measure in the traditional way. Let’s face it: NOTHING about new media/social media marketing is traditional. Old ways of thinking don’t work, old measurement tactics don’t work, old implementation tactics don’t work. It is quite a conundrum. I guess you could say it’s the best and worst thing about it.
23 July, 2008 at 10:54 pm
thanks for stopping by … I have a whole wiki on this topic
http://socialmediametrics.wikispaces.com
24 July, 2008 at 10:16 am
Beth, thanks for the link. Just joined Wikispaces and while waiting to get into the socialmediametrics space and see your wiki, clicked through on the “Social Media Measurement Links and Resources” and wow … too cool! And, where have I been on this topic? Amazed at the resources and diving into reading right away … now, if we can only translate some of this into ROI on social media relations/PR work, I’ll be thrilled!
24 July, 2008 at 10:19 am
Agree, Matthew, that “social media programs can yield benefits that are difficult to measure in the traditional way.” But, that’s always been said about the intangible benefits of PR, too … you know, so hard to quantify, etc, etc. And, while I know that’s true, I also know that increasingly the marketing folks who hold the purse strings are concerned about ROI on traditional PR in a shrinking traditional media world, much less launching out into investment in the brave new world of social media. Somehow, we’ve got to find a way … I’m heading into Beth’s wiki on social media metrics to see what I can see!