As the former owner of a small business, I felt instinctively that the hype surrounding Social Media was sweeping people along to an early cash and time flow deficit. I was delighted then to discover that those fears had been eloquently expanded upon by Olivier Blanchard in his book Social Media ROI.
The idea that you could just jump on the bandwagon to a land of milk and honey struck me as ludicrous. If the foundations of a solid business are not in place the bandwagon will not get you far, and if you think that ‘likes’, ‘retweets’ and ‘followers’ will pay the bills, think again.
This blog post – What every CEO can learn from Procter & Gamble’s Robert McDonald – by Blanchard, in my view drives the point home very well (albeit a bit long). In summary he quotes from a story in Business Insider wherein it states:
“Reality appears to have finally arrived at Procter & Gamble, the world’s largest marketer, whose $10 billion annual ad budget has hurt the company’s margins.”
THE CEO has realized that spending more on advertising is not having a positive impact on sales. He goes on to talk about the many other options available and cites
One example is our Old Spice [viral] campaign, where we had 1.8 billion free impressions and there are many other examples I can cite from all over the world.
Blanchard notes that when talking about traditional advertising Mr McDonald relates spend to sales yet when he mentions social media he is in the land of ‘free’ and ‘impressions’, ignoring the various costs of production, man-hours etc etc; and why now impressions instead of sales?
If the CEO of Procter & Gamble seemingly can be seduced by the shiny new wagon I guess the owners of far smaller enterprises can be forgiven for jumping aboard without first kicking the wheels.
Quite simply if your social media strategy is not tied to solid, measurable, business outcomes I recommend you save a lot of time, head straight for the bathroom, open your wallet, tip and flush.
What do you think? Is social media part of a strategy that should have a measurable ROI or simply something you must be part of come what may?
Image credit Richmanwisco