Sigh. How Can You Prove ROI for Social Networking?

Two BIG QUESTIONS in Web 2.0 marketing --

How do we measure social media?

Web Analytics vendors are working on ways to capture social bookmarking, widgets, and social application events. Groups within the Web Analytics Association are conducting research, so that they can then draft measurement standards for use by professionals who need to demonstrate return on investment (ROI.)

How do we monetize social media?

Brands are starting to see revenue flow through channels such as Twitter and Social Networks.

source: Holiday Wrap-Up, MediaPost, Jodi McDermott, 12/19/08



In regards to Twitter, there's been a lot of talk about Twitter's lack of a business model.

But it’s becoming more clear that while a business model is of course important, Twitter is perhaps the perfect example of a company that can afford to take its time in finding the one that is perfect for it. That’s because other businesses are building so much on top of the micro-messaging service and using it for their own services. If worst came to worst, and Twitter had to sell, there would probably be a bidding war of a magnitude that would make it seem like this country wasn’t in the midst of a recession.

InternetNews has a good rundown of the Twitter/business phenomenon. Buried in it is this gem:

Less altruistically, some businesses have discovered that Twitter is an effective way of communicating with consumers. Dell (NASDAQ: DELL) says Twitter has produced $1 million in revenue over the past year and a half through sale alerts. People who sign up to follow Dell on Twitter receive messages when discounted products are available the company’s Home Outlet Store. They can click over to purchase the product or forward the information to others.

If Twitter has made Dell $1 million in revenue, imagine how much it’s making for all of the companies it helps promote. While a million dollars may not be much to a company like Dell, for some smaller companies that are also using Twitter as a sales/promotional tool, it is no doubt invaluable.

Twitter is expected to lay out its plan for how to monetize the service in 2009. It may involve creating premium, corporate accounts, which seems like a good idea given the numbers Dell is stating. But while everyone is busy getting in a tizzy over its business model, Twitter continues to gain popularity, including the all-important mainstream variety.

One way or another, Twitter will be fine — even if that still doesn’t make sense to some people.

source: Twitter has made Dell $1 million in revenue, VentureBeat.com, MG Siegler, December 15th, 2008

Go here for more information about "What Keeps Twitter Chirping Along."