web 2.0, blogs and social media

Charlene Li of Forrester Research has now released (blog post) her research paper into measuring the return-on-investment (ROI) of business blogging. I was promised a copy of the paper when I signed up for a webinar on the subject back in October, so hopefully I’ll be able to report in more depth soon without coughing up the $279 that Forrester is asking.

[Update: Yay - got my copy. May take a few days to digest.]

Li says that the report found six main benefits cited by those companies interviewed: “greater brand visibility in mainstream media on the Web, word of mouth, improved brand perception, instantaneous consumer feedback, increased sales efficiency and fewer “customer service-driven PR blowups.”

In relation to the GM Fastlane blog, researchers found that when all these factors were costed, the blog “generated $578,000 in value on an investment of $291,000″. Impressive figures. However, these benefits were measured against quite specific goals: “to share information about its products and to start a dialogue between GM leaders and customers” was a main one (or two). The report measures the cost of getting 100 people to comment on the blog, compared to the cost of getting equivalent customer insight through focus groups “at the cost of $15,000 a month, or $180,000 a year”.

This kind of begs the question – or two questions. First, are those two things equivalent? I’m a big fan of company blogs, make no mistake, but I am not sure they are. Second, what about if you only spent $5000 a month on those focus groups? Does that mean that your blog actually made a loss? Yes, it would, if your stated aim is obtaining that feedback and nothing else.

A similar case might be brought against ‘word of mouth’ as a goal. If you take the ‘advertising equivalent’ approach – a common, if unpopular, metric of PR activities – then you may or may not be able to show a return. But are those things ‘equivalent’? Surely, you’ve achieved something very different by not using advertising to stimulate word of mouth.

Lots of questions, and I’m not an expert. I guess my feeling is that:

(a) While attempts to distil blogging ROI into an Excel sheet are undoubtedly a very good idea, and perhaps the only way some marketing execs will be able to get the plan past the grumpy FD, I think it’s a good idea to make your aims fairly broad. Measuring the power of a blog against the cost of focus groups (or advertising; or traditional PR; or more service reps; or a longer development cycle) is potentially putting the blogging champion into a corner if the aforementioned grumpy FD turns round with an alternative, less costly plan to deliver the same result.

(b) It’s pretty hard to measure the returns on something that’s actually very different to its alternatives by costing up those supposed equivalents. Having a business blog is not the same thing as doing some PR, some advertising and some focus groups. It can allow you to achieve some of the same aims, but it also has its own unique benefits that aren’t easily achieved in any other way. I’d say that achieving the impression that people are listening at your company is one of the main advantages of the blog format, for example. So is having a better Google position for your CEO’s name. So is the ability for customers to talk to that person in an intimate way. The equivalence model doesn’t really help measure ROI on these benefits.

Check Li’s blog post – linked above – for a good list of blogging ROI FAQs. Look forward to getting my hands on the paper.

Technorati: blogging, blogs, Forrester, ROI

Attended the eighth annual Edelman Trust Barometer launch this morning (social media release here – hey – put down those pitchforks, angry bloggers!). I have to say it was a fascinating piece of research with all kinds of implications about how politicians, businesses and NGOs might change the way they behave and communicate in order to inspire greater trust. Quick hint to the many CEOs of multinational organisations reading this: socially responsible behaviour – in particular, attention to the global warming agenda, listening to employees and treating them fairly – is now one of the key stimulants of trust in Western organisations.

As far as social media is concerned, the subject of this blog, there’s not quite as much to say. The bad news is that bloggers come at the bottom of the trust league table according to the report. (click for bigger)

This year, only 6% of people in Western Europe view the blogger as a credible source, down from 10% last year. We’re even lower than a PR, for goodness’ sake! ;) Similar distrust was exhibited by US respondents.

That’s not quite the whole story, though, and I think we bloggers might be able to wrestle a sort-of victory out of the jaws of defeat. ‘A person like yourself‘ is the joint top-most trusted source – 45% of us would trust that sort of person – only doctors get the same amount of respect. And so who exactly are the bloggers that you read? OK, probably we all read some blogs that represent the opposite viewpoint to our own: it’s often inspiring and thought-provoking. Just like a Guardian reader might pick up the Daily Mail from time to time. But think about your favourites, the ones that make you smile and think ‘well-said’. People like yourself, I’d wager.

It all depends on how you frame the question. Do I trust bloggers? As a species, probably not. Do I trust John Smith, who I happen to connect with through his blog? Yes, I do.

Panellists made the same point about the distrust cited towards politicians. No, I don’t trust politicians (an appalling 16% rating in the survey), but yes, I do trust Tony Benn [insert your own favourite elder statesman, but I recommend Benn]. As Hugh MacLeod says in his piece about this event, “Trust has a personality.”

Similarly, perhaps, ordinary employees of companies are trusted dramatically more than their CEOs (28% versus 18%). In that case, who is it that you want spreading the good word about your products and services? The CEO blog is often very interesting and gets written about, because CEOs are powerful, mysterious and weird creatures; but in terms of persuading people to trust and maybe do business with your company? Supporting Jane in Marketing’s blog (or indeed Jane’s marketing blog) and giving her time to work on it may well be a better business move – and maybe those produced by a bunch of other people in the company.

More detailed coverage from David Brain here. But then he had to write a good post – he’s Edelman’s European CEO. Bloggers Stuart Bruce, Iain Dale and Hugh MacLeod (op.cit) were also in attendance.

Technorati: Edelman, events, trust