“Social media marketing is similar to the venture capital model- you don’t invest in 1 firm & hope for the best, you invest in 50.” @dmscott
The ROI of Social Media, HBS Recap & David Meerman Scotts Comparison to the Venture Capital Model
David Meerman Scott- Harvard Business School: How and Why Social Networking is Revolutionizing Marketing
- Generate Leads
- Increase web traffic
- Generate publicity
- Gain attention from bloggers
After you have answered some of these questions, you can then begin determining if social media is the right vehicle for you. As a marketer & public relations practitioner, I ask my clients these questions before initiating any type of campaign. I feel it is vital to stress the point that as the entire social media industry is newly emerging, it is important to be ethical when determining if social media is right for your clients. For some clients social media may be the best vehicle, but for others it may not be. It is up to you, as their trusted social media consultant & social media agency, to truly evaluate if it will best meet your clients needs. If it is not right for them, you may have to walk away from the business or re-asses what area of marketing will best meet their marketing needs. A lot of people today say they want to be on “Facebook, Twitter and LinkedIN” but they are not really sure what it entails or how it will benefit their business. As their trusted consultant in this new industry, you have a moral obligation to break it down for them and honestly assess if it is the right move for their business given their objectives.
When I attended the Harvard Business School Social Media with David Meerman Scott & Tim Washer, David presented some interesting & powerful thoughts on the overall ROI of social media and compared it to the venture capital model. David said,
“We are not focused enough on reaching people enough in the way they want to be reached.
Take the Venture capital model for example- they don’t invest in 1 firm and hope for the best-they invest in 100- they expect that a high ratio will go bankrupt & hopefully a few of them will go public or be acquired for a ton of money.
The people who are successful in social media are the ones who are willing to fail- not every video or blog will gain traction. Just like the venture capital model, there’s bound to be something great that emerges and goes viral.
Social media is a different model for marketing- if you do 20 things, maybe 1 of them will hit. And while it is a leap of faith, if you are smart, if you choose well, if you are lucky a few more will hit.”
In summation, here are my final thoughts on the ROI of Social Media:
What social media is and what social media is not:
Social Media is an extension of corporate branding. As a client, you are paying for the ability to utilize modern electronic techniques to get in front of a targeted audience. Social media is not an advertisement and it is not a banner ad. Social media is inherently about branding to a focused audience. It is about the ability to quickly get in front of prospects, current clients and leads, and to establish an online relationship with them and build customer engagement. Social media marketing differs from traditional marketing in that it does not focus on immediately establishing the value of your services or products, but rather it is about establishing you as an icon and thought leader in the industry- to create an awareness of your name and brand. It is not a specific advertisement for a given product or service- it is about brand engagement. The type of results you should be looking to expect is similar to what you would expect from a long term branding campaign. Social media marketing is essentially a global awareness and branding campaign that takes time to develop.
In case you missed the event, I live tweeted from HBS & captured the most compelling quotes from David & Tim Washer. They can all be found on twitter.com/sparklingruby.
Nuggets of Social Wisdom:
“If I were starting a company right now- I would hire journalists- they are great storytellers. I call it brand journalism” @dmscott
“Social media marketing is similar to the venture capital model- you dont invest in 1 firm & hope for the best, you invest in 50.” @dmscott
“Whenever you implement a social media strategy, gain agreement on the rules , then convene bloggers, lawyers, marketing & PR” @timwasher
“Manage fear- fear is the greatest barrier to these new ideas. We have never marketed this way, we have always done it other ways” @dmscott
“Lose Control of your Marketing- If you want people to spread your ideas, you have to let them do it in their own language” @dmscott
“Old Rules-Buying attention with advertising, Beg your way in with the media, Bug your way in by selling. New media- EARN ATTENTION” @dmscott
“Everyone here can achieve the same kind of success in your marketplace but you must unlearn what you have learned about marketing” @dmscott
About David Meerman Scott
David Meerman Scott has written hundreds of magazine articles and wrote five books including the recent hit new book, “World Wide Rave” and an award-winning BusinessWeek number-one bestseller, “The New Rules of Marketing and PR” which is published in 25 languages. The marketing programs he has developed are responsible for selling over one billion dollars in products and services worldwide. David is a recovering VP of marketing for two publicly traded technology companies and was also Asia marketing director for Knight-Ridder, at the time one of the world’s largest newspaper and electronic information companies. David has lived and worked in New York, Tokyo, Boston, and Hong Kong and has presented at industry conferences and events in more than forty countries.
His speaking and seminar clients include Cisco, HP, Microsoft, the New York Islanders, NASDAQ Stock Market, the Province of Ontario, McKesson, U.S. Air Force, U.S. Marine Corps, SAP, Google, Digital River, Hill & Knowlton, Hanley Wood, Dow Jones, National Investor Relations Institute, the Fortune Conference Group, Milken Institute Global Conference, America Credit Union Conference, TS2, Giant Screen Theater Association, Self Storage Association, Realtors Conference, and many others. For more, see www.davidmeermanscott.com
About Tim Washer
Tim Washer is the Head of Social Media Productions for IBM worldwide. In addition to managing global production initiatives, Tim wrote/produced the company’s most successful YouTube series, “Mainframe: The Art of the Sale,” which was covered by the Chicago Sun-Times, Forbes and others, and was selected by Comedy Central as a “Staff Favorite.” His comedy TV credits include the Late Show with David Letterman, Late Night with Conan O’Brien, Saturday Night Live, and the Onion News Network. For more, see www.timwasher.com