Social media ROI.
Almost a decade in into the social media age, and marketers are still trying to figure out if it makes sense to engage on social.
It’s not an unfair question to ask: The marketing landscape is complex, and marketing teams should focus their efforts on what works, eliminating any tactics that don’t add value to the business.
Marketers from companies of all sizes have tried their best to pin down the value of social. Looking at what they have to say about social media ROI, what can we learn about how social affects sales? Below are some quotes from the industry’s leading thinkers.
Maybe we shouldn’t measure it at all?
Some buy into the idea that marketing folks shouldn’t be questioning the ROI of social media to begin with:
“Everybody’s worried about ROI of Social Media. What about the hidden ROI of what happens in real life when you care about your customers? 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?” – Gary Vaynerchuk, Author & CEO of VaynerMedia (Source: garyvaynerchuk.com)
Don’t sweat social media ROI
Many marketers have no idea if social media gets people to buy their stuff—and they are okay with that.
“I don’t think social media marketing has an ROI problem–marketing, in general, has an ROI problem. For years, we marketers have struggled to prove our worth and that our efforts actually deliver bottom line impact. Today, with the advent of big data and (increasingly) the tools/technology to measure and use this data, marketing’s business impact is becoming demystified. ” – Maria Poveromo, Senior Director of AR, PR and Social Media at Adobe (Source: CMO.com)
“Can you tie your PR efforts directly to sales? Can you tie your customer service efforts directly to sales? No, but these aren’t held to the same standard, perhaps because they’re not the new kid on the block, perhaps because they’re not ‘digital.’ Marketers should define thoughtful metrics and measure the work they do in social, but not necessarily in terms of ROI.” – Adam Kleinberg, CEO at Traction (Source: CMO.com)
“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.” – Erich Marx, Director of Digital Marketing at Nissan (Source: Digiday.com)
“For us it doesn’t have to be an exact science. If people are talking about our brand in a favorable way, that’s good enough.” – Adam Broitman, VP of global digital marketing at Mastercard (Source: Digiday)
Measure what you can…
Putting hard numbers on the value of one tweet is difficult, but there are metrics marketing professionals can keep track of to gauge their success on social:
“What matters [in social media] is everything that happens after you post / tweet / participate! 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 (Source: kaushik.net)
“If you want to measure social media ROI, stop wasting your time doing software demos and attending webinars. Just figure out what you want to track, where you can track it, think about both current customers and new customers, and go do it.” – Jay Baer, President of Convince & Convert (Source: Convince & Convert)
Coca-Cola gets it
Ultimately, if you’re using social media as part of your marketing mix, it should be fully integrated into the strategy. It’s not something that should exist independent of your other efforts. I think Coca-Cola’s approach to measuring their marketing success is wise and profound:
“We didn’t see any statistically significant relationship between our buzz and our short-term sales…Is that the end of the story? I would say no. This is one study on a set of brands in a particular company within a certain segment of the consumer-packaged-goods industry. It is by no means a generalized result that applies to all industries. ” – Eric Schmidt, Senior Manager, Marketing Strategy & Insights at Coca-Cola (Source: AdAge)
“None of our plans are simply social, or TV, or mobile or experiential. On the contrary, it’s the combination of owned, earned, shared and paid media connections – with social playing a crucial role at the heart of our activations – that creates marketplace impact, consumer engagement, brand love and brand value.” – Wendy Clark, Senior VP, Integrated Marketing Communications and Capabilities at Coca-Cola (Source: coca-colacompany.com)
My take on social media ROI
ROI is a financial abbreviation that stands for “return on investment.” Unfortunately, consumers don’t buy an item after seeing one ad or seeing one PR hit or a single tweet. The path to purchase is more complex than that, and social is just part of that complicated mix. Therefore, putting an exact dollar amount for each tweet or each Facebook or LinkedIn post is unrealistic. Doing so is also expensive—if not impossible!
Instead of calculating social media ROI, we should be talking about social media marketing measurement. Tracking KPIs using UTM codes and social media analytics software helps gauge a brand’s success on social media. If you’d like to take it a step further, doing correlation analysis with sales is also a good idea.
It comes down to the goals you’ve established in the beginning. By having a specific goal with your social media efforts (“get 100 leads via Twitter by end of the week” VS “increase sales”), social media marketers will have a better shot at illustrating their success (or lack thereof) to their superiors.