ROI ROI ROI and Social Media; We Need to Have This Discussion Again
Let’s get a couple of the ground rules straight.
- Businesses are run primarily for profit.
- Social Media is not a magic carpet ride into profit or "return" in the case of ROI.
- Marketing’s primary aim is to drive demand and increase sales, and Social Media is but one tool in the marketer’s toolbox.
- The "media" in Social Media is about marketing. You can call it "conversation" if you like, but if it doesn’t result in business, it’s just a lot of talk.
- The only "branding" going on in social media are for the big BRANDS like TARGET, McDONALD’S, and STARBUCKS. You can call your localized social campaigns "brand building" if you like, but it’s about sales.
In writing about the ROI of social media a ton of people get these fundamentals wrong.
Social media is not about cutting costs or saving money. That’s called online support not social media. Even if the contact was made via facebook or twitter, the "media" is not involved. Yes, social networks, and social networking, and social (meaning talk) computing can reduce costs. But let’s not confuse that with social MEDIA.
So what is it, then, if it’s not service and support?
The MEDIA part is about content. Can you provide engaging content: 1. for your potential customers, and 2. for Google’s search patterns.
The other FACT that is hard to remember, and easy to forget when we are making all these "social" plans: It’s 85% Facebook. Plain and simple. YOU as a business HAVE TO DO FACEBOOK. The other 15% can be in things like Twitter and Yelp and other networks.
And the hardest part about Facebook is this: very few businesses are making ANY MONEY on Facebook. Sure, point to all the case studies you like, but f-Commerce is mostly myth. Even the largest retailers are starting to pull back their advertising dollars. And here’s why: people are not on Facebook to learn about your business or services. And an average click-thru rate on a well-performing Facebook ad is about 0.03%. Hard to make a case for those numbers. And if less than 10% of those clicks actually convert (and that’s a HIGH number) you are really going to be pressed to drive some big numbers to drive any significant revenue from Facebook. Sorry, but that’s the story.
Okay, now you’ve got the playing field straight. So what’s the plan? How do you go about writing a strategy for that?
Small and medium businesses are going to struggle with social media. Dabbling in facebook and twitter are very unlikely to show you any results at all. But there is R to be made in engaging wisely in social media. Some of it will be content generation. Some of it will be showing up where your customer is and having "conversations" with them. And a good portion of it will be in defining your actual R goals and staying focused on how to move those metrics.
As social is merely one of the online marketing tools, it’s also a very important one. I like to call it an accelerant. Add social features and functions to all of your marketing efforts, and the reach and influence of those ads can be exponentially enhanced. The R is not always a straight line calculation. In fact, the calculation of R on social media maybe an upcoming mathematical/statistical field.
So even though Facebook is king, there are other niche networks and apps you could have a huge impact on if you knew where to focus your social dollars.
The Bottom Line: A social media strategist can help you set goals and maintain a focus on your social media Return. Without the analytics and optimization of your social programs in place, you may be tossing your money after Facebook’s 0.03% rather than finding and concentrating on the most effective social platform for your business.
As I told a client, recently, "It’s all about focus. I’m going to be able to bring you ideas on a regular basis that you simply won’t have the time to think up. That’s my job."
If I missed something, please let me know.
An earlier take: The ROI of Social Media – It’s Easy, Right? (return on investment)
@jmacofearth (also seen on Google+: jmacofearth)
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See all of the Social Media Marketing Videos on the Social U. page.
58 Responses to ROI ROI ROI and Social Media; We Need to Have This Discussion Again
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02/28/2012 at 3:20 pm
Thanks for your comment Jennifer. You are correct. You have to have a Facebook strategy, but it is more about engagement. The R comes from the other social networks.
02/28/2012 at 12:38 pm
Can you clarify these two seemingly conflicting statements?
"YOU as a business HAVE TO DO FACEBOOK. The other 15% can be in things like Twitter and Yelp and other networks."
"…people are not on Facebook to learn about your business or services.
And an average click-thru rate on a well-performing Facebook ad is about
0.03%. Hard to make a case for those numbers. And if less than 10% of
those clicks actually convert (and that’s a HIGH number) you are really
going to be pressed to drive some big numbers to drive any significant
revenue from Facebook."
Am I deducing correctly that what you are saying is that you have to have engaging content on your Facebook page for those that may be a fan or so that you can boost your SEO, but that trying to monetize Facebook isn’t really a worthwhile exercise if you aren’t TARGET, McDONALD’S, and STARBUCKS?
I learn a lot from your posts, thanks for them.