This week, with Gabriele Cucniella (@gabcuc) and Ottavio Nava (@ottavionava) I had the pleasure to take part to Social Media Week in London (#smwldn): a series of informal, interesting and - I admit it - very pleasant events in which brands, agencies, consultants and consumers discuss topics related to social web.



One of the most discussed topics was return on investment for social media. Related to this topic was an event called “Chinwag Live: Show me the money - where's the ROI in social media?”, attended by some of the most interesting personalities in the field of marketing, PR and social media in London: Robin Grant - We Are Social, Andrew Gerrard, Luke Brynley-Jones - Our Social Times, Marshal Manson - Edelman, Mark Rogers - Market Sentinel and Geoff Watts - Stylesignal. This event, and an interesting chat I had the next day with Mark Hancock (a usual a great source of inspiration for me on communication, marketing and strategy topics) made me think that maybe the real problem in measuring return on investment in social media is mostly conceptual: inside the measurement process.

To explain it in a single sentence how can we know how much an engagement built between a brand and a consumer influences purchase choices? When prospect customer is in front of the shelf - will she choose the brand she has a relationship with?

Your first reaction would be "yes, absolutely". It's difficult sometime, though, to demonstrate it with numbers or to quantify the impact of engagement on sales, particularly in a world (marketing) where measuring is everything.


What's the difference then, between a TV spot and a consumer engagement activity on social media if we talk about measurement? Why can we create a cause - effect relationship between bought GPRs and products sold, while we can't do it for conversations and relationship through social media?

Maybe because - in a social web environment - we work on a concept of earned media vs owned media, so we can't quantify the investment just by using traditional metrics and measurements (e.g. GRP for TV spot) inside the path that leads from awareness to purchase.

We can derive return on investment through a selection of variables:

• Some of these variables are necessary and are part of the consumer path (quantity of conversations, number of fan / followers, level of engagement);
• Other are external and need to be calculated from a broader point of view, stepping back, considering marketing and communication investment from a large perspective;

In other words, it' useful to think about return on investment in the context of marketing and communication actions that a brand activates, it's sometimes (but not often) possible to follow the path that lead from awareness, to attention, to intention, to purchase, to loyalty and advocacy in an effective way, considering consumer and purchases one by one. Buy doing so, we enter the field of CRM / eCRM. It's possible anyway, in an aggregated fashion mostly, to measure ROI, even social media ROI.

How do you measure ROI for your marketing and communication activities? How does this measurement differ from how you measure your ROI for your social media activities?

Thanks Gabriele Cucinella for the photo :)

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