ROI in Social media marketing
of my presentation at "Next generation social media strategy"
panel, Ad:tech online marketing conference together with Peter Applebaum
the ROI of social media marketing is just as simple as with any
ordinary marketing campaign, you just need to have clear objectives
and well-defined targets.
Can ROI be measured in social media marketing?
of the most asked questions about social media is "how do I measure
the ROI of my campaigns?" Some marketers who are not able to
answer this question invent new metrics like ROE (return on engagement),
but this only results in not being able to tell if you did increase
your sales or not. The answer to the question is actually very simple,
although it might be hard to see the first time around. Like with
all marketing campaigns you need to write a sound plan; define clear
objectives and with those objectives set unambiguous targets. If you
have clear objectives, the targets and thus the ability to measure
the ROI will follow straightforward.
The inherent conflict of Social media ROI
What a lot of people do not understand immediately, is that social
media is about communication between people and thus a social action,
while ROI is pure financial. As you cannot compare apples to pears,
it is not possible to determine a financial ROI from a social engagement.
In the long term you will be able to detect a correlation between
your social media marketing and your sales, thus establishing a likely
ROI, but in general the management of a company needs to see an immediate
ROI to approve certain campaigns, so you will need to be able to determine
the ROI on the short term as well.
Social media is different
Social media marketing is of course completely different from how
we have been marketing brands the last decades. The customer is in
full control now and marketers can no longer determine what they talk
about. Marketers will have to listen to their customers and react
to what they are talking about. Marketers can no longer push their
brands, but have to build emotional bonds with the consumer and thus
create loyal customers. Branding is still part of the game, but secondary
to delivering a good (online) service to the customer.
to start with Social media marketing?
What marketers have to realize is that you cannot just do a social
media campaign. That is how social media has changed business as well.
Social media marketing is an ongoing business and not only for marketing.
The whole company will have to go social or not and not just the marketing
department. A lot of the other departments will be involved as well,
like legal, PR and customer services. And thus when a company starts
with social media it should best be done in small steps. The waters
need to be tested and the amount of resources needed have to be evaluated.
Who is going to monitor online activities and comments? Who will answer
those? What happens if a comment is negative? How are crises in social
media handled? By implementing social media marketing in steps you
will be able to handle resource problems and online crises effectively.
You will also be able to use the feedback from each step to improve
both your online engagement with your customer, your brand and your
services. Social media is the perfect medium for feedback, as every
engagement with a consumer will create more feedback.
I decide the metrics for Social media marketing?
When looking at social interactions, do not make the mistakes to go
for followers, fans or likes. What is a thousand "likes"
on Facebook really worth? How many of the people that "just"
clicked the like button are interested in your brand and how many
just liked that one statement you made, or a discount you gave? And
even if they really "like" your brand, does that mean they
will buy it? To click the like button does not take any commitment
or even serious thought. Therefore, measure actions that take an investment
from your customer; measure actions that take time and thought, like
comments and re-tweets, where people write positively about your brand.
These are customers that might become loyal followers of your brand
and even brand advocates over time and these are the people you need
to invest in.
And these metrics will enable you to determine your ROI. It might
be difficult to envision with your first encounter with social media
marketing, but by setting clear objectives and targets, you will be
able to link those social interactions directly to your targets. This
will be different for each project, but as soon as you have written
your plan and described the strategies and channels to reach your
objectives, you will see that the link to measuring that ROI will
follow almost automatically.