Tuesday, September 1, 2009

Mzinga Survey Shows Most Companies Don't Measure Social Media ROI

Toute le blogosphere is in love with social media, which of course means that some contrarians have to argue that it’s over-hyped. So it was interesting to see a survey (available here; registration required) show that social technologies are indeed widely adopted: 86% of 555 respondents said they are currently using them for business purposes, and 61% said it was an ongoing component of their business.

Caveat: the survey was sponsored by social technology vendor Mzinga in conjunction with the Babson Executive Education program, so they had a stake in the outcome. But I didn't see any obvious problems with it, and even allowing for some bias, the results still suggest wide social technology usage among a broad spectrum of businesses.

Probably the most interesting result from a marketing measurement perspective was that just 16% of respondents reported measuring ROI on their social media programs. No surprise, alas, but worrisome because programs that can’t prove ROI are subject to cancellation when money is tight.

Somewhat supporting this line of reasoning, the survey showed that just 40% of respondents had budget dedicated to social media and 57% had employees assigned to it. Perhaps many of those employees work for free, but a more likely explanation is that their costs are not part of project budgets because they're part of a vaguely fixed "overhead". This makes it easier to sustain a social media effort without formal economic justification. But it can’t be a permanent situation – managers will eventually realize that time spent on social media has a real cost. So justification of some sort will ultimately be needed.

Of course, that justification won’t necessarily be ROI. We all know that many traditional marketing investments are not justified on the basis of ROI, and marketing is by far the most common social media application (57%, vs 39% for internal collaboration, 31% other, 29% customer service & support, 25% sales, 21% human resources, 16% strategy and 14% product development). Marketing in social media could easily go unmeasured as well.

Indeed, just 8% of respondents said their social technology system could showcase ROI, vs. 41% who said it couldn’t. An impressively large 44% didn’t know, which I interpret to mean that they didn't care enough to find out. So I think it’s safe to say that ROI measurement hasn’t been a major priority.

The other intriguing figure in this survey was that 55% of respondents said there was no feature/function that they'd like added to their social media platform. REALLY? They can't be trying very hard: I mean, I can think of features I’d like added to a light bulb.*

If people are satisfied with their tools in such a rapidly evolving space, they probably aren’t using them for much. Or, to put it more charitably, maybe they recognize that they’re not taking advantage of what’s already available and feel they should master that before looking for anything more. Either way, this suggests that most deployments are quite immature.

One final factoid: 61% are integrating social media within their Web site or other sites, vs. 40% running standalone community sites and 39% deploying as social widgets in third party sites such as Facebook. I’m surprised that community sites and widgets are so popular. Maybe these are signs of experimentation. Anyway, it’s food for thought.

My general take, then: the survey shows wide testing of social technologies, but little deep engagement. Without a firm economic or other justification, there’s a good chance that the efforts won’t be sustained. So it’s up to social technology gurus, and vendors like Mzinga, to start demonstrating not just what social technology can do, but what makes it worth an investment.

* How about an indicator that shows how long until it burns out? Preferably with a wireless Internet connection that alerts me when failure is imminent.

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