Forrester research consultant Charlene Li has begun a project to address the important issue of calculating the ROI of business blogs. It’s too easy to simply say “blogs are good for your business because X, Y & Z”. That statement may be true, but when the hard-nosed Financial Director wants to know why you’re spending all this time and money on writing a blog, then you need a better answer. You need a way to measure — in specific terms — the revenue and savings generated by your blogging efforts.
Li has previously been quoted as saying that her blog could be associated with $1mn of revenue at Forrester, but ended up regretting having said that: “it’s a highly subjective, qualitative measure that’s hard to measure”. So how do you arrive at solid figures?
As she says, the benefits you measure depend on the reasons you started to blog in the first place. If the point is to drive sales then you have one metric — traffic from the blog to your point-of-sale; but if the point of it is to generate buzz, then you might develop a formula based on your Technorati ranking. She suggests taking the metrics you already use to measure the success of aspects of your business through more traditional marketing and PR efforts and adapt them to your blogging activities.
There’s also a very handy table categorising some of the different benefits you might achieve for your company from blogging, and how you might measure them:
Benefit | Appropriate measurement |
Consumer self-education | Higher conversion rate for blog visitors |
Greater visibility in search results | Increased traffic from search to blog |
Lower the cost of public relations | Generate the same level of awareness as PR |
Reach an enthusiast community | Lower cost communication tool |
Address criticisms on other blogs/news stories | Measure the slow down of bad news spreading |
More responsive to consumer concerns | Track customer satisfaction and retention |
Improve employee innovation and productivity | Track employee satisfaction and retention |
Improved stock price with greater visibility into the | Connect improved investor sentiment to blog readership |
Of course, it can often be more difficult than that. If you blog to be ‘more responsive to customer concerns’, it might not be very easy to separate the impact of your blog from other influences. Perhaps your product got better; perhaps you’ve employed someone really good in support; perhaps someone else is blogging tips about your product.
This is a fascinating project, though. Charlene and her team are looking for figures and case studies to flesh out the concepts and attempt to add some proof. I’ll certainly be following its evolution with interest.
Share this post:
Nice article Ian, it’s the immeasurable that eludes us, things like reaching the enthusiasts, increasing brand awareness. The blog (if you remove the adsense part) is really your personal billboard. Your online persona. I’m amazed how many political parties, businesses simply slap together a blogger account without thinking the message and the presentation. These folks probably do more damage than good to their reputation. I remember reading a great book about life being a series of presentations. Every blog entry is essentially a presentation.
Hi Vern. I’m sure you’re right. Unfortunately, though, the “grumpy FD” (or equivalent — almost every business has one) isn’t that impressed by the immeasurable, so companies have to justify blogging without any of those things, using those factors that *can* be measured. Unfair, yes. Real world, yes too.
[…] Like a number of you, I expect, I attended Charlene Li’s webinar in relation to her ‘calculating the cost of business blogging’ post (covered here, two posts down). Powerpoint slides and an MP3 of the presentation ought to follow shortly — I’ll update when they are. […]