Social Media ROI? Hunh?

One of the big questions about undertaking anything that an institution or organization hasn’t done before is ROI. Someone asked me this week, “what is ROI?” Well, I’m not a business school geek, so I will keep it really simple and trust others to correct me. ROI = Return On Investment. How much am I going to get out of whatever it is I’m putting money or time into. There are lots of metrics and formula for analysing this if you are a pro in the area. Let me bring it home for simple folk like me.


My lawn mower broke. I have a half acre lawn, not enough money, and not enough time. A push mower is WAY cheaper than a riding mower, but takes a LOT more time. Which do I need more, the money or the time? How much do I enjoy mowing my lawn?

What other intangibles come into the equation that might impact on the decision? If I spend more money on the riding mower, how many times do I have to mow my lawn for it to pay for itself in the time it saves me? What is the expected life of the mower, and how many times should I expect to be able to mow my lawn? Alternatively, if I hire someone to mow my lawn, how many times can I pay them to mow my lawn before it would pay for the mower?

That is ROI thinking. What do I have to put into it, what am I going to get out of it, and how does it balance. You need to include outside factors in any analysis, things that are harder to think up. What if I don’t mow my lawn at all – I can’t find someone to mow it, can’t afford to buy a mower, am snowed with deadlines and just don’t have time to solve the problem right now, whatever. What are the hidden costs of ignoring the problem? Is it OK to offend my neighbors, lose the good will of the folk down the block? Will the scraggly overgrowth interfere with the folks in wheelchairs who use my sidewalk? What if someone complains to the city and I get a ticket for neglecting my yard. How much would that cost?

You get the idea. Most of us do this in our own lives. A lot. We do it in relationships, too. I had a tshirt once upon a time that said something like. “Courtship is when a girl decides if she can do better.” I don’t pretend to understand how folks calculate something like that in a relationship, but obviously folks do.

So for, ROI in Social Media, well, that gets to be a messy idea real fast. The measurements are basically all intangible, the costs are mostly intangibles, the risks are not easily attributable directly to either having or not having social media. The ROI is largely in the realm of anecdotes rather than data. (See my earlier posts on social media metrics and the experts.) I tend to think of the risks and value as what will it cost you if you don’t have it and something bad happens, but that can backfire, since poorly managed social media can cause problems as big as any it solves. Still not being there can be a problem all by itself.

I have trouble explaining the value in a clearcut way that gets right down to dollars. I’m not the only one! Here is a slide presentation I found in which a group of experts work through ideas about ROI in Social Media for healthcare organizations. This is interesting as much for the process and the way in which they included social media in the presentation and surrounding discussion as for the ideas themselves. Take a look.

The ROI for Incorporating Social Media:

2 responses to “Social Media ROI? Hunh?

  1. Thanks for posting these slides. I had fun being part of the webinar, and think we covered some good information.


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