Social Media in 2011: Some Wild and Crazy Prognostications
January 1, 2011
Let me be upfront. I am not a social media type of goose. I know that most affluent people under the age of 35 comprise an important social media demographic. I know that most of the outfits that pay me money to dog work don not use social media in some obvious places; namely, customer support or whatever buzzword a 25 year old marketing whiz crafts between sips of a Starbuck’s latte. (More information about organizations limited use of social media for customer feedback is here.)
The article “10 Ways Social Media Will Change in 2011” is quite interesting. I find the 10 reasons a good collection of prognostications. (I do like that word from a Greek root that means foreknowing.) I want to comment on one of the predictions. I am pretty much okay with the other nine, but I have reservations about Number 6, ROI Will Be Redefined.
Image source: http://www.cantrip.org/stupidity.html
Frankly, baloney. The economy is in a tough financial weather system. Many search and content processing companies are struggling to keep their lights on. What available cash these outfits have is often spent running from funding source to funding source looking for an infusion of capital. There’s a lot of cash available for investment, but there are not many search vendors able to match the type of funding that Aster Data at $38 million and Palantir at $90 million have been able to snag in 2010.
The reason. Old fashioned ROI. One does not redefine ROI because people are communicating in old and somewhat refreshing new ways. ROI is, as I recall from my brain numbing days at a blue chip consulting firm, the ratio of income produced by an asset divided by its investment cost.
That’s an algorithm, a numerical recipe. One can invent a new recipe, but the old recipe is just a mathematical sequence, and it is not likely to go away next year or anytime in the next couple of years. I have no doubt that those who live by clinging to the latest online trend will manipulate the words “return on investment” and the acronym “ROI” into some wild and crazy, hip notion.
But social media is not going to get Microsoft or the MBA professors to toss out the ratio that every student, no matter how addled, to memorize. Social media delivers benefits and some of these benefits can be quantified. But change ROI? Baloney.
Stephen E Arnold, January 1, 2011
Freebie just like the comments about social media changing what’s baked into an Excel formula.
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