David Meerman Scott Loses It Over Social Media ROI

I was passed along this mp3 interview of David Meerman Scott (h/t @judbranam) being asked what the ROI of Social Media is. He likens social media ROI to measuring billboard or TV advertising and asks “what the return is of having the gardener Guatemalan immigrants out front raking leaves of the corporate headquarters?”. The segment ends with his boast of speaking at Harvard’s Business School so he can tell them that as educators and marketers they’re teaching the wrong thing. “Intent, bloggers talking about you and Google rankings” are things that can help but “don’t have ROI” (paraphrased). So without further adieu, David, I’m calling bullshit on your rant.

See, there is a return for those things. Let’s start with billboards and TV ads: It’s called awareness. When a state calculates the number of cars driving on an interstate per week and your billboard is along the side of the road there is a chance – a chance – that you looked up and people saw it. And those running billboard ads locally (e.g. “Get off here for the next McDonald’s!”) then make a decision whether or not to continue the billboard. TV runs along similar lines too. And guess what? I know it’s nice to stay soft on this issue and talk sentiment but those are table stakes today. The expectation is that brands are courting Twitterers and bloggers and taking care of pissed off consumers online.

I want to go back to the billboard and TV analogy and how you can’t measure ROI for social media, according to David. The “bullshit!” moment I had while listening to this mp3 is that you can measure tweets and blog posts similarly. See, the interwebs run off of these things called links. I post a link, share a link, click a link – and it gets tracked. And ultimately, the larger awareness play online – when credible and relevant – will lead to a click and action being taken. Sound familiar? By the way – for those looking to have a real ROI discussion: Tweeting involves reach and frequency, just like a radio ad. And as radio goes, you may have 1MM listeners but if you’re not listening to the station at that moment you didn’t hear the ad or take action on it because of the ad. The same theory applies to a tweet and Facebook status update by a brand or link posted by a fan.

Never Mind Marketing — What About Customer Service?

The other aspect of this that wasn’t even mentioned, aside from the explanation and topic of what David’s speaking about at Harvard, is why customer service wasn’t brought up. “The New Marketing” he speaks of isn’t marketing, it’s customer service to your communities online. And, FYI, there are a ton of tools out there to measure this type of stuff – which is why at most companies customer service is integrated into the social media mix. See, everyone keeps saying that PR and Advertising’s job has changed drastically – which it has – but the reality is that it’s customer service that plays a huge role in social media and has changed. Not what they do, just the medium under which they do it. And as a marketers I know the folks creating banners online with ridiculously low click through rates are crapping themselves because they’ve realized that a few tweets with the right offer to the right people can drive just as much traffic and sales as their million dollar online ad buy.

Do I think David’s completely wrong in his rant? No, and in fact I’ve similar frustrations myself years ago before recognizing that this isn’t marketer’s faults — it’s the fault of those out there spreading bad information. And I’m sure the students at Harvard will feel the same way.

Update: I want to clarify that David does mention several things that can be measured – blog posts, how people talk about you and Google rank, sales and inquiries through the web – all of which can be traced back to a sale. A sale. A sale which means there was a return. A sale which means there was a return on investment.