With The Nielsen Company reporting that internet users have increased the time they spent on social networks by a substantial margin in August 2009 from just 6% to 17% and advertising spending on the top social networking and blogging sites more than doubling from $49 million in August 2008 to about $108 million in August 2009; everyone is looking for that miracle formula that will clearly define a Return on Investment that can be expected by adopting social-media, but unfortunately, it is just not that simple. If it were, ad-agencies and PR firms would have figured it out long ago.

While it is tempting to believe that there is a single, simple equation or calculator that can clearly define the Return on Investment that can be offered by social-media, it does not exist, especially when the goals and objectives of adopting social-media can differ for each company and brand – where one looks at lowering turn-over by having more engaged employees and another wants to influence the market that they occupy. Quantifying the Return on Investment by visitors and traffic severely limits the potential of social-media and how it can affect one’s bottom-line.

In order to ascertain any returns on investment, you have to take timelines into consideration – measuring the start and end of a specific campaign in relation to changes in sales and other metrics, and it’s the other metrics that really stand-out with social-media. The ability to engage an audience and targeted demographics in conversation, to measure the results of those conversations and refine products, ideas and other marketing messages. Listening to staff, developing capabilities and encouraging personal growth in those that work with you – this is new territory, and it’s governed by social-media…

LAUNCHING SOCIAL MEDIA STRATEGIES
We begin with a special article featured in Ross Dawson’s blog, showcasing the launch of the Social Media Strategy Framework that should provide vital basic understanding as to how social media functions in the world we know.

The Framework begins by LEARNING (Use social media yourself, Study relevant case studies, Educate senior executives, Hear from practitioners and Explore the latest trends), from where it then follows two streams of ENGAGEMENT (where we can listen, converse, measure and refine) and STRATEGY DEVELOPMENT (where we can prioritize, establish governance and define), all ultimately leading to the imperative to DEVELOP CAPABILITIES, which will in-turn allow us to return to LEARNING, where we can start the cycle again.

It’s no wonder people are asking for an ROI with facts and figures such as these:

300 MILLION AND ON
In a recent Facebook article by Mark Zuckerberg, social network giant Facebook are registered with 300 million people on a global scale. And it doesn’t stop there, it has been revealed that Facebook is aiming to reach out to EVERYONE! That’s right…every living person on the planet. On how that can be achieved, only time and strategy will tell.

PLANNED 2010 INCREASE IN SOCIAL MEDIA, SEO AND VIRTUAL EVENTS BY MARKETERS
Marketing Charts featured an article about a research by Unisfair, that explains the numerous strategies marketers are prepared to use in order to increase their outreach to social media in 2010.

MACY NOW DIRECT THEIR ADVERTISEMENTS TO SOCIAL-MEDIA PROFILES
As explained in an article by Nick O’Neil in All Facebook, Macy’s is the latest brand to promote their Facebook Page through display advertising campaigns around the web. The strategy appears to be working. Over the past month, the Macy’s Facebook page has grown from 28,000 to 67,000 fans.

Another interesting aspect of the company’s new promotion is that they are giving one meal to Feeding America for every Twitter follower that they obtain. By promoting this campaign through Facebook it seems weird that the company would direct people to become a fan on Facebook before following them on Twitter. Despite the confusing strategy by the company, what’s more important is the apparent shift from promoting the company’s own website to sites that they can directly engage users on.

AMERICAN FOOTBALL TEAM NEW ENGLAND PATRIOTS USES FACEBOOK AS PRIMARY ONLINE PRESENCE
When it comes to fan power, sports can make a sure bet of being the first to be given great attention into promoting that influence. And as described in an article in Inside Facebook, New England Patriots teamed up with Buddy Media to give primary source of online content for their fans.

Several of the features in the Fan Zone still link back to the Patriots’ official Web site , but the new Facebook page is intended to be their primary online portal for fans. Both the team and Buddy Media acknowledge that it’s much easier to bring together fans through Facebook, where followers of the team are already congregating. “It’s still very difficult to pull people into other gated communities. We think leveraging against Facebook is a no-brainer. The audience they have and their data speaks for itself,” said Buddy Media CEO Mike Lazerow, whose company also handles social media for sports-related clients like Reebok and Sports Illustrated.

Which brings us back to the ROI and Bogus Social-Media Experts:

Olivier Blanchard created an interesting article in The Brand Builder concerning the misuse of social media and the many frauds who use it without fully understanding its benefits and consequences.

Here’s a flash of obvious: When most of us don’t know how to do something, we typically know that we don’t know how to do it. Yet this line of logic (and basic sense of professional ethics) seems to escape a disturbingly large group of people who evidently have latched-on to Social Media as an easy meal ticket  – one to be earned, in many cases, on the backs of people and companies who don’t know any better.

This stuff isn’t just going to go away on its own. It’s great to see some folks in the Social Media management community speak out against this kind of BS, but they are the exception rather than the rule.

Below is another example of social media nonsense passing for expertise. I don’t want to make any assumptions about anyone’s motives in this specific case, so to be fair, it’s probable that whomever put this together genuinely thought that the thinking behind the equation and methodology was sound. There is no reason to think that anyone at Digital Royalty was trying to make a quick buck off unsuspecting clients when they developed this. (My guess is that they mean well.) But the fact remains that the people behind this thing don’t understand either Social Media or program measurement well enough to teach either, which is downright mind boggling.

WHAT IS THE ROLE OF ROI (RETURN ON INVESTMENT) FOR SOCIAL MEDIA
Jason Falls wrote an article in Social Media Explorer, regarding the discussion on how ROI for social media.

What Katie evangelized a bit in her session was that the conversation (comments on your content) was the best measure of a level of engagement. Avinash Kaushik says much of the same in his discussions on web analytics. This isn’t an end-around the need for ROI, it’s the answer. Or at least a big part of the answer.

When you ask businesses why they are participating in social media, what do they say? If they say, “to make money,” then they will fail because currency in the social web is found in both relationships and content. If they say, “to grow our business,” they’re just saying, “to make money,” in a nicer way. If they say, “to participate in the conversation,” which is the more appropriate reason to be involved in the social web, then why on earth would they not measure success by the value of the conversations they have? This is why every session on measuring ROI in social media is a waste of time. None of the measurement experts are going to make that point and that point alone because without throwing page views and unique visitors and number of subscribers and sentiment and tone, they have nothing to offer.

THE BONAFIDE MARKETING GENIUS VIEWS ON SOCIAL MEDIA
In these two videos posted on Posterous by the Marketing Genius, we can witness the impact social media has had on humanity and the many sectors of marketing frontiers.

However way we see it, social media has changed the face of communication and information as we know it. We may or may not know what comes next to take its place, but like all things, it evolves…

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