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1/26/2007
05:49 PM
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Corporate Blogging Pays For GM

Forrester analysts recommend that companies similarly measure the return on investment that blogging brings.

General Motors' auto business hasn't been great of late, but its blogging strategy is paying off handsomely.

In 2006, the company's FastLane blog delivered an estimated $410,470 worth of customer insight and marketing at an approximate cost of $255,675 -- a return on investment of 67% -- according to a newly released report from Forrester Research.

Compare that to 2005, when GM's blog generated an estimated $578,374 worth of information and publicity at an approximate cost of $291,196. That's a 99% return on investment.

Forrester analysts Charlene Li and Chloe Stromberg chose GM as the subject of their case study to demonstrate that companies can and should measure the ROI of blogging.

"As blogging becomes more visible -- and expensive in terms of both time and money -- supporting blogging with informal budgets and borrowed resources just won't cut it," their report says. "Instead, marketers need to understand how and why blogging will affect their particular businesses, and calculating the ROI of blogging is the process by which marketers can obtain this understanding."

Li and Stromberg concede that it's difficult to calculate the ROI of blogging accurately, noting that indirect benefits can be hard to measure. "How do you assign a dollar value to the ideas sparked by a Web dialogue between an executive and a company's customers?" they ask.

And when you do assign a dollar value, as Forrester did in the case of GM, it's difficult to be sure the value is fair. Take the imputed value of the FastLane blog, which is based largely on the assumption that press coverage of the blog is worth what it would cost to buy an ad in the publication where the article appeared. That may be an inflated estimate if, as research firms such as Outsell have suggested, print ads are overvalued compared to online ads today.

Moreover, given that Forrester's estimate of GM's 2007 blog ROI will drop to 39% in 2007 -- mainly the result of diminishing novelty and press interest -- there's an argument to be made that companies should leave blogging to those employees who do it out of passion and off the books, rather than spending hundreds of thousands of dollars on enterprise blogging tools.

But for companies committed to blogging, it may be comforting to know that ROI is a real possibility rather than a pipe dream.

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