The Value in Social Media Isn’t ROI. QOE = Value
This post is driven from a series of conversations I’ve had over the past few weeks. The key point, the real core value I hope you take away from this post comes from Ronald Gruia (@rgruia). If you don’t know Ronald, you should listen to Sheryl’s Incidental Interview with him from last week. He’s a highly respected analyst with Frost & Sullivan, and one of the most thoughtful, insightful people I know. A recent video of Clay Shirky talking to the State Deparment also heavily influences this post.
Ronald and I had a riveting conversation around social media and Return on Investment (ROI). In the telecom world, like much of business, managers look for monetary return on investment. As old skool media has been in what I see as death throes, new media has stepped to the forefront. Old media was about broadcast. New media is about conversation.
Clay pointed out that this moment we’re living through is the largest increase of expressive capability ever seen in human histroy. The Internet is the first media to have native support for groups and conversation at the same time. Because of this, the many-to-many pattern of conversation replaces the old one-to-one and one-to-many broadcast approaches to message marketing and delivery. New media communications is DIFFERENT and many people don’t understand they must engage at a different level.
All media messages get digitized. The Internet is simply the transport for every type of medium. But now every medium is next to another medium. Messages are adjacent to other messages, other markets, other conversations.
Every new consumer today is a new producer in this new media world. It’s like every book turning into a printing press. And the Internet is still changing even among us early adopters who know how to use it. Change is constant. Change is accelerating. The old skool cannot keep up.
Today the transmission ecosystem is a complete new organism. In the past, we distributed a message to the edges. From the inside out, we bundled and sent the same message to everyone. That’s very expensive. That is OVER!
Now the audience can talk back. Yes, it is freaky, but you get used to it. The most insane part of this change is that the the audience is no longer disconnected from each other. They can talk to one another. They will. They do. And you have no control over that conversation. All you can do is join in and be part of it.
Social media has no direct correlation to ROI. If you’re asking what the value of a tweet is, how many sales will come from a Facebook fan page, or how quickly you’ll recoup the marginal production costs for a YouTube video, you are absolutely barking up the wrong tree. That return is not something you can measure today with any degree of usefulness. If you’re working with some self-proclaimed social media expert who’s telling you otherwise, spit in their eye and send ‘em packing. You’re being sold a bill of goods.
The value in social media is the way it enhances the Quality of Engagement (QOE) with customers, partners, and colleagues. Even with competitiors. As a father and grandfather, I’ll put a different spin on this. Which engagement has quality in your personal life, a text message from your son asking what you’re up to, or an in depth chat while fishing or playing golf? Social media gives the opportunity for depth of conversation, raising the quality of the engagement. Quality engagements will be something we can measure over time. They will lead to partnerships, collaborations and sales.
QOE is the real power of social media. To gain higher QOE, we can’t blurt advertising. We can’t link dump in Twitter. We don’t spam. Broadcast is dead. Broadcast doesn’t work. Broadcast pisses people off.
QOE is engagement, conversation, and meaningful exchange of ideas. And even it it isn’t your idea, people have ideas that you may want to contribute valuable thoughts to. So contribute them. You, as a person, as a company, as a brand are known by the public conversation you engage in. You can’t do it by proxy. Nobody else can do it for you, especially not a consultant or expert who’s focus is building his or her own brand.
You own it. Don’t just accept that. Embrace it. Seize it. As Sheryl would say, take global accountability for you.
In a world where media is global, ubiquitous, social and cheap, everyone is a participant. Supporting groups through engagement is the key to unleashing your power in social media. The quality of your engagements will rise. And with increased QOE, the bottom line will take a positive turn. When you get good at that, you’ll discover a new metric developing that you will be able to measure. But what you’ll also find is that the more you invest of yourself, the more engaged you are, the higher your value becomes.
The epiphany hits home when you realize that measuring the ROI value of social media degrades your value. Why punish yourself that way when you could focus on building more value?
The choice isn’t whether we want to operate in this media. The question is how can we make best use of this media. It’s what we have to work with.
on July 13th, 2009 at 5:37 pm
Ken makes really great points. Quality of Engagement is far more valuable than old ‘skool’ media experts would like it to be. They would rather continue to broadcast a message. They believe that’s what they should do and after all it worked for 75 years so it’s good as gold to them. I would only say to people with that thought, why then are newspapers dying and tv stations floundering? Because no one wants to be broadcast to anymore. We want interaction and without it, your business doesn’t stand a chance.
on July 13th, 2009 at 5:39 pm
Here’s my reply from FriendFeed. For those interested, the conversation is going on there as well as here.
http://friendfeed.com/sherylbreuker/64b345c9/value-in-social-media-isn-t-roi-qoe-stardust
This is a conversation I really hope to see people get into. You talk about engagement all the time, but I find most people don’t understand that their focus on measuring some idea of “return” devalues their very presence. In some ways I think it ties back to authenticity. If someone is in social media for ROI, our hackles raise and we recognize their unauthenticity. Conversely we sense genuine engagement and place higher value on those bringing that to the conversation.
on July 13th, 2009 at 8:54 pm
[...] Originally posted here: The Value in Social Media Isn’t ROI. QOE = Value [...]
on July 14th, 2009 at 7:25 am
Very interesting and I completely agree – this is what we found when we were looking into post-impression action of a campaign in some research conducted recently. You can no longer just measure a campaign based on click throughs as people will be talking about it in the social media hemisphere and this is what we have called Return on participation / Return on engagement (ROP/ROE)
on July 14th, 2009 at 7:28 pm
[...] yesterday I wrote The Value in Social Media Isn’t ROI. QOE = Value, referencing some of the powerful thinking from Clay Shirky and others. This evening, I noted this [...]
on July 14th, 2009 at 8:35 pm
This is an insightful post – those of us in Social Media at times have a difficult time “selling” the client on why it’s so valuable and can get lost in metrics; i.e. SEO results, mentions, site traffic, comments, brand awareness, etc. In today’s “REO driven” economy clients want value and ROI at all times! But at the end of the day engagement coupled with brand engagement is so valuable. And, the more we can get the clients involved in the engagement the better.
on July 14th, 2009 at 10:27 pm
Hi Ken and thank you for your kind words. This was really a thought provoking piece and I liked your application of Metcalfe’s Law (if the usefulness of a telecom network is proportional to the square of its users, then the same should by extension apply to a social network application running on top of that network
. Albeit it is a very different Ethernet network than the one that Robert Metcalfe used back in 1980 when he came up with this thought, just after leaving PARC to found 3Com.
Measuring the Quality of Engagement is in itself an exercise that should enhance the quality of your engagement with your readers – I have a few thoughts of my own here, but the idea is to start simple, noticing some patterns of repeat visits to a site, posts, etc. and then gradually work your way to more tangible results. Different people would attach different value to distinct types of engagement (some more pragmatic business types would try to tie in some dollar figure associated with those interactions, while others would look at the bigger picture and try to associate new relationships that come as a result of that interaction, or new knowledge via a shared article, PPT slide deck, etc.). I am in the latter group but there could be other possibilities as well – let’s try to leave this canvas for now and see what other colors other readers might add to it…
on July 15th, 2009 at 3:55 am
Great article Ken, inspiring!
With social media nearly everyone in the world is indeed just a click away. The threshold is gone, it’s all free, real-time, and one could easily make 20 new acquaintances a day across the globe
Compare that to exchanging letters with your penpal across the ocean…
Social media obliterate frontiers, extend your horizon, and increase mutual understanding. You can reach out, but also be reached. You can single out contacts and get in deep or superficial, anything goes
But, in my opinion the very -very- best part is that you’ll also be able to follow those that inspire the ones that inspire you. You might actually inspire the person who inspires you, by inspiring someone else
It’s all about giving and getting at the same time. If someone unfollows you or you unfollow someone else, there’s no harm done. It’s not like deciding not wanting to talk to your neighbour anymore, which kind of complicates everyday life
It’s not only about QoE, it’s also about Quality of Relationships – we are actually getting better at dialogues, interaction and relationships because of social media
on July 20th, 2009 at 6:41 am
Very insightful article. I agree in principle with your arguments for QOE vs. ROI. The dilemma is, particularly on the corporate side, that managers and specifically c-level executives want to know what they are “getting” in return for the time (and thus expense) invested in social media marketing efforts. Unfortunately, for now we do have to put some tangible metrics in place to demonstrate the “value” of social media. I truly look forward to more advanced methods of measuring QOE/ROE.
on July 20th, 2009 at 7:43 am
I agree that its very tough to quantify and measure the ROI of social media. Indeed it is.
That said, QOE – quality of engagement – only matters to the extent that it is producing value… more value than its costing… some would call this ROI.
Return On Investment is always the name of the game for business – even when you can’t measure it. Just look at PR – that’s been the mantra of PR people for years. Even though I can’t measure 1 specific PR campaign very accurately, or even the whole darn continued campaign… I can get a much softer feel of whether or not its effective, and whether or not its worth the time spent.
QOE is nothing if its not producing a positive ROI. Just b/c that number is hard to calculate, doesn’t mean “more return than cost” is still not the primary objective. So long as a business’ goal is to generate a profit than ROI is a key marketing metric.