Forget ROI

Forget ROI A Theory on Social Media and How To Swing It Justin Whitaker Shogun, MicroNiche Consulting

Social media is online content created by people using highly accessible and scalable publishing technologies.

Social media is a shift in how people discover, read and share news, information and content. -Wikipedia

The goal in getting involved In
Social Media is to get people
generating content and sharing
information about you & your
products !

How do you prove expending resources
on Social Media is worth it?

How do you swing it?

Engagement Measures?

Return on Investment ?

Return on Assets ?

Wait, Return on Assets ?

Engagement Measures ! = $

ROI = ( Gain on Investment – Cost of Investment)/Cost of Investment

ROI = How efficiently capital is used

ROI= Assumes discrete project/ milestone

ROI= Assumes attributable revenue

Social Media is not a campaign

Social Media may not generate attributable revenue.

(Engagement-Costs)/Costs != ROI

(At least not to corporate decision makers .)

ROI is the wrong tool.

ROA = Net Income / Total Assets

ROA = Efficiency of Asset Usage

But, isn’t Social Media an investment ?

Social Media is a time investment.

Social Media is a cultural investment.

Social Media is an expense .

Social Media = - Net Income

Social Media = + Brand Value (Recognition/$)

Social Media can influence the perception and value of your brand.

Social Media = + Customer List (Community Engagement)

Social Media allows me to efficiently increase # of engaged customers.

More engaged = more value .

Via Social Media you can generate measurable deltas in two key intangible assets .

Intangible assets are balance sheet items.

(In Case You Were Wondering .)

Business 101: + Net Income /Total Assets

+ Differentiation = + Net Income

+ Engaged customers = + Net Income

Business 102: + Net Income/ + Total Assets

+ Differentiation = + value to Brand

+ Engaged customers = + Value of Customer List

Successful Companies Have High ROAs.

Social Media can help you swing it.

Contact: Justin Whitaker MicroNiche Consulting Twitter: Justinmwhitaker Email: [email_address]

Forget ROI

by Justin Whitaker on Aug 10, 2009

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Forget ROI — Presentation Transcript