The ‘ROI’ Case for Web 2.0: Return on Information

Written by Matthew Fraser

9/18/2009

As social media tools are increasingly embraced inside corporations, the vaunted Enterprise 2.0 model is gaining momentum. Yet, if senior executives remain nervous about the downside risk of Web 2.0, their fears are frequently stoked by valid arguments: security breaches, confidentiality issues, legal liabilities, even simple “time wasting” on social networks like Facebook. These concerns, even if alarmist (and sometimes motivated by the prospect of security software sales), cannot be casually dismissed.

The best counter-argument to alleviate these anxieties is the famous “ROI” case. If Web 2.0 tools can enhance value and produce measurable results, what intelligent CEO would not champion them?

True, there are some exceptional cases where specific Web 2.0 campaigns — usually in marketing — have boosted sales. Dell Inc. (Nasdaq: DELL), for example, sold more products thanks to a Twitter marketing campaign. For most Web 2.0 strategies, however, the metrics remain vexingly soft. It’s difficult to put a hard measure on how wikis, social networks, RSS feeds, blogs, and other Web 2.0 tools add to the bottom line.

Web 2.0 evangelists argue that “ROI” is the wrong issue. Who called for hard ROI proof when the telephone and email first appeared as office tools?