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What’s the ROI?


What’s the ROI? What’s the ROI? What’s the ROI? What’s the ROI? What’s…

Ahhh, you get the point.

If you’re in any way involved with social media for business, that’s a question you likely hear more often then the parents of a three-year-old hear “WHY…?

We’ve given you our two cents on the topic. Repeatedly. (Like here, here, here, and here.)

(Actually that works out to eight cents… but you can’t even get a gumball for that amount anymore, so what’s the difference? Onward.)

We’ve written about it many times, but we’ve never written an explanation we like as much as this one:

It’s the online business equivalent of jeans that don’t make your butt look big. Social media ROI is everyone’s holy grail of the moment.

In an interview, Sean Jackson (CFO of Copyblogger Media) offers an opinion sure to raise eyebrows.

Social media marketing is never going to produce an ROI. No marketing will…

Marketing will never produce an ROI because ROI is not what you think it is.

A pure definition of ROI is simple to quantify.

ROI = (Gain from the Investment – Cost of Investment)/Cost of the Investment

The problem for marketing professionals is that marketing activity is not an investment.

An investment is an asset that you purchase and place on your Balance Sheet. Like an office building or a computer system. It’s something you could sell later if you didn’t need it any more.

Marketing is an expense, and goes on the Profit & Loss statement.

While that’s sure to set off howls from some quarters (notably, the social media “scientists” who claim to already have worked out a fool-proof formula), we think it’s an interesting take on the subject.

NO investment, so NO return?

Whaddya think, folks?


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