Fame (or Attention) is the New Rich

by Francesca Rheannon

Companies are increasingly turning to social media to boost their brand and reputation. But what's the ROI?

It used to be we'd talk about wanting to get rich and famous; the two desires just seemed to go together naturally. But now, in the era of social media when "content wants to be free", they've become uncoupled. The kind of fame that is counted in "eyeballs" on social media is the new must have currency, while the money -- well, maybe not so much.

I happened to pick up a copy yesterday of the industry magazine, "Book Business". My eye was caught by the article headline: "Socially Active: How Chronicle Books increased its Web site traffic and gained more than 14,000 followers on Twitter in less than a year." The writer went on to claim that Facebook and Twitter are two of the top 10 sites referring back to the company's website. That's a lot of followers, but how much will that translate into higher book sales?

At a panel on the book business at Social Media Week (#smwnyc) in New York last week (I reported on it at CSRwire's new blog, Talkback), one author said he still doesn't know if all the time he spends blogging, tweeting and posting to Facebook -- instead of writing -- is boosting the number of readers who buy his book. One audience member at another panel plaintively asked, "What's the ROI? (return on investment)"

That's a good question, in more ways than one. As far as profits go, social media tools like Twitter, Facebook and the mobile apps like Foursquare are too new to really tell us whether they will result in a higher ROI than more traditional methods of advertising. (Of course, it helps that Twitter and Facebook don't charge for their accounts, but there are costs in time and salaries to do social media marketing right.)

Clearly, companies are betting that social media will "move product", as PepsiCo's Director of Digital and Social Media, Bonin Bough told the overflow crowd at the SMW panel his company hosted, "Putting the Social in CSR." As the panel's moderator, Jamie Daves said, "Social media has the power to motivate people to share marketing messages."

But while many companies seem to be using social media largely as a new way to push ads to eyeballs, PepsiCo has decided to use it to improve its sales by doing good in the world. The company decided against taking out an ad at the Superbowl and threw its money instead behind the Pepsi Refresh Project. It's giving millions away in grants to fund "your" causes: i.e., visitors to the site get to nominate an organization or project (up to 1000 nominations a month); the social media masses then vote on causes in a variety of areas, from health and food/shelter to arts/culture, neighborhoods and education. PepsiCo is offering $1.3 million so far in the effort.

But using social media for philanthropy is risky and raises a few questions about ROI -- not whether it will result in more sales of PepsiCo's products, but how much good it will really do? In other words, what's the social ROI? In our fad-driven culture, it's tempting to jump on the next, coolest thing. And the idea of social media calls up such wonderful "goods" as democracy, openness, transparency, and participation. (Sometimes too much transparency: when the Pepsi Refresh site went live, it ran into a security glitch: people proposing their projects for funding found their private data was being shared with other petitioners.)

But are the social media masses really going to help PepsiCo give its money to the most effective projects working in the most needed areas? As I write this, my voting choices on Pepsi Refresh include shipping Girl Scout Cookies to the troops stationed overseas (ranked #1 for the $5,000 grant) and helping seniors take care of their pets (ranked #2). Not to deny our boys their Thin Mints or Fido some kibble from Grandma, but I would rather put my money into the hands of foundation grants officers that actually have experience in funding good projects in areas they know are important.

But let's give PepsiCo its due and assume that good, important projects will get money they would not have otherwise. I want to ask a tougher question of all those companies who are using social media to "do good" in the hopes of "doing well". What if the ROI is less monetary and more social? What happens if social media projects that do good in the world bring you eyeballs, but not much of a payoff in increased profits? What if the social media campaign isn't even as effective as other forms of marketing? Would you still "put the CSR into social media"?

I hope so. I hope you are willing to have less profit in return for more social good. And it’ll be good for you, too. Many in the CSR community talk about "externalities" in reference to the harm private companies do to the public's welfare by pursuing their own interests. But there's a funny thing about social good. It has externalities, too, only they weigh in on the positive side of the scale. A healthier, kinder, saner society reaps blessings not only for the public, but also for companies. When a business helps to maximize social wellbeing by protecting the environment, paying workers well, or refusing to sell harmful products - even if it means taking less in profit - it will rebound to the company's benefit in the long term, in more prosperous customers, better infrastructure, and more long term stability. Even if nobody finds out about it on Twitter and Facebook.