Blogging's ROI becoming clearer

More than just a cool way to communicate, corporate blogging can actually save enterprises money, effort and time.

McDonald's Corp. does it to monitor the quality of its sprawling restaurant chain. Dell Inc. does it to address its customers' technical support issues. Southwest Airlines Co. does it to perpetuate its image as the fun and friendly carrier. And Benetton Group S.P.A. does it to take a stand on global and political issues.

All of these companies find value in blogging, the self-publishing phenomenon that has taken the Internet by storm. Now many corporations are asking important questions about the ROI of blogging.

At first blush, the investment doesn't look all that significant. Any user can start a blog in just a few minutes; commercial blogging services top out at about $15 a month and many services are free.

But the low startup costs mask the real expense: the time employees spend maintaining their online journals. The average blogger spends two to three hours per week on his or her craft, which adds up over time. But some companies, like Microsoft, are so convinced that blogging benefits their customer relationships that they permit thousands of employees to participate. However, most businesses aren't Microsoft.

The ROI issue has come to the fore as more businesses -- and larger ones -- have entered the blogosphere. "ROI is a bigger question now than it was a year ago," said Katie Paine, founder of KDPaine & Partners, a Durham, N.H.-based firm that focuses on public relations measurement. Several businesses, including TNS Media Intelligence/Cymfony, Nielsen Buzzmetrics and Biz360 Inc., have sprung up to offer services that measure companies' profiles in the blogosphere.

Pfizer Consumer Healthcare, a division of Pfizer Inc. before its acquisition by Johnson & Johnson Co. last year, used Cymfony's service to track customer comments about its consumer products on blogs and message boards. "The insights that came from reading discussion boards verified some of our thinking but also opened our eyes to possible market opportunities that we may not have seen," said Tom McMillian, director of relationship and interactive marketing.

The process was a refreshing new perspective, he added. "Focus groups are contrived, for the most part. This is unadulterated. This is what folks are saying," McMillian said.

Businesses that have strong customer loyalty or a unique image can leverage the enthusiasm of their customers with a log that reinforces the company's voice.
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There are some clear business benefits to blogging. For one thing, blogs perform exceptionally well on search engines, and can be a valuable tool to increase overall traffic. You can easily track traffic from your blog to your corporate Web site using standard referral logs. You can also use tracking codes in links from your corporate blog to identify which visitors click through to offers or order forms. In this way, it's possible to identify sales that arise directly from blog traffic.

Businesses also use blogs to raise their visibility in specific markets. Simple traffic metrics are a good indication of success, but look also at what others are saying about your blog to get an indication of the "buzz" you're generating. "Eyeballs are the wrong things to be counting," Paine said. "Look at comments, trackbacks and links. If you're getting a lot of those, then you're making a difference." It's also a good idea to monitor chatter about your competitors for comparison.

For small companies, blogging can show quick and measurable returns because they're so focused. Nancy Boy Inc., a San Francisco-based toiletries maker, grew its annual business from $100,000 to $4 million in five years, due in part to the success of its blog among shaving enthusiasts.

For large companies, the benefits are less tangible but nonetheless valuable. McDonald's innovative internal blogging application gives selected employees the capacity to blog about service and conditions at the company's restaurants. The public will never see these journals, but the experiment is a low-cost alternative to hiring teams of inspectors.

Some other useful but difficult-to-measure corporate applications of blogs include:

Market research: Blogs are a relatively inexpensive and fast medium to float ideas and gain significant amounts of feedback. A well-trafficked blog can generate hundreds of comments in just a few days, and inexpensive tools like Google Alerts and Technorati Favorites make it easy to monitor what bloggers are saying about your company and your competitors. Consider these costs in light of your spending on market research.

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Customer service: A blog can be a quick and easy alternative to building out a sophisticated customer support system, particularly in times of crisis. Dell learned that the hard way when it was the victim of a swarm of negative publicity over its customer support in 2005. Last summer, it launched a blog to inform customers about efforts to improve its support capabilities.

Take a message to the market: Mainstream media increasingly read blogs, making them a useful tool to converse with key influencers. But blogs can also be used to bypass the media. For example, consider General Motors Corp.'s recent spat with The New York Times. Frustrated in its efforts to publish a letter to the editor, it chose to make its case on its corporate Fastlane blog. The resulting publicity probably far exceeded any attention the company would have received with a published letter in the Times.

Reinforce an image: Businesses that have strong customer loyalty or a unique image can leverage the enthusiasm of their customers with a blog that reinforces the company's voice. Among the brands that are doing this are Guinness & Co., Southwest Airlines and Benetton. These shared blogs feature multiple contributors and can be an effective way to promote a company's brand without requiring a large commitment of time.

Many technology companies are hard at work inventing new ways to measure the ROI of blogging. The Institute for Public Relations' annual Summit on Measurement will be held in October in Portsmouth, N.H., with a significant part of the program devoted to measuring return on blogging, Paine said. The potential business upside of this new medium is too great not to address the ROI question.

Paul Gillin is an independent marketing consultant and founding editor-in-chief of TechTarget. His Web site is www.gillin.com.

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