The Throne Behind The Power

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KOHLER, Wisc. – The answer was all around them.

Five panelists sat onstage considering the problem:  “Proving Social ROI to the CFO.” The occasion was the MediaPost Brand Marketers Summit.  The venue was The American Club, a resort where the WASPy tradition infuses every cubic inch of the sprawling campus, like the fireplace smoke that clings to the leather chairs in the hoary library.  Compared to this place, the Ritz-Carlton is a kibbutz.

The American Club is the palace that plumbing fixtures built in the town that plumbing fixtures built. Teeing off at Kohler’s Whistling Straits, one of the finest golf courses in the world, it’s hard not to wonder how many urinals underwrote the experience.

But back to the panel. There were five experts onstage, mulling over the problem of proving social media’s value to Chief Financial Officers, who tend to view even advertising as expensive smoke and mirrors of dubious benefit to shareholder value. Thus have CMO’s been obliged to fixate on ROI metrics that often are themselves dubious, and in any case do not conform with any standard accounting notions of return on investment. The quants say these modern metrics can somehow isolate a correlation between a given piece of spend and sales lifts. And maybe they are right, but the CFOs of the world would be forgiven for rolling their eyes.

So now comes social media and the justification exercise gets genuinely absurd. What a scene: five very smart executives sitting in comfy executive chairs uncomfortably – if not embarrassedly – invoking such fuzzy “metrics” as engagement, awareness, shareability, recency, sentiment and KPI s. A KPI, of course, is a key performance indicators,  i.e., a factor so obviously without statistical basis nobody can bring themselves to even call it a metric. 

Some scary things were said, such as the repeated references to social “campaigns.”  Social, of course, is no place for campaigns. It is no place to drive brand messages, or to excessively dangle brand offers or to in any way be nakedly transactional.  It is a place to cultivate relationships with people who, for whatever reason, have an affinity for your brand. Social is a place for sharing, helping and seeking common cause with individuals who relate to you.  Mounting campaigns there is like handing our business cards at the neighborhood picnic.

Unfortunately, the obsession with metrics leads directly to exactly the sort of heavy-handed  campaign mentality that denudes the social space of the very authenticity and spontaneity that makes it so special. Jim McCain, manager of global customer relations management and social for Amway, spoke eloquently about the value of ongoing dialogue to direct-selling organization, but then made my heart sink by speaking of data-informed posts: grading response to various social content so as to later, “replicate the tonality or topic of successful posts.”

No. No. No. That is not social. That’s direct mail.

Erica Barth, vice president products and partnerships at Resolution Media, was as close as anybody to articulating the central fact the C-suite needs to understand:  “It’s not just another line item I’m putting in a media plan,” she said. “It’s a lot of small interactions that can add up over time.”

Just as ordinary human relationships add up over time. Social is the place where there can be segments, but there cannot be targets. It is not about conquest, any more than friendship is about conquest. It is about shared interests and shared values that can be the basis for priceless but utterly immeasurable lifelong relationships. Customer relations management fits in, the odd offer fits in, but manipulation has no place. And if you do it right – on the subject of “adding up” -- the resulting trust and loyalty increase your lifetime customer value and reduce your promotional spend dramatically.

Grant Munro, managing director for strategic accounts at Syncapse, spoke of a Coca-Cola initiative called Coca-Cola Rewards, in which Coke drinkers could take a bottle-cap code onto the brand’s fan page and register for a prize. This created tracking data so the brand could model the relationship between social behavior and purchasing behavior.

That’s fine; it’s always good to know what’s happening out there. Yet, in a way, the deep dive into behavior is irrelevant -- just as the question addressed by the panel is irrelevant.  Proving social ROI to the CFO? Nobody needs to do that, because no brand can opt out of social. Every brand is in social, whether they spend a penny there or not. It is a fact of life forevermore.  The only question is how thoughtfully you will participate.

Which gets back to the venue for all of this: Kohler. The five-star resort, the four golf courses, the spa, the beach, the restaurants, the dead-animal skins, the smoky libraries –  they are all here because the company  recognized existing technology and brought it to the world. That technology was indoor plumbing. This palace was literally financed by the throne.

As the children’s book sums up the marketplace so nicely, “Everyone Poops.” Even employees and customers and vendors. Yet has any CFO ever demanded the ROI on the men’s room?  Of course not. We need to have a place for our hygiene activities and that’s that. No key performance indicator necessary.   

So when the CFO demands for justification for your output, just say, “Sure, if you’ll give me the justification for yours.”

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4 comments on "The Throne Behind The Power".

1. Ron Stitt from Fox Television Stations
   

   commented on: July 2, 2012 at 11:30 a.m.
   I can't disagree with your premise, and in the end, if you've got an organization that's social-oriented, it becomes as natural as drawing breath. But, there are issues of tools, and a small number of dedicated social media point people that an organization should have, that do have $ attached. Which is where the CFO comes in, so for some of us, formulating the best approach for that conversation is important.
2. Frank Eliason from Citi
   

   commented on: July 2, 2012 at 4:26 p.m.
   Bob, Many of the marketers are trying to measure the ROI of pushing a message out, as opposed to the most important aspect in a social situation, which is listening to what is being said. Social presents as with so much data, yet oftentimes we concentrate on ourselves. My background is Customer Service, and we very well know that field has struggled justifying themselves so service has become known as a cost center. But when you listen to the conversation through traditional channels or social channels, you can gleen insights that lead to process improvement, product improvements and often times new products. Each of these are very measurable with a direct impact to the bottom line. This is imperative for a Customer service oriented business, but can also be applied to most other businesses. Social is still about listening, which has been a struggle for many firms to do right. Unfortunately we focus the listening efforts on strictly the brand or watching for the next fire instead of using the information throughout the organization to drive business results and hopefully create positive social discussions of the brand. Thanks! Frank
3. Michalis Michael from DigitalMR Ltd.
   

   commented on: July 3, 2012 at 10:23 a.m.
   Bob, I love your title and I like the humour in your article especially the last part about justifying the existence of toilets with a metric :). I also agree with you when you say that no brand can opt-out of social. I do have a different opinion though about some of the things you write. Here they are: - I do firmly believe that engagement which can also be measured as time with the brand, along with sentiment are important metrics and they can deliver an approximation to ROI. Companies spend millions of dollars for 30s TV spots but on a facebook fan page with a game or an interesting discussion you can have consumers spend 10 minutes with the brand. Depending on how many they are it could be a worthwhile marketing investment. - Where you say that KPIs are not metrics and do not have statistical significance again this may be the case but some KPIs can be designed to have statistical significance. - I do believe we can speak of social campaigns. I do not think it is inappropriate at all to have a call to action on a facebook fan-page or to advertise on facebook (that in my book is a social medium campaign). - there can be segments but here cannot be targets you say. As a matter of fact social is a great place to target consumers based on their expressed views online, by using active web listening. Bob I look forward to your response and everyone else's comments. Best Michalis
4. Robert Madison from Spiral16
   

   commented on: July 3, 2012 at 11:50 a.m.
   If I understand you correctly, the logic is this: No brand can opt out of social, just as no person can opt out of pooping. They’re in it whether they want to be or not. OK, fine; it’s a fair analogy. However, it’s completely misguided to jump from that analogy to that of the CFO demanding the ROI on the men’s room. You haven’t connected enough dots yet. In fact, we’ve done monitoring for companies where the cleanliness of the restrooms – or lack thereof – was directly tied to future spending. (As a general rule, dirty, nasty restrooms lead directly to customer dissatisfaction, which leads to them going someplace that is willing to keep their restrooms clean.) If I’m the CFO for a national restaurant chain, I’d want to know that at least *somebody* within the corporate structure gave a damn about clean restrooms. So, to your point that since all companies are in social (whether they realize it or not), and since social is as natural and as inevitable as pooping, that all companies should be exempt from even trying to justify the return, I most whole-heartedly disagree. While I agree that most (if not all) companies are in social, the necessary listening represents a real *investment* of both time and money - even if the company uses internal staff who in turn use free listening services – and as such, necessarily drags the “R” of ROI into the discussion. Where there is an investment, any CFO worth their salary is going to want to know what the return is, even if it’s uncertain and/or speculative. So when the CFO demands for justification for your output, you most definitely should NOT reply, “Sure, if you’ll give me the justification for yours.” Just. Don’t. Do it.

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