Those who understand Social Media don’t talk about ROI

It is not uncommon to see people arguing passionately about “Social Media ROI”, thanks in part to discussion on the subject in Social and Mainstream Media. Businessweek recently published an in depth piece titled Beware Social Media Snake Oil.

It is important to remember that Social Media is just a medium for connecting with people (or customers if you prefer that term). It provides necessary platform or tools to reach out to millions of people instantaneously across time-zones in a cost effective manner. But since “Social” is just a medium, it doesn’t have any ROI of its own. ROI will depend on how well this medium is used for attaining a well defined objective. So ROI is for the “usage” and not the “medium”. Many people associate ROI with the medium and that is incorrect.

See this excellent interview with Lee Odden on Social Media Marketing and ROI. According to Lee, measuring ROI as a direct result of Social Media is not the right question. Social Media is a platform, not a tactic.

Moreover, Social Networks as a medium for connecting with Customers for branding and engagement is a very new development and unlike marketing through traditional media such as Television, Print or Radio, we are yet to fully understand how Social Media marketing affects consumer behavior. To borrow famous words of former Defense Secretary Donald H Rumsfeld, we don’t know what we don’t know about how Social Media influences consumer behavior. And in the absence of this understanding, it is prudent to say that those who understand Social Media don’t talk about Social Media ROI.

Rather than trying to measure effectiveness of Social Media campaigns through ROI, it is better to use other KPIs (for a good list, see 35 social media KPIs to help measure engagement).

So beware, next time some one talks about Social Media ROI, it is very likely that person is trying to sell Social Media Snake Oil.

What DARPA’s Red balloon contest can teach Social Media Pros

The Defense Advanced Research Projects Agency (DARPA) recently announced a Network Challenge to mark the 40th anniversary of the Internet. This challenge required participants to discover exact position of 10 large, red weather balloons that DARPA placed at undisclosed locations across continental United States. The first person or team that identified all the locations correctly would win a $40,000 cash prize. Aim of this contest was to identify ways social networking can help accomplish a large-scale, time-critical task.

As planned, this contest was held on December 5, 2009. A team from the Massachusetts Institute of Technology won $40,000 “high-tech scavenger hunt” by discovering the location of 10 red weather balloons first.

Team from MIT “Crowdsourced” solution to this puzzle by inviting people to sign up to help find DARPA’s red balloons (see MIT RED Balloon Challenge Team’s website for more info). MIT team plans to give away $2000 to the first person to identify location of each Red balloon, and also $1000 to the person who invited that person to join this contest, and $500 to whoever invited the inviter, and $250 to whoever invited them, and so on … (see how it works). Fascinating stuff isn’t it! MIT team not only planned their strategy well but also executed it brilliantly. And it’s no surprise that they won DARPA’s Red balloon challenge.

So what can DARPA’s Red balloon contest teach Social Media Pros? Several things in my opinion:

  • First of all, DARPA held this contest to identify ways social networking can help accomplish a large-scale, time-critical task. DARPA could have engaged Social Media consultants to help them figure this out and they could have spent endless hours debating and discussing about how Social Networking can accomplish a large-scale task. Instead, they chose to conduct a simple experiment through Social Media. Lesson for Social Media Pros is that rather than having a long debate on how Social Media works and how it can be leveraged, it is better to design a simple, low cost experiment and start using Social Media to understand how it works. Outcome of such small and inexpensive experiments are more valuable than having endless discussions on the subject. They are also far more cost-effective compared to time and travel cost of personnel involved in figuring this out.
  • Secondly, MIT Crowdsourced solution to this contest by inviting people to sign up to help find DARPA’s red balloons and also encouraged them to invite their friends to sign up. MIT team provided monetary incentive even if some one’s friend (or one of their friends (or one of their friends…and so on…)) found a balloon. Lesson for Social Media Pros is leverage reach of Social Media and have trust in wisdom of crowd. It is important to reward not only individual member for their winning contribution, but also those who brought them to the network thereby extending reach of network and making Crowdsourcing a reality.

MIT’s winning approach to solving DARPA’s Red balloon contest can be applied in business and government for finding innovative solution to complex problem cost-effectively and quickly. Added benefit is the buzz it can generate, both in “traditional” and “New” media resulting in free publicity and media coverage. For that reason alone, it is worth the money spent!

What do you think? What other lessons Social Media Pros can learn from DARPA’s Red balloon contest? Looking forward to your comments:

Social Media and Tribalization of Business

Excellent videos on Tribalization of Business and how Social Media helps in connecting with Customer Communities. Must see for those who belong to Social CRM and PR “tribe”!

Part 1:

Part 2:

Part 3:

Charlene Li – Future of Social Networks

Excellent talk on Social Networks by Charlene Li:

How will you Manage in Social Media Age?

Great video that highlights how workforce is changing and how we need to manage “socially connected” workforce – HR 2.0. There are no easy answers to this question, but two things I am sure about:

  • Very few HR departments have realized the challenge they face in managing “Socially Connected” workforce. Restricting usage of Social Networks by employees is not the answers – it is like having one’s head buried in sand, thinking problem will go away – Social Media are here to stay, employers must have a reasonable policy on “Responsible use of Social Media” by employees.
  • HR managers should engage their employees and potential employees through Social Media – the way marketers are engaging their Customers using Social Media – there is a great opportunity for “Social HR”. I haven’t come across good case studies on employers engaging their employees/potential employees through Social Media.

What do you think? What should employers do to engage their employees and potential employees through Social Media?

Howard Rheingold: Internet as Playground and Factory

Good video on Internet as Playground and Factory by Howard Rheingold. Interesting to note his view on “Principle of Informed Consent” – very important with reference to sharing of “intellectual” material using Social Media.

Visualization of Social Media Usage Around the Globe

Trendstream has published an excellent visualization of Social Media usage around the globe (for more details see Mashable).


Global Map of Social Media – December 2009

To download the full size version, click here

Some of the key highlights include:

  • Social web is mass market: Hundreds of millions of web users are creating and sharing content every month
  • Massive impact of China: Vast Internet population coupled with socially active set of web users makes for a massive volume of content creators. Due to the inward looking nature combined with language limitations, the volume of content has limited impact the broader Internet
  • Engagement in Japan: Huge number of Japanese users are bypassing PC altogether and using mobile devices to access social platforms and create and share content. Just over 34% of social network users only accessed through mobile compared to 3% in the UK, a staggering indication of where the future is heading
  • The low level of microblog engagement: Despite Twitter hype, microblogging is still not a mass social activity and nowhere near the size and scale of blogging

I think Social Media usage will grow exponentially between 2010 and 2012 (next three years) as more people become aware of Social Media tools. Mobile and hand held devices will become primary access points for connecting to Social Network. Social Gaming and location based services/advertising over social networks will see very fast growth over the next 3-5 years. What do you think?

How to Leverage Social Media: Southwest Airlines

Excellent interview with Paula Berg, Director of Emerging Media, Southwest on how to leverage Social Media. Check out their blog Nuts about Southwest.

Also see this blog post titled How to Measure Social Media -Southwest Airlines.

Case Studies: Social Media Marketing

Excellent collection of Case Studies on Social Media Marketing:

This collection provides several days (should I say weeks) worth of material to evaluate and understand how leading brands are using Social Media. Happy reading!

Social Media Use by Australia’s Best Brands 2009

Results of a study by Burson-Marsteller Australia on Social Media Use by Australia’s Best Brands are disappointing (refer to slide no. 22 for conclusions and takeaways):

  • About Dr. Harish Kotadia


    That's me with photo gear,  taking snaps of Texas wild flowers. #texas

  • Dr. Harish Kotadia

  • Dr. Harish Kotadia is an industry recognized thought leader on Big Data and Analytics with more than fifteen years' experience as a hands-on Big Data, Analytics and BI Program/Project Manager implementing Enterprise Solutions for Fortune 500 clients in the US.

    He also has five years' work experience as a Research Executive in Marketing Research and Consulting industry working for leading MR organizations such as Gallup.

    Dr. Harish Kotadia's educational qualification includes Ph.D. in Marketing Management. Subject of his doctoral thesis was Customer Satisfaction and it involved building a statistical model for predicting satisfaction of clients with services of their ad agency.

    His educational qualification also includes M.B.A. and B.B.A. with specialization in Marketing Management and Diploma in Computer Applications.

    Dr. Harish Kotadia currently works as Principal Data Scientist and Client Partner, Big Data and Analytics at a Global Consulting Company. Views and opinion expressed in this blog are his own.



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