One of the questions I hear a lot is about social media ROI. It’s a fair question. Business owners want to know what their return will be for their investment.
Since social media rose to prominence, the question of return has always been a concern. In fact some argue that it is a weakness of social media marketing.
The difficulty of measuring the return on investment is not just a condition of social media, though. It is also a challenge for print and broadcast.
When you consider that all these forms struggle from one degree to another with measuring ROI, it seems like social media is being held to a different standard.
The ROI of Traditional Media
Traditional forms of media, print, TV and radio, are advertiser-driven models. They make money from selling advertising space or on-air time. Then, they are cast out to the public broadly.
Measuring the effectiveness of these media forms is extremely difficult. They are not targeted nor are they track-able. There are no electronic links or triggers that measure who has seen your ad or engaged with it.
Thus, establishing the ROI for traditional media requires some guesswork.
Social Media ROI
Social media is just the opposite. It can be targeted to a specific demographic. This is highly valuable. It allows you to tailor the message to that audience so it can resonate with them.
In addition, social media is highly track-able and measurable. Every interaction with a post or add can be measured and that data is easily available.
You can also track traffic from social sites to your website using Google Analytics. One strategy that could take advantage of the traffic might be to use a dedicated landing page with a unique phone number. Have social media direct traffic to that page and see how many phone calls you get. That number would be a direct result of the effectiveness of your social media efforts. Thus, a social media ROI can be established when a program is done right.
Should It be Measured?
Social media builds intangible qualities such as awareness, trust and likeability. These are things that every brand wants, but they are also not easily quantifiable. Because o that, some marketing leaders believe that trying to measure social media’s ROI doesn’t make sense.
For example, Gary Vaynerchuk, Author& CEO of VaynerMedia writes:
What’s the ROI of your mother? No really. Because I’m telling you right now, the ROI of my mom is everything. The only reason I’m standing here is because I was perfectly parented. My mom sniffed me out and executed against my skills, and schlepped my baseball cards at six in the morning to go to baseball card games. That’s caring. So when you ask me about the ROI of social media, I ask you, what’s the ROI of your mother?
Erich Marx, Director of Digital Marketing at Nissan, says, “We don’t think about the ROI of social; we think about the cost of ignoring it…I’m not dismissing ROI – because it’s always important — but we’re not about to cut back or dismiss social media because we can’t define it.”
“For us it doesn’t have to be an exact science,” comments Adam Broitman of Mastercard where he is the VP of global digital marketing. “If people are talking about our brand in a favorable way, that’s good enough.”
While others believe it is the impact of your social posts that really makes a difference:
Did you grab attention? Did you deliver delight? Did you cause people to want to share? Did you initiate a discussion? Did you cause people to take an action? Did your participation deliver economic value? The ‘so what? ‘ matters!” – Avinash Kaushik, Author and Digital Marketing Evangelist at Google.
While social media ROI might not be easily quantified, the same is true of print, radio or TV advertising.
When you put your logo on t-shirts and hats or sponsor a baseball team are you worried about the ROI? Typically not. Doing so gets your name in front of people so your brand will have top-of-mind awareness when it’s time to buy.
Social media has a similar role, but it also does so much more for your business. In addition to building awareness, it also can help establish your brand as an industry expert. It allows you to be targeted and the results are measurable. That data allows you to make adjustments and try again.
No other medium delivers as much value as social media does.
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Bob Turner is a Small Business Online Marketing Consultant with Social Flair in Cincinnati, Ohio.