I have a confession: I am f*cking sick of the "What's the ROI of web 2.0 or social media" debate.
Not that I don't think we shouldn't talk about it - we should - but I'm sick of convincing everyone that there is one at all. If done correctly, you will see a return on investment. We can debate what the metrics should be, but you will succeed if you are open, honest, and provide something of value.
So can we stop talking about the ROI of web 2.0 tools as though it were an ephemeral mist?
I see a track-record of failure for the naysayers - those who prefer to sit on the sidelines while others take chances (and get the rewards). Here are a few examples from the naysayers:
- They didn't understand the value of blogging platforms. "Who cares about all the navel-gazers?" That was until Jason Calacanis sold Weblogs Inc. to AOL for $25M in 2005.
- They didn't understand the value of e-commerce. "No one's going to give up their credit card information online!" These naysayers didn't have much to say about Amazon.com's $476M net income in 2007 though (source: Wikipedia).
- They didn't understand the value of podcasting. "How does that relate to business?" I don't think Gary Vaynerchuk worried about that though. He created WineLibraryTV.com and increased his business 10 fold to the tune of $45M per year.
- They didn't understand the value of online word of mouth. "The 30-second spot is still king!" I can imagine their surprise when the marketing team at Warner Brothers told 7 rabid Harry Potter fans/bloggers about their new theme park. The result was 350M people hearing the news, all without out-bound media relations, marketing stunts, or expensive advertising (Source: The New Rules of Viral Marketing by David Meerman Scott).
- They didn't understand the value of social networks. "Friendster never did me any good." Then in September of 2007, Microsoft valued Facebook at $15B. With more than 50 million users and 200K joining every day, this doesn't look like a fad.
- They didn't understand the value of Second Life or other virtual worlds. "It's just a bunch of weirdos with time to kill." But engagement speaks for itself. The Weather Channel recently developed SL attractions that engage users for an average of 30 minutes per visit. Drew Stein, CEO of Involve 3D, builders of The Weather Channel's virtual experience, had this to say: "It's not like a commercial, where maybe they watched and maybe they didn't. You're talking about a user actually paying attention, and you can time it. That's hard to replicate in any other medium" (Source: Fast Company).
So seriously, can we stop debating whether social media and web 2.0 tools have an ROI?
The question for your company is not if they have a return on investment, but how you can get that return on investment. That's the challenge for your marketing team. And if they start whining about how unnecessary or unworthy web 2.0 is, prepare to join the other nay-sayers in the gutter of business.
I'm not the only one frustrated by the debate. Geoff Livingston explains why we keep going through it:
Often, companies want to know what they will get for $xxx,000 of social media engagement. What’s the ROI?!?!? And we play the game because we have to justify corporate expenditures in this era. But somewhere the soul of social media gets lost in these discussions.
From what I gather though, the audience of this blog is fairly split between marketers who get it and marketing folks and small business owners who want to get it. Today's post is venting with the first group. In my next post, however, I will address the second group.
If you're in the second group, you feel the wave approaching. You know social media tools are a big thing but you're not quite sure how they apply to your business and how you sell it up the corporate food chain. That's fine - welcome to the discussion and good for you for having the cajones to figure it out.
My next post will give you some ideas about how to think of social media in the context of your business and provide enough web 2.0 ROI for you to sell the idea to your boss. One good way not to miss it is to subscribe.
Update: That next post I mentioned can be viewed on ReadWriteWeb: 5 Ways To Sell Social Media To Your Boss.
(Photo courtesy of JanThePic via Flickr)