Forrester Report Discusses Social Media ROI
Forrester Report Offers Analyst Look at Social Media ROI
Forrester Report Offers Analyst Look at Social Media ROI

Forrester Research has produced another interesting report, this one focusing on perhaps the hottest topic of the social media world over the past year: The ROI of Social Media Marketing. The piece, primarily authored by Forrester analyst and friend Augie Ray, offers what Forrester calls a balanced scorecard for measuring the ROI of social media, complete with expected Forrester graphics and interview-based insights.

Measurement unit
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Ray uses the 1996 book The Balanced Scorecard: Translating Strategy Into Action by Drs. Robert Kaplan and David Norton to offer the argument that the best way to measure the impact of social media is through a wide range of metrics that are both directly and indirectly financial. The report says a balanced social media marketing scorecard will consider and monitor effects across four perspectives that balance the short- and long-term implications while looking at direct and indirect financial implications. These four are:

  • Financial metrics
  • Digital metrics
  • Brand Metrics
  • Risk Management

The report goes on to detail how to measure them and calculate your ROI.

While I applaud Ray and Forrester for being perhaps the first research organization to recognize that measuring success is more than just measuring the bottom line, I have to say I was a bit disappointed by this report. First of all, ROI is a business metric, not a media metric. Stop calling measuring social media marketing success a calculation of “ROI.” It’s not if you’re measuring all of what social media can do.

There’s also a lot of what social media marketing does that isn’t covered in their reporting mechanism. My own presentation from the Social Media Success Summit this year outlined five areas of benefit for a company’s social media marketing efforts and details how to measure them. They are:

  • Branding and Awareness
  • Building Community
  • Customer Service
  • Research and Development
  • Direct Sales

I’ve added Reputation Management to that presentation since. While I’m sure you could spin each of those into Forrester’s four, and I make no claim to be the know-all and end-all to what social media marketing knowledge or opinion, it almost seemed like they edited down the various benefit areas of social media marketing to fit on an X-Y grid.

Is the report useful? For Forrester clients already paying a subscription fee, sure. But there’s a lot of great wisdom about measuring social media success out there that could have made this report better … and that’s not including my own.

If you really want to measure social media marketing success, you don’t need this report. You need to ask what you were trying to accomplish with social media marketing. Based on that goal, ask yourself if you accomplished it or how far you got. Pull your measures from that and you’ll know how you did.

There’s more information on the unfortunate topic of the “ROI” of Social Media available on Exploring Social Media for a considerable amount less than a Forrester Report.

NOTE: Exploring Social Media, an online learning community, is in active BETA. Should you choose to subscribe, know the tool is still being tested and the full array of its content and functionality is not yet available.

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About the Author

Jason Falls
Jason Falls is the founder of Social Media Explorer and one of the most notable and outspoken voices in the social media marketing industry. He is a noted marketing keynote speaker, author of two books and unapologetic bourbon aficionado. He can also be found at

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