Measuring the ROI of social web tools

There's a really good post on measurement from those clever social computing types over at Headshift that explains how we should thinking to successfully gauge the ROI of social web tools.

They suggests that as traditional web tools are designed specifically to address one  issue or problem it's easy to measure their ROI. Measuring ROI on social web tools is more difficult since social tools can address several issues/problems at the same time and have multiple uses. Also - and perhaps most significantly - social websites are not really controlled by the producer but shaped and developed according to the community using it.

So...... the solution, Headshift suggests, is "[m]easurement is possible when implemented, a posteriori. Back to basics."

Or more specifically I would suggest, back to front.That is, setting made-up metrics, targets, returns, whatever... implies you can judge what your website is going to do or achieve specifically before you build it.

But what direction the site goes in once it's built or set loose into the live web is determined by its users. So the best way to measure it's effectiveness or success is to set measurement targets after the site has launched and it becomes clear where the community is taking it.

Or more broadly:

"The major shift we need concerns tools and our relationship with them. One lesson organisations can take from Web 2.0 is that social software is not some kind of "Deus ex-machina" - in fact, no single tool is. Tools that pretend to be one-size-fits-all solutions are aimed at lazy IT and procurement departments, not business people."

And once we accept that, then we need to adjust our understanding of how to measure these sites and their relationship with users. A relationship ultimely controlled and directed by the users themselves.

Technorati Tags: Headshift, measurement, ROI, Web+2.0, social software

Comments

[David Phillips]

Simon, One thing I am sure about is that monitoring, measuring and evaluating the reflections and interactions among 1.1 billion people who, from time to time and for a range of reasons through a myriad of online communication channels and then mostly only of interest to a few friends, is probably difficult. Any one who has the magic bullet is probably riding a magic carpet over a midden of bullshit.

The ROI of online PR is just nonsense. The very existance of the long tail of online presence means that this is not an investment issue at all (even if we could get some idea of value). Online content is an asset. Measuring assets is not easy when they are as intangible and wiki entries, blog posts or a giggle in Facebook. But asset evaluation is much more realistic and the change and online campaign makes to the asset base of the company is useful.

The next question is the effectiveness of the organisation to generate return on assets - including the online asset.

[Simon Collister]

Thanks for your thoughts, David. I appreciate what you're saying but I hoped I was rather talking about looking at a more general ROI rather than ROI of PR specifically.

I mean, we're no longer doing PR as it was so wwe can no longer measure PR as it was, can we?

How then do we measure assets? My point was only that as social sites are driven by users, any measurement - of assets, whatever - needs to start after the users have started shaping the site.