Use Social Capital to Measure Social Media

26 Apr

It seems there is a rush to spend money on social media and therefore a need to justify social media expenditures by return on investment (ROI). Of course measurement is necessary, but please use the right measurement. ROI is not the right measurement for most social media efforts. Here is a post by Helen Reynolds that proposes measuring influence.

It seems that ROI is trotted out as an all-purpose measurement tool for anything. It has become a buzzword because businesses use it to calculate a stream of financial returns on an investment. ROI uses dollars and is simple to calculate. It is commonly used in MBA school for figuring returns on capital investments such as factory additions.

Social media is about networks, relationships, reputations, expertise, writing ability, influence and even humour. Dollars may enjoy common use but they are not the right measurement for social media. Let’s take a clue from the Social in Social Media and use a measurement from sociology rather than business. Ever since Bowling Alone by Robert Putnam, there has been a great deal of research into social capital. Social capital is about connections within and between social networks.You can measure relationship strength, communication frequency, group ratings, perceived expertise and many other measures that are a much better than dollars and have a great deal more content validity.

Associations should be as concerned with measuring the social capital of their association as they are measuring their financial capital, perhaps more so because in the final analysis for an association, it is the social capital that creates the financial capital, not the other way around.

 

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