Wondering how to calculate the ROI of your blog? Charlene Li and Chole Stromberg of Forrester Research have just complete a new report, "The ROI of Blogging: The ‘Why’ And ‘How’ Of External Blogging Accountability." The report is for sale ($379), but a good summary of the its findings are available on Charlene’s blog (See also her initial post on this topic from last October).
The bottomline: "calculating the ROI is easier than it looks." It involves three steps: identify and measure the benefits, calculate the costs, and adjust for risk.
To demonstrate this methodology, the report includes a case study on GM’s Fastlane blog. It calculates an overall ROI based on benefits, costs and risk. For example:
- it measures the value of press coverage using "advertising equivalence" or how much it would cost for GM to buy an ad in the media property that reported on them
- it calculates the amount of employee time dedicated to the blog to come up with a cost number
- it uses various senarios to identify how risks (e.g. less press coverage over time vs. more press coverage over time) will adjust the final ROI figure
Charlene does note that this is an ongoing exercise and has a final word of caution:
"This process and framework is not cut and dry, black and white. Rather, it’s highly subjective, requires tremendous judgment, and is open to interpretation. But it is a starting point for an otherwise nebulous activity."
Even if your company or organization does not expect you to measure the value of your blog (or, doesn’t expect it yet), we strongly recommend taking the time to use this new methodolgy to list the benefits, costs and risks of your blogging efforts. You may be pleasantly surprised with what you learn.
- Kevin
