Study: How Do Marketers Define Social Media ROI?
DM CONFIDENTIAL – Wildfire recently conducted a survey of more than 700 marketers from around the globe to gauge their thoughts on measuring the business impact of social media. One of the findings was that measuring social media ROI is most frequently defined as an increase in fans, “likes,” comments and interactions.
According to the survey, 97 percent of marketers believe social media marketing benefits their business, while 75 percent intend to boost their spending on the medium this year.
The survey also highlights the three phases brands go through in their social media campaigns: growing, engaging and monetizing their fan bases. “Currently, the market is focused on the first two phases while monetization has yet to be the focus,” Wildfire notes.
Another finding is that 88 percent of marketers point to growth of brand awareness as a benefit of social media activities, followed by 85 percent who point to engaging in dialogue, 58 percent who point to increased sales and partnerships, and 41 percent who point to reduced costs.
Ninety-four percent of respondents utilize Facebook, followed by 74 percent that use Twitter, 41 percent that use blogs or blogging communities, 32 percent that use LinkedIn, 30 percent that use YouTube and 6 percent that use other social media channels. Wildfire noted that this may change in 2012, thanks to Twitter’s branded pages, LinkedIn’s developer launch, Google+ and the growth of blogging networks like Tumblr and WordPress.
Meanwhile, 44 percent of respondents said new customer recruitment is the most valuable aspect of a Facebook fan, followed by 18 percent that cited higher conversion rates and 18 percent that cited more frequent purchases. Wildfire also noted that nearly 70 percent of marketers surveyed believe Facebook fans are worth more than non-fans.
According to the survey, 38 percent of responding marketers use increased fans, “likes,” comments and interactions as a measure for social media ROI, followed by 24 percent who use increased revenue, and 15 percent who use increased brand awareness.
Wildfire added that 100 percent of respondents that did not define ROI in the classical definition still thought social media benefits their business.
A separate report from Awareness Inc. found that 70 percent of responding U.S. marketers will invest more in increasing their presence across social media platforms in 2012, followed by 59 percent who will invest more in increasing the frequency of content publishing.
I hate to say it, but this precisely why marketers have so little credibility in the board room. ROI has a very specific financial meaning to the CEO, the CFO and the board. When marketers shift their own meaning of ROI to something that is not a specific measurement of financial gain, they confirm three things in the mind of everyone around the boardroom table: 1) Marketers lack a fundamental grounding in business principles, 2) Marketers are not on the same page with the rest of the company, and 3) Marketers are not serious about accountability.
I tend to agree with the above comment. Though these stats (fan increases, retweets, interactions, etc.) are helpful for measuring engagement, they are not monetary. Using unique coupon codes or incentives can often help measure just how much traffic your social media platforms are sending you… and how many sales or leads they are generating. The ultimate goal is generating sales and leads through the process of engagement. Though it’s still in its early stages, this needs to be the primary focus.
P.S. We’re an Internet marketing firm and we agree that accountability needs to be paramount.
I definitely agree that social media marketing can boost your business. What they don’t tell you is how time consuming it can be. As a business owner I really don’t have the time to be on the internet all day and that is what a good job requires. That is why I recommend outsourcing to a marketing company that is well established and knowledgeable. I found Magicbuz to be the best available SocioViral marketing company to promote your business to millions of people on an individual level and in a way that people can relate to.
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