Enough With Misusing Social Media ROI, Already


I’m a little tired of abusing the term “ROI” – giving it new meanings just so they can say they’re measuring it. “Return on Interaction”… “Return on Engagement”… enough already.

Breaking news: ROI may well not matter for your social media program. (Edit: At least, not as a direct, immediate metric.)

Except this isn’t breaking news – people just don’t seem to hear it.

Here’s a definition of ROI from Wikipedia:

“Return on investment (ROI) […] is the ratio of money gained or lost (whether realized or unrealized) on an investment relative to the amount of money invested.”

There’s even a formula:


ROI is a finanical term. It has a set definition, which carries plenty of weight in companies. However, that doesn’t mean you can always relate your programs directly to it.

For the formula to work, you need to know the cost and benefits of your program in dollar amounts. You should know the cost of your investment, but the gain may be hard to attribute (especially to a single factor). What’s the gain from improved customer service? From relationship-building? From increased employee engagement?

Sometimes you CAN identify a specific gain from your investment. Sometimes you can tie specific activity to conversions and have a specific value for those conversions. In those cases, you’re in luck – you’ve hit the communicator’s nirvana. The rest of the time, just accept it:

ROI may not be the right measurement for you.

Does that mean your program isn’t valuable? Does that mean you’ll never get executive sign-off? Does that mean it’s not worth measuring your program?


It means you find appropriate ways to tie measurement back to your objectives. Those last four words are key: “back to your objectives.” Because everything should lead back to them.

As we’ve navigated through this recession, we’ve seen clients become (rightly) more and more focused on measuring outcomes, not outputs. It’s music to my ears, because this gives us the opportunity to (a) measure the heck out of a program and (b) adjust programs to ensure they achieve the right results for the client.

Those measurements don’t have to lead to a financial formula; they just have to tie back to your client’s goals. Do they want to drive sales? Address customer issues? Be perceived as leaders in their market? I could go on and on. Each of these has different end metrics, along with different proxies along the way. They’re all valuable.

So, please – enough with “return on influence” and other variations on the term “ROI.”

The fact that you’re not measuring ROI doesn’t mean you’re not measuring success or impact. In fact, it may just mean you’re measuring the right thing.

What do you think?

Update: Oliver Blanchard made an excellent point that I neglected to include here – Ultimately, all of these measures SHOULD feed back to ROI. If your company isn’t tying its activities back to that eventually, you risk both the cost of an ineffective program and the opportunity cost of missing more effective investment elsewhere. I would add that there may be intermediate steps between your program and the ROI calculation. Making-up new metrics because you can’t tie directly to ROI does nothing to help you.

(Images: Investopedia, Shutterstock)

Dave Fleet
EVP Digital at Edelman. Husband and dad of two. Cycling nut; bookworm; videogamer; Britnadian. Opinions are mine, not my employer's.