For my blog entry today, I chose the article published by Oracle titled, “Measuring Social Media ROI in the Enterprise: Myths and Facts.” My decision is based primarily on two factors. First, I am less familiar with the corporate context (e.g. the acronym ROI was completely unknown to me). Second, I am somewhat interested in the financial benefits social media can reap for companies.
The argument presented in this article is, simply, that the benefits outweigh the costs regarding transitioning to utilizing social media applications from a previously underused state. Many of these benefits have practical financial returns as well (e.g. attracting new customers and employees, improving customer relations). Additionally, failure to begin utilizing social media effectively in business practices, namely marketing, may result in falling behind competitors.
The argument made by Oracle is based primarily on their in-house data metrics and experience in this growing area of corporate marketing. One benefit of adopting a social media strategy is a massive array of data metrics available from most social media applications/sites (e.g. Facebook, Twitter, YouTube, etc.) p. 3). As stated within the piece, “data coupled with strong analytics capabilities save time and money by helping the organization make better decisions…” (p. 3). It is common to make the best decisions possible based on the available information; therefore, social media offer many data sets that can give insight.
In her article, “Social Media: Measuring the ROI,” Lisa Montenegro of DMX, a “premier Google Partner Agency located in Toronto, Canada” (p. 1), discusses the importance for businesses to take social media marketing seriously—before they get left behind. As she indicates in her piece, the ROI of social media lies based on how much marketing budget is available, and how much of that budget should be reallocated to social media marketing and customer-support (p. 1). A practical benefit regarding budgetary concerns is on social media’s ability to be tested and analyze on a small scale before moving to larger staff involvement. Nuria Lloret Romero’s published an article in 2011 examining the nature of social media ROI in relation to libraries. The author concludes with a major point: social media offers a highly accessible and relatively easy method for libraries to increase the “visibility of the institution and improve its service and its users’ experiences” (p. 151).
There are, however, counter-arguments to be made against large-scale resource allocation to social media applications. In “Busting the Myth on Social Media ROI,” Gretchen Fox’s argument supporting social media applications ironically presents several of the major problems in the context. First, many in the business and corporate community, even in marketing, remain unexperienced in interacting with customers outside formal contexts (e.g. support emails, physical store, office phone calls, etc.); on the flipside, customers have only started feeling comfortable interacting with (and complaining too) staff of business and organizations on social media sites (Fox, 2016, p. 1). The consequence of these circumstances requires companies to front costs associated with training staff to use these new modes of communication without full awareness of its potential for the company. Additionally, “it must be customized for each business” (Fox, 2016, p. 1). This fact results in companies having less information to work from in making decisions regarding the transition, as the process performed by other businesses may have little relevance to each other.
Further, some businesses may not find much application to social media utilization versus others. For example, businesses that based most of their profits on selling directly to other businesses (e.g. industrial supplies, commercial supplies, etc.) are rarely going to use communication methods outside formal channels (namely, email and phone). Building a social media presence will likely have little effect on the company, given those who use its service typically discover the company through connections and referenced individuals. Thus, the organization must accept a degree of risk if choosing to allocate resources to building a social media utilization aspect to the company.
References
Fox, Gretchen (2016, April). Busting the Myth on Social Media ROI. Forbes.com. https://www.forbes.com/sites/gretchenfox/2016/04/20/busting-the-myth-on-social-media-roi/2/#6ed3b1573b8c
Lloret Romero, N. (2011). ROI. Measuring the social media return on investment in a library. The Bottom Line, 24(2), 145-151.
Measuring Social Media ROI in the Enterprise: Myths and Facts (2014, March). Oracle. http://oracle-downloads.com/social-roi.pdf
Montenegro, Lisa (2018, January). Social Media: Measuring the ROI. Forbes.com. https://www.forbes.com/sites/forbesagencycouncil/2018/01/30/social-media-measuring-the-roi/#4982523e6d9f
Social Informatics: A Perspective 