The Social Media MBA Guide to ROI

Let’s get things clear from the outset. Christer Holloman, the author of ‘The Social Media MBA Guide to ROI’ is a big deal. Hailed by the Evening Standard as ‘one of London's most influential individuals within new media’, Holloman is a regular media commentator and already the author of two books on social media. In this third book, Holloman sharpens his focus, selecting the ambitious topic of return on investment in regards to social media.

ROI is a key business principle - evaluating whether a level of profitability is acceptable given the level of working and/or human capital invested, and the return available from competing opportunities. At its core, ROI is about calculators and dollar bills - both of which feature on the book’s cover - something that is quantifiable and driven by simple equations. However, there is also another, broader way of looking at ROI - the avoidance of expenditure, improved customer retention, and (given the cost expended in building and maintaining brands) brand protection. If good use of social media for traffic generation can reduce spend on advertising, or retain a hard-won client, then it has some value - however intangible it may be - and it is this second definition that best encapsulates Holloman’s approach.

The 'measure ROI by platform' section includes brief introductions to each platform, with a review at the targeting and paid advertising opportunities on offer. These sections are required for readers who are new to the subject, and they avoid detailed study into the ROI merits of any particular channel. Interestingly, given Holloman’s assertion that Pinterest drives 41% of Ecommerce traffic in this chapter, it is curious that none of the case studies offered up in the second half of the book mention the image-based social network.

Holloman recognises the need for measurement to calculate ROI, and he proposes a number of tracking methods. Some are on right the money - for example the ubiquitous Google Analytics, which has powerful revenue tracking capabilities. Other suggestions are more questionable; for example, the author frequently mentions social media monitoring solution Radian6 - although the platform’s CMO points out that his product “does not deliver data that can be traced through the revenue funnel” - the funnel that ROI is typically concerned with.

The latter half of the book is given over to a series of case studies. The first, from CISCO, examines the ROI generated from merging a number of social media monitoring platforms together. Rather than needing to rely on short or long-term revenues from social media to justify their investment, CISCO were able to achieve the ROI they needed from the savings in licence fees and other associated costs alone.

In another case study, SME insurer BRAVEday shares how social media has become central to their way of doing business. Although they do not share any specific insights on their revenue return from social media, BRAVEday do claim that "the ROI is huge” and that they “now have a whole team engaged in social" - recruitment serving as a proxy to proof of ROI.

Although the case studies chosen fall slightly short of providing directly actionable advice, they do demonstrate how both big and small organisations perceive the value they receive from the time and resources they invest in their social media activity.

In conclusion, if you are looking for a step-by-step guide to calculate classically-defined ROI then this book isn’t for you. If however, you want to understand the opportunities in social media available to your business, and the different ways in which businesses define success, then you may find this book a useful investment.

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