The Social Media ROI Challenge: Are We Making Progress?

The Social Media ROI Challenge: Are We Making Progress?

This article 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.


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.

The Social Media ROI Question is Often Code for…

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:

  • Ridiculous Online Indulgence. In their disdainful dismissals of social media, detractors still highlight the (over)abundance of vapid and banal social media activity (e.g., people sharing what they had for lunch) and characterize the people who engage in it as shallow and narcissistic, with too much time on their hands.
  • Real professionals Only Interact in traditional ways. There is a clear bias among many professionals toward how things have “always” been done. The phone, and in-person exchanges – even email – are seen as inherently superior to newer forms of digital interaction. More importantly, the different types of exchanges are viewed as mutually exclusive rather than integrated and complementary.
  • Resist Out-of-the-box Ideas. In spite of all the media hype surrounding social media and digital technology, people are not particularly quick to adopt – let alone embrace – new ideas and thinking.
  • Reserving Our Interest/Investment until we see what others do. For better and worse, most senior professionals tend to follow more than they lead. Though there may be a strong desire to “keep up with the Joneses,” very few people actually want to be the Joneses.
  • Risk aversion Over Innovation. Even when they recognize that they probably need to move forward, fear – of the unknown, of failure, of unintended consequences – holds them back. The risks of engagement are always clearer than the risks of inaction.
  • Respect Our Idiosyncrasies and Inconsistency. If pressed, leaders and other experienced professionals would have a hard time defending their negative positions on social media and other digital technologies, especially relative to other positions and decisions. But many of them seem to expect others to accept their arguments at face value and not question or challenge them.

7 Faulty Assumptions Underlying Resistance

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.

  • Today’s digital capabilities are far greater than most people realize – and they’re expanding every day.
  • People need to think beyond software, to hardware and networks and analytics too (i.e., SMAC – social, mobile,analytics, cloud).
  • When it comes to software in particular, they need to think beyond specific platforms to the tools and technologies that comprise them.

Organizational leaders know the ROI of current practices for marketing, branding, selling, etc. – and it’s good.

  • The links between many current practices, such as advertisements and trade shows, is difficult, if not impossible, to measure.
  • The costs of traditional approaches can be much higher than comparable digital efforts.

Current communication and collaboration practices are efficient and effective and cannot be improved on by leveraging new digital technologies.

  • The limitations, challenges, and frustrations of email are well-known.
  • Many in-person meetings are considered an avoidable waste of time.

It’s appropriate to hold new practices – particularly new digital technologies – to higher standards than existing practices.

  • People need to be willing and able to critically examine current approaches. There should be no sacred cows.
  • The relative value and utility of different approaches should be determined based on a fair assessment.
  • It’s unrealistic to expect any approach to working to be frictionless or “drag free.” There are always going to be costs; the question is whether the benefits outweigh the costs.

Leveraging new technologies requires adding them to rather than integrating them with or substituting them for current practices.

  • We should all be open to identifying ways to work smarter, not just harder.
  • The best approaches to achieving goals/objectives should be pursued.

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.

  • The only constant in the Digital Era is change. Expecting things to settle down is unrealistic.
  • By the time the laggards choose to engage, it could be too late. At a minimum, they will have missed out on a number of potentially great opportunities.

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.

  • As in other aspects of running an organization, there are no silver bullets.
  • Success in the Digital Era requires a new mindset, as well as new knowledge and skills. Learning new ways of working is unavoidable.

We’re Making Progress (Slowly) – But Obstacles Remain

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.

It’s also important to remember that ROI is about investment, not just return. The ROI question makes the most sense with respect to specific, short-term, focused campaigns. Decisions regarding general, long-term engagement should be driven more by an organization’s mission and values than its financial objectives. Short term and long term goals must be balanced in developing both a digital engagement strategy and specific tactical plans. Even with short-term initiatives, it’s important to focus on relative costs and returns, not just absolute outcomes like generated sales.

Over the years, I have seen small but potentially significant changes in people’s attitudes toward social media ROI. I have heard less resistance, and although there is still some reluctance, the acceptance of new realities and the need to understand (if not embrace) them is increasing. But my optimism is tempered. Though there may be fewer questions about social media ROI, there is 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.

Your Thoughts?

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.

6 thoughts on “The Social Media ROI Challenge: Are We Making Progress?

  1. Since you asked for comments. The ROI is code for section is typical of people who can’t answer the question so they somehow manage to blame the asker. Just for me personally, I couldn’t imagine doing business with you, simply on the basis of that. Demeaning the asker, who may well have something to add is more a reflection on you than anything else.

    So, in kind. Is this whole article a “code” for, “well, heck, I don’t know how to show ROI, so I’ll just say it’s dumb and the people who are looking for it are dumb”?

    Putting aside the tone you use, ROI is a complex thing, but it IS an accounting term that is standard and refers to cost vs. revenue. Social faces many of the same issues as other things like ROI of training, etc. It is possible to evaluate some of it, but the cost of actually measuring it is so high it often outweighs the effort.

    • Thanks for your comment, Robert. I agree that the ROI question is often legitimate, and when it is I am happy to address it. I never encourage anyone to increase their digital engagement unless doing so is a rational approach to achieving their goals and objectives. But as I noted in the opening, “All too often the ROI argument has been used as a smokescreen and/or a form of filibuster against moving forward.”

      As someone with an undergraduate degree in accounting and a former CPA, I’m well aware of the purpose and complexity of measuring ROI. Given that, we need to take a sophisticated approach to evaluating it, especially in the context of adopting new technologies. I believe the totality of my post addresses that need for sophistication.


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