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Yes you can! No you can't! Left. No, right! The debate about the value of social media continues.
Last week Altimeter Group and Wetpaint released a report that purports to show that companies with high levels of social media engagement also enjoy higher levels of financial performance. The top two examples in the report are Starbucks and Dell. Mark Walsh wrote an article found on Mediapost discussing this report. In it he pointed out that financially Starbucks has had far from a stellar year.
Additionally, I realized that if the preliminary Gartner numbers found at MacRumors are correct then from 2Q08 to 2Q09, of the top 5 world PC manufacturers only Dell has seen their marketshare drop (a whopping 18.7%) and during the same period their revenue (according to Edgar via Yahoo Financials) has been flat. My skepticism only increased.
However, when I first read Mark Walsh's article describing the report I did not have a copy of the actual report (I do now) so I did not investigate further (and obviously did not publish anything). However, Larry Dignan over at ZDNet does have a copy of the report (which you can download using a link from his post or acquire at www.engagementdb.com) and his concise articulation of his skepticism is well worth a read.
To make matters somewhat more interesting they same day also found on Mediapost was a study from Workplace media that questioned the ability of social media to deliver additional revenue. (The full report is free from the Complimentary research section at Workplace.) Yes. No. Left. Right. Executives and decision-makers can understandably feel as if they are on unsure ground. Now what?
What to Do
Organizations looking to make initial investments or further investments in social media should first precisely articulate the target audience for these efforts and establish clear objectives for the initiative before doing so.
If your target audience utilizes or is receptive to particular forms of social media and any of the following are true
- You wish to get your proverbial organizational feet wet
- You wish to build improved channels of communication with your clients and prospects
- You wish to have a better qualitative understanding of your prospects and clients
devoting financial resources, time, and attention to social media may be well-advised.
If your target audience utilizes or is receptive to particular forms of social media, you are looking for a hard, direct financial return and the following are true:
- You have a quantitative, data-driven understanding of the internal mechanisms/business processes of the part of your business you wish to improve (ie. marketing, product development, customer service)
- You have a quantitative, data-driven understanding of your relationship with your prospects and/or clients (ie. level of engagement, conversion rate by channel, communications metrics)
devoting resources, time, and attention to social media may be well-advised. Having both 1 and 2 above does not mean you don't need a strategy, you're all set to go, and success is guaranteed, but if either 1 or 2 is not in place you are better advised to build those capabilities before investing in social media. In this situation, if you do invest in social media you may in fact achieve a positive ROI, but you will have no basis for knowing so.
Lastly, if your target audience and/or its influencers does not utilize, seem receptive to, nor is likely to utilize any social media within your planning horizon you will likely get as much if not more of an ROI by sending me a check for the amount of your planned social media initiative than actually executing the initiative. I, at least, promise to send you a thank-you note!
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