(August 28, 2013) This post addresses the social media ROI (return on investment) question, focusing in particular on whether we're making progress in terms of the challenges put forth by organizational leaders and other experienced professionals who have been resisting increased digital engagement. Playing off the ROI acronym, it provides alternatives for interpreting the ROI argument. It then articulates – and counters – seven assumptions on which the resistance arguments are often based. The post concludes with some indications that leaders may be moving away from specious arguments and balancing concerns about ROI with the equally important COI (cost of inaction), while noting that significant obstacles still remain.
In January of 2012 I wrote a blog post entitled The Social Media ROI Challenge: What it Really Means (and 7 Related Faulty Assumptions). In February of this year I revisited and updated my thoughts on the question of social media ROI, extending the ideas to the adoption of other new digital technologies as well. In conjunction with moving this post from the SMinOrgs S.M.A.R.T. Blog, I've once again updated my thoughts to reflect my experiences over the past six months.
Technological advances continue to outstrip the willingness and ability of many organizational leaders to address the opportunities and challenges they present. When it comes to social technologies in particular, skepticism has been widespread, and often manifests itself in questions about the kind of return on investment (ROI) leveraging these technologies can produce.
These questions seem perfectly rational on the surface, and it appears that leaders who ask them are fulfilling their fiduciary responsibilities and acting as good stewards of their organization's limited resources. But looks can be deceiving. All too often the ROI argument has been used as a smokescreen and/or a form of filibuster against moving forward. In my experience, when organizational leaders and other experienced professionals talk about social media ROI, they’re not just referring to Return On Investment. ROI, in fact, is often code for:
Generally speaking the resistance arguments contain a number of implicit - and often faulty - assumptions. Here are seven of the most common, along with my rebuttals.
Social media technologies – particularly the public platforms like LinkedIn, Facebook, Twitter, YouTube – represent the complete range of digital technologies available today.
Organizational leaders know the ROI of current practices for marketing, branding, selling, etc. - and it's good.
Current communication and collaboration practices are efficient and effective and cannot be improved on by leveraging new digital technologies.
It's appropriate to hold new practices - particularly new digital technologies - to higher standards than existing practices.
Leveraging new technologies requires adding them to rather than integrating them with or substituting them for current practices.
It will all settle down (or maybe go away?) at some point, so why bother engaging and suffering through all the chaos before it does.
It's better to wait for a "silver bullet" solution than to invest in the necessary hard work now to climb the required learning curves and lay a foundation for future success.
It's perfectly appropriate for individuals and organizations to decide not to take more advantage of the digital capabilities that currently exist, as long as they're making informed decisions. When it comes to organizational leaders in particular, they have a fiduciary responsibility to understand the new environments in which their organizations operate so they can provide the proper guidance, both strategic and tactical, as well as the necessary resources their organizations need.
As a practical matter, digital technology is only going to continue to advance, and the longer people wait to understand and embrace it, the more risks they take with respect to creating and maintaining their own success. In addition to being concerned about the ROI, in other words, they should also be thinking about the COI – the Cost Of Inaction.
When I updated this post in February, I was optimistic because I had seen recent signs of encouragement. I noted that I was hearing less resistance, and that although there was still some reluctance, the acceptance of new realities and the need to understand (if not embrace) them was increasing. I also cited several specific examples from my own recent experiences that gave me hope.
Now, six months later, my hope has dimmed somewhat, not because of ongoing questions about social media ROI, but primarily because of ongoing ignorance and insufficient pain. I'm constantly reminded how little senior professionals understand about social and digital technologies - and how much they don't know what they don't know! They also continue to be consumed by short-term priorities and fire fighting, which detract from their ability to think more strategically about how leveraging social and digital technologies can help them achieve their goals and objectives and enhance their future prospects. Intellectually, they know they need to do something and they want to, but the forces for change are still not strong enough to compel them to take action. Simply put, leveraging new technologies, though important, is still not particularly urgent. Until it is, progress will continue to be slow.
I recently published It’s Time to Get Serious about Digital Technology. Seriously!, which expands on some of the ideas in this post and recommends seven specific action items that leaders and other senior professionals should take.
I welcome the insights of others as to whether and how we're making progress on the social media ROI question in particular and the larger Digital Era issue of new technology adoption by organizations and their leaders.