Shel Israel's worst nightmare?

After debating the relevancy of PR measurement with Shel Israel for two decades, we engaged in a far more enjoyable conversation about the ROI of blogging last year at the New Comms Forum in Palo Alto where I essentially conceded his point.
Now Forrester's Charlene Li, another New Comms Forum speaker, has come out with a paper called the "ROI of blogging". We trust Shel's heart is in good shape because if not, this report will give him a coronary. Don't get me wrong, I have a huge amount of respect for Charlene, but the false assumptions and inaccuracies in this report are scary.
My favorite is in the section on calculating "costs"   that includes "startup: less than 1 hour per blogger for training" --  good luck to the company that turns an employee loose on the blogosphere with less than an hour of training.
Then there's the statement that the startup costs for a blog should be between $25,000 and $45,000 --   haven't these guys heard of Typepad?  They should talk to the guys at Intuit who got their blog started for $15.  I also love the fact that they say that monitoring your brand in the blogosphere should cost between $75,000 and $300,000 annually. Please don't tell that to most of my clients who are paying a fraction of that for our CGM Dashboard.
But the biggest problem I have with this report is the emphasis on measuring ROI  based on the cost to buy ad space in the "publication" in which your brand is mentioned. Talk about applying 20th century techniques to 21st century media. First of all, the vast majority of blogs are not necessarily advertising vehicles, and suggesting that Ad Value Equivalency applies in the blogosphere is absurd. Just when we get consensus among PR practitioners that this is a metric that is widely discredited, Forrester decides that its fine to use it in the blogosphere.  Secondly, the whole point of social media is to have a conversation not scream at an audience or blast their eyeballs with brand mentions. 

Comments

[Kami Huyse]

I noticed the AVE suggestion as well - eee gads! But you can replace that with something more palatable (cost of blog program versus marketing) and the idea of assigning value works. It needs some refinement for sure.

Overall, I think that the the three-step process is a good one, and I really like her idea for assigning risk, but I am going to spend some more time on that soon. My husband is a risk analysis engineer, so this stuff is the evening conversation in my household, ha-ha.

[Glenn O'Neil]

This has to be the wisest post I've read on the Forrester ROI Blog calculation! (ok along with the post of David Phillips of LeverWealth). Thank you for pointing out the main flaw - using the highly discredited AVE calculation to calculate blog ROI. Is that the best we can do for blog ROI? I hope not...

[Katie Paine]

Jeremiah, are those costs in labor or actualy hard costs? I know that for us, the typical CGM Monitoring and Analysis program is $20-$30k.

[Jeremiah Owyang]

Interesting KD. Some of these costs are actually correct. I know from first hand experience deploying a social media program at Hitachi Data Systems.