How Much Does a House Cost?

I don’t come from the “there are no dumb questions” school.  For example, in an academic environment, I would define a ‘dumb question’ as one in which the answer should be easily known had the student read the assignment or attended the previous class.  There are a lot of dumb questions asked all the time and social media gets more than its share of these.  Many of them are specific to social media measurement/ROI.  For example:

• Which has higher ROI, Twitter or Facebook?
• What ROI should I expect from Twitter?
• How do I measure the ROI of social media?

The flip answer to all these questions is, it depends.  All results are contextual.  Results are also specific.  While industry averages may be interesting, averages mask any real meaning for an individual brand or company.  They result in ‘one size fits none’ thinking.  Let’s go back to our house analogy and bring this to life.  The cost of a house depends on several factors:

• Where is the house located?  You’ll need to know the city and the specific neighborhood.  You may also want to know which block the house is on within a given neighborhood.
• How large is the house in terms of square feet?
• How large is the lot?
• Is the house new or previously owned?
• In what condition is the house?
• What is the level of finish-out?  For example, granite versus tile countertops.  High-end appliances or mid-range?
• What are the desirable or unique features of the house?

In social media measurement we have our own list of questions to ask before attempting to answer generally stated questions about measurement and ROI:

• What brand/company are we speaking about?  The answers for a well-established cult brand will be very different from those of a less well-established brand.  Answers for eCommerce companies will vary from those of B2B companies.  Answers will also vary by industry segment.
• How long has the brand/company been participating in social networks?
• How much investment in social media marketing – time and money – has the brand/company made?  What has been the level of effort?
• What other communications channels (e.g. advertising, direct, search, public relations) are being utilized in parallel with social marketing?
• What is our point of view on the role of social media in the marketing mix?  For example, is the role of social media primarily to drive exposure to content or is the program or initiative designed to drive conversion events through social channels?
• What were/are the specific objectives of the program or initiative?

This last question is especially important because measurement is fundamentally about assessing performance against stated objectives.  When someone asks you how to measure something in social media your first response should always be this question – What were the specific objectives of the program or initiative?

The question of when to expect a return on social media efforts is also an interesting one.  Brands often expect an immediate ROI on social media efforts.  Social media marketing is a process not an event.  Too often people forget about the ‘I’ aspect of ROI – you usually have to make an investment in resources and time before you can drive a return.  It is wise to listen to social conversations before engaging, and build your presence and trust before trying to drive conversion events.  Listen and learn and then convert.  I would argue the majority of social media efforts today are likely in the investment phase and not the return phase.  It is somewhat unfair in these cases for the social media effort to be held to an ROI standard in the short-term.  Measuring impact rather than ROI is advised.  Perhaps we can add another question to our list of dumb social media ROI questions – ‘What ROI should we expect in the first year of our social media initiative?’

If you are one of the prescient humans who has a crystal ball that enables you to answer the ‘how much does a house cost’ question, I have another question for you, ‘how long is a string?’