Business owners usually ask what is the ROI of Social Media? When will I get return on my investment? How many likes will I get?
How do you respond to it?
There is no such special tool by which you can measure the return on investment of facebook or any other social sites , as it is mainly for creating the brand awareness to people and by maintaining social relationship with them which heps in viral marketing..
Excellent response! However, you can check the effectiveness of your social pages through Google Analytics to find out where your visitors originate. But, again, you are correct. Social media isn't about ROI, it's about viral marketing -- making contacts that build a network of strong supporters.
The ROI is very less hence most major advertisers have quit social media completely. But i do agree with the above statement that it helps in creating brand awareness and keeping in touch with your customers.
Excellent responses! So to sum up:
- Social media helps in brand awareness.
- Social media builds community and it is a time gaining exercise.
-- Next time someone asks about the ROI, this is what I will tell them:
a. What is the ROI of your secretary? He or She does the talking only
I believe when brands do not participate online, they are losing their time and money.
The ROI is less as compared to what? And measured how? A claim without details is just a hypothesis.
The secretary / roi of something taken for granted argument is common and all things said, not half bad, but it presupposes that social is unmeasurable like an employee. While nailing down any ROI from social can be hard, and the full, bottom line impact is simply impossible, you can quantity parts just as you can quantify the minimum value of an employee. Thus rather than comparing two abstracts I'd rather look at social from another side: the opportunity.
First we have to define what we're trying to measure. At it's root "social" is merely a word that, while often attached to specific channels & tactics like being on facebook, describes a much larger phenomena, a shift in the way the world works. In the past the company controlled the message, the offer, the amount of information. But the internet gave people access to all information and then social interactions took that a step forward and gave them a voice to add to it. It's power unlike anything before it.
This gets us to the result: We've got a world in which people use "social" for everything. Literally. There's studies showing the impact of reviews on buying household goods that cost a few dollars. There's entire products built around viral spread. And there's ever growing expectations for response time and interaction on social named channels. The first ROI mistake is in assuming social is a marketing tactic and thus about incremental spend for incremental return. Engaging is just as much about keeping what you have going just as much as adding too it.
You can ignore it, you can dismiss it but whether you participate or not the conversation is happening and will be about you in whatever form you want. To quote a source I can't recall [think it was @unmarketing]: when the phone rings you answer it, when an email comes, you reply, why should a tweet by any different?
Finally we get to the evaluation part. No doubt social is simply essential but how much do you put into it, and with what expectation?
When I sit down with a business and they ask me what they will get for investing in social, my response usually starts with a question back: What would you pay to be able to reach your customers such that they could respond back to you? What would you pay to shift your support off the phone? What would you pay to have people sell your business for you without having to pay them?
You have to walk in with the right understanding of what "social" means and why it matters before you can measure it. That's because what you measure is limited by precisely what you are trying to do... in fact the better you are at social, the harder it is to find ROI, or even to see social stats. You can, and should, count the direct contributions, the interactions / followers [social stats], the business correlations [clicks, calls, leads] and the hard numbers [known sales]. Then you have to look at the savings in support, R&D and launches as well as the lift [often back to baseline] of validation, of having something authentic.
What you're left with isn't one number but rather a piece work of social stats and dollars which -- if you've done your job right -- are seen as an indicator of the larger contribution. Something to know your direction, to take a pulse from, but by no means the absolute bottom line.
As compared to what advertisers get from advertising on Google/Bing/Yahoo. It is a fact that ROI is far less as compared to Adwords. People search Google to find goods where as on social network people just hang around for fun and ads are being shown to them.
I guess I'd like to see the proof of that. Promotion is promotion and I believe a business is much more visible when using Facebook advertising than Adwords, unless of course the browser is installed with an ad blocking extension. I rarely click on an adwords ad and generally only those that are at the top of the search results. However, I have clicked on Facebook ads: sometimes to go to the advertisers FB page and sometimes to see more about their company on their website.
On one hand you're explaining that you have apples and oranges and then you're comparing them as if they're suppose to taste the same. It doesn't work that way in marketing any more than it does in fruit.
Search is a direct response channel... I come looking for something, thus I have a need to act on what I find in short order. But what if I'm not looking? Is your business going to be based solely on people who are already in the market? If so you'll face two very significant challenges: competitive differentiation and finding enough customers [in the long term].
This is evident with far more than just social. TV advertising, print, radio, even display ads on the web have all changed as DR has grown [search being just one part of the DR market] yet they remain the overwhelming centers of spending. Why? You can claim legacy to a degree but when Old Spice went out to reposition their brand they didn't stop at buying up ads on "deodorant" searches... in fact I bet they hardly notice a contribution from that at all. But they did go to great lengths to share a message and get consumers out validating it to each other. That's because people don't decide on the fly... in fact one of the biggest challenge I see in search [paid or organic] is unknowns trying to win.
They say it takes 10 impressions to get awareness... if your first one is a click request you're facing a big battle.
When it's all said and done I'd rather not treat social as marketing anyways. It's the wrong metrics and frankly the wrong mindset as it isolates you away from interacting and institutes the goal of pushing. You wouldn't call customer service marketing, but it drives repeat business. You wouldn't call employee education marketing, but it influences the decision to buy. Just because social touches the consumer does not mean it should be treated as an advertising medium.
The value of being able to communicate with customers, to building a relationship, bringing out advocacy, and being ready to jump on their questions & critique... that's what raises credibility and trust and that's what you have to measure.
It is not a matter of those apples or those oranges, it's how both work together.
If you compare the ROI strictly on measured clicks of both it's really not up for debate. People are looking, often ready to buy, on search where as they have no obligation or need to click on social. The mistake however is believing that your ROI is as obvious as what clicks you can track... that's thinking on your terms but customers operate on theirs.
Yes! I am also of the opinion that the ROI of social media ads is too low when compared to Adwords! Recently i read a post which claimed that about 80% of the clicks on Facebook ads are by the bots, so the efficiency is much more less to what we expect. But i strongly believe that Social media is one of the best platform to generate brand awareness when you are launching a new product.
Something to consider is social media can really be used to amplify and engage your brand. One of the ways we gauge our social media success rate is to simply look at the number of incoming tweets and retweets that we've had.
You can also use tools like bit.ly to track inbound clicks, which isn't that most important thing, but can provide an additional statistic.
Social media is used for advertisement of your content and information.You can promote your site through the social media and other people from all around the world can see it and know about your site.If you want to know the ROI than in my opinion check the all links of your site in the Google analytic official website.For that You have to just signin in the Google analytic site and you can see how many links are coming to your site through the social media.
There are tools that can be used to measure the ROI for social media. For instance, we are deploying HubSpot marketing automation to track how many visitors originate from each social media channels and then follow those visitors through the sales funnel, when they come to the site, what pages they viewed, what emails they received, opened, clicked through so that those contacts can become nurtured into qualified leads.
If you are a B2B business like us, then this approach can enable you to track ROI, but you have to track the cost side and be honest. How much you spend on content, how much you spend social media content syndication (LinkedIn status updates, facebook posts, tweets, etc.). Also, one could argue that you should include the infrastructure cost in the basis (for us, deploying/subscribing to HubSpot/creating offers/setting up landing pages/lead nurturing campaigns, etc.) If you track your costs and match those against closed clients by channel, you can measure social media ROI, down to the post level (not that you would) to see where that customer originated from. At some point, the waters could get muddy and you realize that you are really tracking the marketing automation ROI.
For B2C, in theory, this model could work also by tracking aggregate purchases by customer s who became followers/fans as a result of a campaign/post/tweet, but that would not tell the who story as each social media engagement of a business has the potential to provide a lift in sales from existing fan base, so that could be viewed as cream on top of the baseline. I would love to hear from others what approaches they use to track Social Media ROI in B2C.
For large brands promoted heavily across channels, there are also correlation/causation arguments that can be made about which channel is driving purchase behavior and in truth, it is the combination of the multichannel touch points over time that provides the lift in sales. Attribution for sales impact is not a perfect discipline, but with some simplifying assumptions, ROI can be measure and tracked and most importantly, communicated to senior management, who is frustrated by the inability to get ROI visibility from the social media investments they know they have to make.
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