The ROI of Blogging

Forrester has released a paper researching the “why” and “how” of what they call “external blogging accountability”.

Many large companies stand on the brink of blogging, yet they are unwilling to take the plunge. Others, having dove in early, now face the challenge of managing existing blogs without the ability to show that they effectively support business goals. While blogging’s value can’t be measured precisely, marketers will find that calculating the ROI is easier than it looks. Following a three-step process, marketers can create a concrete picture of the key benefits, costs, and risks that blogging presents and understand how they are likely to impact business goals. This, in turn, enables marketers to answer the key questions, such as whether to blog or not to blog, or to make smart choices about an existing blog.

The paper investigates the need for measuring the return on investment (ROI) of organisational blogs and the limitations to these calculations. In addition to the actual calculation Li et al have identified three factors to determine the return:

• Quantify and value the key benefits of blogging
• Estimate the costs of blogging
• Incorporate the risk calculations in the ROI model

The measurement of ROI of technology within the organisation has always been a key factor in the motivation for its cost of ownership. As blogs, and new media in general, are more intensively marketed to, and adopted by, organisations the measurement of the total cost of ownership and their return on investment will be critical. Whilst the “cost of ownership” of the research paper itself is inhibiting at US $379.00, it will be interesting to observe the various permutations of the blogging ROI model as organisations gain experience with this technology.

Another article of relevance published by Forrester is one which explores a case study on the calculation of the ROI of blogging. The case study takes a look at General Motors‘
implementation of corporate blogs. What I found most interesting though, was the ROI model used by GM. Instead of making use of a traditional monetary-value measure, or the popular “page hits” used by most bloggers, GM measure their value of return by “the number of press mentions” metric.

Forrester used the process outlined in the associated Best Practices document, “The ROI Of Blogging,” to calculate the ROI of General Motors’ FastLane blog; but, this is not merely an exercise to generate a number. Using scenarios, General Motors can understand the risk and impact of increases and decreases of a key metric the number of press mentions on the value of the blog. With this knowledge in hand, General Motors can make critical businesses decisions, such as whether to invest heavily in innovations that will rekindle press attention.

Tags: ROI, blog, general motors, forrester, research

This is a repost of a post I originally published on chilibean, a blog I co-author on.