The ROI of Facebook
What’s the ROI of Social Media?
That’s the critical question these days.
I hear it all the time.
If I invest my time and effort, or even hire some small gang of teenage experts to develop a “Social Media Branding Campaign” for my company, what’s the ‘Return on Investment’ or ROI? What’s the payback for developing a Facebook page, or a Twitter account or – God forbid – a few videos on YouTube? How do I know it’s worthwhile at all? How do I know it will ever generate revenue?
All valid questions.
But my rhetorical reponse is “What’s the ROI of happy hour at your favorite pub?” Or the ROI of that networking luncheon you attended last month? What’s the ROI of the half hour you spend socializing at the Country Club last weekend? Or having breakfast with a downtown service organization? What’s the payback? What did you “earn” after these meetings to justify the expense and trouble of violating your normal routine – and paying cash out of pocket – to attend these functions?
Of course the metaphor I am creating is that your Social Media effort is just the same as any other casual networking, except that you suddenly have a potentially-global audience. You are networking on a grand stage, and most people take it for granted.
Why Facebook? What’s the point of connecting with an old girlfriend or my cousin from Houston?
It’s a network, friend. And there may never be any ROI unless you use the social fabric of Facebook to spark interest in some unique way.
For example… one clever Dallas entrepreneur uses Facebook as a powerful tool to communicate with his clients, drum up attendance for weekend events at his wine bar, and create cash flow.
I interviewed him recently for my newsletter.
“We’ve generated several thousand dollars in revenue, at least, by using Facebook to promote events,” says Dallas wine bar owner Brooks Anderson. “And I really didn’t even start using it until the first of this year.”
Anderson leans against the slick concrete bar-top at Veritas, the Henderson Avenue lounge he opened with his brother last year. “Saturday afternoon would be competely dead in here,” he says. “but Facebook can turn it into an event that attracts 40 or 50 people. Suddenly, we have a profit!”
Anderson and his brother allocated nothing to market Veritas when it opened last June, and may never invest in traditional media. “Traditional media is kinda dead,” he says. “We may never do traditional advertising. I mean, I’m 35 years old. And I know that for myself and my generation, anytime we want to do something, we go straight to Google.”
Moreover, Anderson says Facebook has done what traditional advertising never could – helped him promote events at Veritas (many involve decadent cheese) to a receptive audience – at no cost.
The Anderson brothers – both civil attorneys – opened Veritas in June of 2008. They have learned to drive business on weekends by hosting local celebrity chefs for wine and food tasting events. And their only event promotions are done on Facebook and Constant Contact, an e-mail marketing service. “So that every time we have an event,” says Anderson, “there are at least a thousand people out there receiving a free message about the event.”
Pretty smart.
Of course, I’m a believer in Constant Contact, as well. It’s the vehicle I use for the BMG Newsletter.
So the next time someone asks about the ROI of Social Media, offer a glass of chilly Chardonnay and mention my friend Brooks at Veritas.
