4:33PM December 7 2011
Whether or not you think social media is a new form of PR, the lifelong question of ‘what is the Return On Investment?’ for businesses using social media is one that will always be present, as it always has been for PR.
First and foremost, it’s imperative to mention that in the traditional sense, ROI is about sales. However, ROI can come in different forms these days, and for me there has been the odd occasion (or two) where there’s the need to demonstrate how social media (like PR) is a different kettle of fish compared to other forms of marketing.
With social media, we are looking at a slower burn process and at what value can be attached to activity on social outposts, which in the long run could equate to sales. What we are also seeing is that more businesses are allocating resources to social media, so how do we determine the success of social media as a marketing tool?
Undoubtedly, the right campaign and the right message on the right platform will result in bottom line ‘sales’. Being able to determine that ‘X’ amount of sales are a direct result of your social media campaign though, is a grey area for the pessimists among us.
According to a recent survey, three quarters of Chief Marketing Officers will look to tie their social media to ROI measures, and a massive 96% surveyed are identifying social’s value by looking past the normal metrics of sales goals and web analytics. Additionally, more than three quarters of these businesses use social networking to meet business objectives, with 64% integrating it in to their marketing plans.
The good news for these marketers is that commerce on Facebook, or ‘F-Commerce’ is a clear-cut ROI-defining machine. It just needs a business that a) has a product that can be sold through Facebook, and, b) understands the benefit of this sales channel. Likewise, YouTube’s recently launched Merch Store allows music artists to sell their products directly through their channels. Both therefore have sales as a direct result of their social activity.
Further to the likes of F-Commerce or Merch Store, companies are finding intangible benefits to measure the contribution of social media to their marketing activities, such as site traffic, conversion, fan numbers, number of mentions, page views and number of posts. Interestingly, 72% of those asked also say social media helps close business opportunities.
Ultimately there is no standard measurement of ROI, it’s my belief that businesses have come to accept that ROI is not always about sales, but about presence and engagement with audience, people talking about and spreading the word about their brand. And because every business has different objectives, ROI will be different for each and every one. A business needs to consider what its objectives are before adding social media to the mix, such as; sales, brand awareness, customer engagement, or possibly complimenting another promotion.
While the examples given are exactly that; examples of measuring return on investment of social media, it’s still very important to reiterate that apart from offerings such as F-Commerce, it’s still very difficult to directly track sales from your social media activity. If there is one message you would want to communicate to a business contemplating social activity, it’s that the emphasis must be on the value social media brings a business as part of the marketing mix and the benefits it carries for the brand.