SOCIAL MEDIA
SECTION ONE
SECTION TWO
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SECTION THREE
Ask the Right Questions about Social Media ROI
Retail and CPG marketers are scratching their heads about assessing
social media. The main reasons are that it comes in so many forms and
we know so little about them. For example:
It can be an ad network. Facebook is now the #1 display ad network.
It delivers 31% of all impressions, according to measurement by
comScore. Nearly 1.11 trillion display ads were delivered to U.S. Internet users during the first quarter of 2011. Facebook accounted for 346 billion impressions, nearly double the number it delivered in Q1 2010, and accounting for nearly one third of all display ad impressions delivered.
It can be a PR vehicle. The number of PR firms receiving more than 15% of their revenues from social media activities is up more than 50%. A joint study from the Transworld Advertising Agency Network and Worldcom Public Relations Group found that 28% of PR agencies reported that 15% to 33% of revenues came from social media in 2010. That number has jumped to 44% in 2011.
It can be a customer support channel. Many of the Fortune 100 use Twitter for customer support, according to Burson-Marsteller. The study found that 54% were using Twitter to reach out directly to stakeholders, while 32% were using a blogs and 29% were actively using a Facebook Fan Page to engage.
It can be a market research source. Over 75% of respondents to a survey by Valued Opinions said they use social media to share thoughts on a product or service.
Unless you’re into philosophy, asking about the ROI of social media is the wrong question. Asking “What’s the ROI of print?” is like asking “What do cars sell for nowadays?” A given medium can deliver brilliant results or lackluster results depending on the execution. The most actionable questions go right to the program or campaign level. But because campaigns vary, there are 100 different ways to measure social media.
Here’s a synopsis for those of us who don’t have the time to read the whole list:
- Monitoring buzz content (quality, quantity)
- Increasing social engagement (friends, comments, virality)
- Improving customer support (cost, speed)
- Extending other marketing (TV, search rankings)
- Driving revenue (visits, leads, purchases, LTV)
Social media has plenty of measures, not all of them revenue. Monitoring buzz tells us how top of mind we are and the prevailing view of our brand. Counting friends or “likes” tells us the reach of our social dialogue and how we compare to our peers. Measuring our follow-up to customer postings tell us how responsive we are. Assessing visits to our Facebook page during a prime time “buy” indicates effectiveness of TV advertising.
Armed with this thinking, we can answer more productive questions like, “Did Campaign A achieve our goals? Did it work better than Campaign B?”
Because the medium is so new, we invest more time than we should in existential areas like “What’s the ROI of social media?” That’s important for resource discussions such as the number of marketing staff allocated to monitoring, blogging, and tweeting, but it’s not useful in helping marketers assemble their marketing plans.
The novelty of the medium also means that we lack the experience to make gut decisions about programs based on past performance. We simply haven’t seen enough results to render an opinion.
It’s in these cases - diverse applications, minimal experience, and low (current) costs - where it’s most critical to focus our questions on the campaign level. First, we need to decide what comprises the “R” in campaign ROI, and then we need to measure it.
This article is based almost entirely on a recent blog by Dan Frechtling, vice president of marketing at DS-IQ.