Social media and the bottom line: Are “impressions” and followers good enough?
June 30, 2010 at 6:41 pm shodge 4 comments
By Sally Saville Hodge
“I love social media. I think it has great potential. But I can’t figure out how we can make money off it.”
With those words our client gave voice to the $64,000 question that gets debated with increasing frequency in communications circles. How do you measure social media ROI? It ranks right up there with PR (did someone mention “ad value equivalency”?) as an issue that has no truly satisfactory solutions.
Many clients, including some of ours, want to see a direct correlation between social media initiatives and cash registers ringing (or the equivalent thereof). The reality, of course, is that marketing or PR, whoever owns social media in your organization, typically doesn’t have control over many of the factors that will close the sale.
In other words, we can heighten awareness through social media strategies. We can get you friends and followers by designing engaging initiatives. We can drive traffic to your site through smartly conceived e-newletters and e-marketing initiatives or press releases distributed over wire or well-placed articles in the traditional or digital media.
But we can’t close the sale, and if you’re not able to deliver operationally, then it’s all for naught.
Blogger Steve Goldner made these points in a post last year, and like others opining on the topic of social media ROI, has suggested some parameters to help you weigh whether your efforts are paying off. Among them: number of friends and followers, the amount of discussions being generated (including written, video and photo comments), number of retweets and number of downloads.
All are well and good, but I suspect such measures are likely to leave the financial guys less than impressed.
The reality is that setting up a systematic process to get at ROI – whether it’s for social media, PR or marketing – is hard work. Take a look at this great slideshow that lays out, in a very amusing way, what it takes to get at meaningful measures that tell you over time just how successful your social media initiatives are.
Bigger businesses may be willing, and they have the wherewithal, to make that kind of investment. Smaller businesses, however, don’t typically have the internal resources to do it themselves. And they’d rather pay us to develop the ideas and help execute. Not to measure.
It’s a conundrum, all right. The solution may lie in a combination of efforts, particularly among smaller businesses: Demonstrating growth in awareness (e.g. increased friends/followers, etc.) and using website analytics to track growth in visitors, downloads and other key measures.
It may not directly address the “show me the money” question, but is more substantive than the “you’ll know success when you see it” gauge that we’ve seen too many businesses settle for.
Entry filed under: Account Management, Agency Management, Integrated Marketing, Marketing Communications, Marketing Strategy, Metrics, New/Social Media, Public Relations. Tags: differentiated marketing, Metrics, Public Relations, Social Marketing, Social Media.
1.
SocialSteve | June 30, 2010 at 7:09 pm
Social media is a marketing tool (among other things). Marketing generates awareness and increases lead generation. It does not close a sale. Thus social media does not close a sale. While this may make the financial people unhappy, it is an important PART of the sales cycle. I cover this in the article “Social Media Conversion and the Social Media Marketing Funnel” at http://bit.ly/dsPrq
Best,
)
Social Steve (aka Steve Goldner
2.
Sally Hodge | June 30, 2010 at 7:22 pm
Indeed. The challenge will always be educating non-marketers and making sure we hammer away at setting expectations.
Cheers,
Sally
3.
ecairn | July 1, 2010 at 3:44 pm
In general, based on my experience in manufacturing, engineering and marketing, we can measure ‘simple things’ that can be described in ‘process’ – Behind process there’s the idea of some kind of control and reporting from the different parties involved in it. Well that’s where it’s hard with social media because 1) it’s a lot about communication/relationship – hard to put a value (r) on this 2) a brand doesn’t have much control over the network that is social media. Influence at level1 is probably all they can get. But as people relay the story/work about you, you’re out of the picture and it may/may not happen like seeds grow/don’t grow and it involves water/sun/soil in a very complex and time dependent equiation that we’re far from understanding.
There are things that can be measured though and it’s important to think though what can’t/can be measured and do it for the ‘can be’ part. For example a blogger outreach campaign can be measured, not in term of sales generated ;-( but in term of earned media.
4.
Ryan Evans | July 9, 2010 at 4:25 pm
Nice post Sally. Being a former financial guy myself, I can tell you that there is a reason that they are good at their jobs. They like numbers. They don’t want to hear any crap about friends, followers and discussions. Those kind of things make their head heart and stomach turn.
They want to talk about revenue growth, gross margins, ROI etc. The problem is that most PR and marketing efforts don’t fit nicely into a financial forecast. There are a few reasons for this. The timeline is unpredictable, the likelihood of a particular effort generating revenue is unpredictable and the attribution of that effort is often hard or expensive to track. But that doesn’t mean that these efforts aren’t worth doing. A spreadsheet will never show you what makes a firm truly valuable.
Ryan Evans
@ryanevans