Social Media PR expert is right on digital PR ROI and AVE, but also wrong

Posted in Blog Entries:, Digital PR, Social Media, Traditional PR on April 5th, 2010

By Craig

Stuart Bruce of the very talented Wolfstar has dug up a very good blog post to the age old argument about social media ROI and included some pops at PR AVE. All of it is in response to an article by Cathy Wallace in PR Week.

And he’s right, but there’s a slight problem in that he’s also wrong…Stuart bemoans – and has for many a month – that AVE – Ad Value Equivalents – are a waste of space and time as a measurement (for those who don’t know what an AVE is: a page in a newspaper costs £10,000. If I get you the main coverage in that page, then the value – the AVE – of what I have done is £10,000).

He goes on to point that that when it comes to Social Media ROI it’s great that you can’t do AVE (though I know some idiot PR types who have asked bloggers and reporters ‘how much is an ad on your web page costing?’).

Now I don’t disagree with anything Stuart says. AVE’s are ridiculous as are many forms of ROI. Tracking links and conversions aren’t the only ROI for social media or digital PR activities. Heck, as anyone has seen me pitch, my opening line is normally “How many more sales will social media make you? None.” And from there we go to show you how you can improve sales and customer engagement (that line alone should show you what also matters as well as sales).

But numbers do matter. Yes, a good online campaign will last – potentially forever as it is on the web – but we live in a recessionary era where most people need some form of numbers to justify costs and investment. To that end, many need something that they can show to their bosses, something to justify a spend, numbers to justify winning an award (of which Wolfstar have won many):

Number of people who have joined a campaign, compared with previous time scale
Number of people talking about brands
Number of people clicking links to go to online stores
Number of people downloading items
What’s the most popular web pages
What’s the cost of being somewhere

It may not be about the numbers but they help in many cases. Even online, many things contain a number reference, we like numbers. And all of these numbers can be justified in way or another as a ROI or cost of social media or digital PR. But most of that still misses a point, which ties us into this blogpost’s free piece of advice (as of today, all blog pieces will contain a free piece of advice at the end)…

Free Social Media Digital PR Tip: Start at the end of your social media work. Define what you want to achieve – and what you don’t want to achieve – and then work out what matters, what the tools should be and so on.

In closing Stuart makes the very relevant point which not only starts a debate of its own, but also (depressingly) reminds us that AVE is probably here to stay for a while yet:

The PR industry has been trying to crack public relations measurement and evaluation for 100 years and still haven’t managed it. We’re not going to crack social media any easier.

Gordon White

When the people ask me about the potential ROI from Social Media activity, I give them a perfect way to calculate it very accurately that is as follows:

Calculate the ROI on everything they do – advertising, PR, business networking events, business lunches, free advice, charity donations, answering telephone enquiries, pitching, submitting proposals, staff training, speaking engagements, etc. etc. Once they’ve calculated the ROI on all of this, they can attribute the unaccounted part of their return to their social media activity.

The point is there is no way to accurately calculate ROI on many of their activities so why get so hung up on Social Media ROI?

As you wrote in an earlier blog post, “it’s the mindset of seeing what others want, listening to what others want and engaging with them if you want their money.” If you truly buy into this mindset then you will soon know through your engagement if you are getting ROI.
Barry Hynd

I’m by no means an expert on social media but I probably also come from the school that there isn’t really an expert in this because it’s so new with no real established rules.

To say ROI on social media is “the bit left over” after calculating ROI on the others is surely wrong? I would agree to some degree that the ROI is very difficult to actually work out but people should realise that social media is a very slow burn, the people that are now getting the benefits of it are people who seen the opportunity long before social media became a buzz word.

I do agree with your last point Gordon that probably the best way to really measure if you’re doing things right is by seeing that people are infact engaging with you but that’s only the start of it. Like I said in another post social media is just one of many marketing channels any business should have. All you’ve really got is potentially at best someone that likes you and the messages your business puts out but that’s not the whole equation. At some point it also needs to be taken offline and the relationship develops to a point where there is mutual trust and then business could be done. Again this is just my view and i’m not an expert.

I like your tip about starting at the end Craig it actually makes a lot of sense
Stuart Bruce

We agree on AVEs, but we also agree that numbers matter. However, measurement and evaluation isn’t the same as just counting. Social media is great for things like counting visitors to a web page, numbers of re-tweets etc, etc. We’ve done campaigns where more than 100,000 visitors to a website is a failure and less than 100 is a success. What matters most is clear communications objectives, based on (but not always the same as business objectives), that can be ‘tested’ to see if you’ve succeeded.
http://network.podcastmatters.co.uk Gordon White

Barry, my comment about the bit left over was a bit tongue and cheek, I was trying to make the point that people get involved in all sorts of networking and and marketing activities where they can’t possibly measure the effectiveness or ROI.

I’m glad you made the point about about it having to be taken offline, I couldn’t agree more and it’s a point that’s often overlooked. At some point, especially in a B2B situation, you have to transfer the online relationship and convert it to a successful offline relationship, I would suggest this is when you really find out about the effectiveness of your social media engagement.

Wouldn’t mind reading the post you referred to about “one of many channels”, also a very valid point that we are constantly telling clients. Maybe you can let me have the link.

Stuart’s point about clear objectives also makes a lot of sense – good advice.
kdpaine

The reality is that many organizations HAVE been very effectively measuring the impact of their social media measurement programs, mostly on the non-profit side. The reason it happens in non-profit is that there are fewer silos and they are more willing to share information. if the major corporations took this approach, there would be all kinds of ROI being demonstrated
http://www.craig-mcgill.com Craig

An interesting comment KD, thanks!