When it comes to social media, is engagement more important than ROI? Why/why not?

What many folks tend to overlook is ROI is a numerical reflection of your strategy. Thus, it's part of the strategy and not separate from it. And if you want to have a positive ROI, then you need a strategy that will support getting the business results that will pay out over time.

Engagement is beneficial - but what is the intended business result? Engagement in and of itself isn't enough. The end result should reflect building towards increasing shareholder value in some way - increasing revenues, lowering costs, etc.

Keep in mind, a negative ROI can mean one of several things. One is that your strategy and tactics are not sufficient to meet your goals - but *could be* with strategic enhancements. Another is that you flat out don't have an economic program. And if the latter is the case, then your efforts are best focused elsewhere.

There's another common misconception about ROI. Too many folks assume ROI must show an immediate payout. Not true! Instead, what's important is the ROI be placed in appropriate context with the strategy and supporting tactics. If the payout will take time, then set executive expecations accordingly.

Ardath said it well - what's most important is making sure you're clear on your goals - and are able to measure against them.

Engagement is a marketing term, ROI is a financial term - ideally they should be complementary.

If there is no possibility of ROI, then why would we commit funds to do it?

Correctly using Social Media to reap any positive benefit takes up a good deal of time (and $). Why waste the time if you see no ROI? Engagement is great but without the marriage what is the point?

In the end, people don't buy engagement. They buy ROI. The problem is that ROI is more difficult to measure with social media. I have seen (and experienced) very little ROI from social media activity. Most of what I have seen has been rah-rah vs. $/ROI oriented. With that said, we actively invest time and money in social activities. Like anything else, experimenting with social media will give way to focused, ROI driven social marketing spend. We, and most others, are just not there yet.

I recommend that you break your marketing spend into three groups: Owned (CRM/database, website, blog...), earned (social, twitter, organic SEO...) and paid (PPC...). Optimize owned, then earned and then paid. Investments in earned (such as social) will not pay off without excellent, owned, marketing assets.

Engagement in social media can work for you or against you. If you do not understand the social aspects of it it will work against you. Social media is not the place to perform the hard sale as it is easy to click past you. Engagement is important if you are trying to build trust in the community. The ROI will not be instant but it will come once it is seen that you can be trusted. How do you build trust? By providing information and tips that have value to the target market. Once you have established trust the social media market can work for you.
To get a better understanding of this I suggest the book Trust Agents by Smith and Brogan.

Expand your definition of ROI to include not only a direct monetary return (we spend $1, which generates $1.50), but also other returns that your company finds valuable and can measure.

Many companies have important business objectives that don't lend themselves well to simple dollar metrics. How do you measure and apply value to customer retention? Customer satisfaction? Customer evangelism? Customer loyalty? Some of those objectives are not primarily measured in dollars because they don't directly convert to dollars in a predictable or objective way. But that doesn't mean they're not being measured or valued, and some marketing programs are meant to drive those metrics more than revenue generation or cost savings.

So as others have said, a clear understanding of goals and objectives for your social media (or any other marketing) efforts are critical to measuring how well it's working and making smart decisions to improve its effectiveness (which is ultimately the point, isn't it?).

I'll go strictly from experience on this one Lauren. I did not think about my time spent in social media and the return on investment I would get when I jumped in. I thought only about the importance of a presence out in the vast market space I occupy. Reading what was available about the best approach yielded the same advice over and over: be consistent in your channels so that your name / brand would be associated with your topic, product or service. That has turned out to be right for me. Search engine optimization folds back into a consistent message, my name, and my topic. The channels I have chosen and stuck with are working. I continue to seek and be open to other avenues but avoid the shotgun approach. Colleagues have asked how I do it and the answer is DO IT. They are "thinking" about it but get wrapped up in the spreadsheet and ROI aspect. I think the real problem is they don't equate it with marketing. There has to be a break in mindset about the old framework of marketing (at least there was in my mind). Now that I understand the "social media, marketing, be consistent approach", the messages, posting, blogs come second nature as a seamless part of my day-to-day work.

Ms Albee is right in saying that you won't get ROI without engagement. The point of social media for businesses is to generate leads and that is done through engagement. Social media helps company with things such as product/ service development, customer relations etc. This in turn helps with ROI. Check out this webinar for more help. If you have any more questions on online marketing feel free to contact me.

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