Social Media ROI: Stop Worrying, Start Interacting
ADOTAS – It’s no secret that privacy is one of the most critical issues facing social media. It’s also well-known that social media juggernaut Facebook — after coming under pressure for lax privacy policies — responded by making it easier to keep personal information from being shared. Of course, the pressure could only have been enormous: According to Nielsen’s Q3 2011 social media report, over 80 percent of Americans now use a social network. In any case, the result has been a “safer,” more anonymous social media environment, which seems to have put users at ease… for now.
Less often discussed are the very serious implications this anonymity has for marketers. Nearly two out of three companies describe the extent of their social media activity as either heavy (21 percent) or average (43 percent), representing a 21 percent increase from 2010, according to a recent report from Econsultancy, LBi and bigmouthmedia. Obviously, social media is now in the “must-do” marketing media column for both B2C and B2B. And yet, we’re almost turning the corner into 2012, and there still isn’t a standard way to measure the financial and tangible benefits of using social media.
What is the ROI for social media, anyway?
Ask 10 people using it in their marketing plans, and you’ll probably get 10 different answers. Though marketing budgets are shifting more toward social media efforts (according to a survey completed this summer by Booz & Company and Buddy Media of managers from Fortune 100 companies about their investment in social media),* companies are still struggling to understand the impact of social media on their bottom line.
In fact, two features of social media make such analysis at best indirect, and at worst a waste of time. The first, as discussed above, is the anonymity. Restrictions on access to private information make it, in many cases, impossible to trace social media engagement back to concrete business impact. The second is that brand interactions and discussions happen away from business-owned digital properties. Combined, these two variables create a virtual barrier to the kind of metrics digital marketers have grown accustomed to using in their determination of ROI.
Since there typically is not a direct correlation to the point of revenue, getting too granular on ROI measurement can be distracting. At a certain point, you have to ask yourself, “What is the ROI of determining ROI?
Remembering our roots
So where does that leave us? Well, ironically, this dilemma shouldn’t feel too unfamiliar to marketers — though perhaps savvy digital teams might want to buy a round for some brick-and-mortar senior staff and pick up a tip or two — because it’s not too far from what they faced when the most advanced media around was print and television. Traditional marketing has always involved a measure of trust. Awareness has been a huge part of marketing magic: We put your message out there, try to influence public perception through solid, memorable brand initiatives, and hope that it touches a nerve, that the best message wins.
The time has come to embrace this leap of faith in the social media sphere. In many ways, after all, it actually keeps us honest. Again, people have the power — where once they could turn the channel, now they do their own research. They discuss, investigate, and make decisions about your brand on their own turf, and in many cases, the best we can do is obey the “content is king” paradigm, give them high-quality information about (hopefully) high-quality products, and, well, hope that it touches a nerve.
Awareness and engagement
But, of course, social media does give us a leg up on our marketing precursors. While we can’t use traditional analytics to rationalize social media efforts into dollars-and-cents conversions, there is undeniable value in engaging with consumers in these forums.
Social media is the first immediate feedback loop that we have with our target consumers as a group. Fortunately, many elements of it are highly measurable, thanks to the digital nature of the medium and the early development of robust tools. One popular way to measure social media interactions is to gather data that shows brand awareness and engagement. As a baseline, my company, the Garrigan Lyman Group, recommends our clients start listening and measuring a few basic things:
• Site traffic
•Search volume and terms
• Number of likes, fans, or followers
• Number of conversions
• Number of contributors
• Number of mentions and positive comments
• Number of page views
• Number of shares by your fans
• Number of retweets
These are metrics that can tell you how you are doing as compared to your competitors. They can also be used to determine what impact your social media outreach has on the social web in general. Did our marketing efforts increase engagement with our brand? How were we received?
Stop worrying and start interacting
Over the last 10 years, we’ve learned a great deal about digital marketing — we’ve learned how to track impressions, maximize click-through and drive conversion. But it’s also spoiled us. And now, when encountering a new form of digital media, we’re so suspicious about our inability to measure its impact in the same way that it’s easy to overlook the basic and most important point: the only way you are going to actualize any benefit from social media — let alone get real-time feedback from your consumers about your brand or products — is to stop worrying and start interacting.
* The study found that social media will become a higher percentage of total digital marketing spend in the next three years, with 28 percent of respondents stating social media will increase to make up more than 20 percent of their digital marketing spend by 2014.
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