ROI still unclear for the nascent social media channel as a marketing investment

Today, ROI is the king of all marketing objectives. Investors and executives alike demand to know how each marketing dollar invested is generating a return in profit, customer acquisitions, number of transactions or other selected benchmarks. Yet while ROI is the king of objectives, social media seems to be the queen of marketing strategies. Therefore, confusion results. Marketers are racing for the social media land grab faster than Tom Cruise in ‘Far and Away,’ but is a measurable ROI flag planted in the prairie? For most, the answer is ‘not yet.’ Here’s why:

First, most companies are not yet using social media effectively for marketing. Because this platform is still so new, most businesses are still in the experimental stage. They are increasingly present in the social mediasphere, but they are mostly passive. Their marketing says “follow us on Twitter, LinkedIn, and Facebook,” but most aren’t posting truly valuable content and they aren’t engaging with their customers in a meaningful way. Despite the chatter and lip service, businesses are not investing their financial and human resources in social media at a significant level. How many firms dedicate even 20 personnel hours per week to this medium? Not many.

Second, most businesses simply cannot quantitatively link an ROI to social media today. It is still largely in the brand building phase at this time. This will definitely change as the medium expands and matures. Businesses will have larger, higher quality, more meaningful networks with their customers. Once a critical mass of active followers is reached, they will be able to dedicate their marketing staff’s time to creating data-driven, valuable offers to customers and this activity will be trackable online.

I know some social media marketers reading this post might want to throw rocks and garbage at me for exclaiming this heresy, but take it easy. Measurable ROI will come for social media. Until it does, customer-focused marketers must keep pushing on, engaging their followers and fans in meaningful and valuable ways. When they do, riches await.