There you sit, downcast, watching your social media investment proposal burst into flames. The CFO has just leveled the “fuzzy math” charge at you. The head of sales is yammering on about how he could hire another salesperson for your proposed social media investment, and he could guarantee X incremental sales.
There’s a devilish catch-22 at play here. As with any new touchpoint or technology, you can’t credibly project ROI until you make an investment, but you can’t get the investment resources without showing ROI.
How to skin this cat?
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Try the 70*20*10 portfolio argument (illustrated at left). The logic goes like this:
In any fiscal year, marketing communications spend should be reviewed at a portfolio level. Roughly 70% of spend ought to go toward “tried and true” touchpoints. Our organization is familiar with these touchpoints. We know their mechanics. We know the returns they deliver, or at least have benchmarks for what good looks like.
On the other end, 10% of spend should go to experimental efforts for which there is no in-year expectation of ROI. Of course, we’ll want to structure these efforts in a way that gathers data to seed future benchmarks, but we don’t burden them with an expectation of immediate results.
Finally, the middle 20% is spent on the most successful tactics of the 10% experimental bucket from prior years. These touchpoints are incubating—we should manage them to develop benchmarks for success. These touchpoints eventually move over into the 70% as the organization accepts them.
Over time, you’ll risk falling well behind your audience’s changing media consumption behaviors if you aren’t experimenting with at least 10% of your marcomm resources each year. It’s the old frog-in-boiling water bromide. Try that on for size the next time you face the ROI catch-22.
Other ideas for beating the catch-22? Share them with us via your comments below.
MLC Members: Looking for help making the case for social media? We’ve put together a social media business case template, complete with mini-case examples from companies like Comcast, DuPont, and Intuit—très handy, non?
