I thought it would be helpful to talk about what we hear from customers on a day to day basis when it comes to social media ROI — marketers are aware of the impact that social media marketing can have on their overall program, but are wary of it because they have trouble quantifying and therefore justifying and the spend.
Here at Terametric, we have been successful helping our clients understand that with this new way of marketing comes new methods of measurement. Given that the end goal of social media participation is to grow the business, measurement is closely tied to the overall goals of participation.
The overall perception of marketing professionals is that social media marketing can help them get an edge on their competitors. However, just a very small percentage of their total online marketing spend is allocated to it due in large part to the perception that it can’t accurately product an ROI.
I thought it would be helpful to talk about what we hear from customers on a day to day basis when it comes to social media ROI — marketers are aware of the impact that social media marketing can have on their overall program, but are wary of it because they have trouble quantifying and therefore justifying and the spend.
Here at Terametric, we have been successful helping our clients understand that with this new way of marketing comes new methods of measurement. Given that the end goal of social media participation is to grow the business, measurement is closely tied to the overall goals of participation.
The overall perception of marketing professionals is that social media marketing can help them get an edge on their competitors. However, just a very small percentage of their total online marketing spend is allocated to it due in large part to the perception that it can’t accurately product an ROI.
Lets put it to rest…your customers are using social media and your should be joining the conversation
In February 18, 2009, Michael Greene of Forrester Research, published “Justifying Social Marketing Spending” and described his findings as such:
“With economic turbulence causing executives to tighten marketing budgets, interactive marketing professionals have to go the extra mile to justify their investments. While only 31% of social marketers plan to increase their social marketing budgets by more than 10% in 2009, social media should be part of all marketers’ plans, particularly tactics that are free or require more time than budget. Social marketers should concentrate on using the inexpensive and free tools that energize their active and influential customers and create a personal engaging experience in an unsettling market, resulting in success toward the back of the traditional marketing funnel.”
Yes, ROI matters but don’t let that stop you
Still, overall, marketing managers are late in adopting social networks marketing strategies even though they have become a main attraction to users and can begin to explore these areas without a budget. Social networking marketing initiatives can be relative inexpensive (company blog, pod casts, joining existing social networks) and in the current market conditions, marketing managers should explore these opportunities which require time more than budget.
Marketers should start to explore the influence of different campaigns including a Twitter presence, Facebook fans page, and/or official blog but only if they have the conversational skills, dedication, and a willingness to explore new ways to communicate with customers and stakeholders.
You must define your goals for participation before finding the right metric
At the end of the day, if your objectives are not clearly defined and you don’t know what you’re trying to achieve, you can’t develop the metrics to support it. The metrics for measuring word-of-mouth effectiveness, for example, are going to be very different than the metrics for brand loyalty.
Traffic is still relevant
By itself, traffic says very little. You have to look at overall trends to understand your overall visitor growth. Volume of referral traffic from social networking sites is one metric that can be tied to social media, repeat visitor growth is also another. Fundamentally, a visitor who comes often and participates in your community is an evangelist and ranks high in your social capital. If your blogs relevancy can also be measured by the average number of comments, PageRank, etc.
Business size and product/service offering affects measurement
Measuring ROI for small businesses is easier because the marketing mix isn’t that complex and the customer touch points are easier to track whereas a big company requires a fairly complex modeling because there are many more possible drivers of revenue.
Towards that end, metrics for the small business are typically measured with little analysis beyond traditional metrics and larger companies will spend more time pouring over engagement metrics and developing detailed analysis to determine influence.
We are firmly in the camp of using ROI to make the case for social media budgetary allocations. But the approach reflects the overall marketing goals and organizational makeup.
What does your social media dashboard look like? What are your social media goals and what are the metrics that you track most closely to determine your success?
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