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Tuesday, June 20th

Today's must read: "The ROI of social media is zero"

Well, the ROI of course isn't zero, but this article by ClickZ's Augustine Fou is still a great read anyway! And it feeds into a recurring theme of this blog of sellng social media to internal clients.

The essence of Augustine's argument is that engaging with social networks often falls at the first hurdle.

That's because an old style measurement and evaluation model is used to try to look at the value of social networks. A measurement and evaluation model that's more suited to 20th century carpet bombing marketing — you pay x million to reach y million.

As Augustine says, that model doesn't work as you can't really play a numbers game. You are in no way comparing like with like:

“With TV advertising, it may require reaching one million people in order to get five to 10 of them to act (e.g. make a purchase). But, when people talk, share, and recommend, an advertiser may only need to reach five to 10 people in order to get the five to 10 desired actions -- making purchases.”

Image - Who is who

Update: In his true a picture is worth 1000 words style, David Armano makes a lot of the same points with this diagram (original post) about recommendations from trusted sources in the post consumer era.

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