Posts Tagged measure social media ROI
Study Shows Time Pays With Social Media Marketing with RoryMartin.com
Posted by Rory Martin in Social Media Marketing, Social Networking on May 21, 2010
Have you asked this question: Is the time I invest with social media really worth it? Whether you’re new or an old hat with social media, chances are you’ve wondered if the time commitment is really worth the return on investment (ROI).
Make no mistake about it: a true investment of time and resources is necessary to see significant social media marketing success.
But the real question is, “Just HOW MUCH time is needed to see solid success?”
This question was recently answered in the new study, 2010 Social Media Marketing Industry Report, authored by Michael Stelzner. Based on the report findings, ROI is top of mind for most marketers using social media.
Top Social Media Questions Marketers Want Answered
According to the data, the number-one question marketers most want answered is how to track social media ROI. A sampling of questions includes:
- How can I tell a convincing story to management about the ROI for social media marketing?
- What are the key metrics to follow for measuring ROI in terms of customer satisfaction, revenues and brand loyalty?
- How effective is social media versus the resources needed to maintain the effort?
- Are there any industry benchmarks that track the impact of social media marketing?
In the 2009 study, the number-one question from marketers was related to social media tactics, followed by ROI. Now tactics have moved down considerably and the ROI question has moved up. One reason for this could be that social media is maturing and more people have started using the tools and tactics. Now they want to know if the long-term payoff for their time and resources is really there.
Time Versus Return for Social Media Marketing
When looking at ROI, you also have to look closely at just how much time you’re investing. Unlike some other traditional forms of marketing, when it comes to social media, your investment is more time than money.
The industry report results shed some light on the amount of time marketers are really spending on social media marketing.
Out of the 1900 marketers’ responses, almost all were using social media for marketing purposes and the majority of these marketers were fairly new in the social media area.
- 91% of respondents indicated they were employing social media for marketing purposes.
- 65% of marketers have either just started or have been using social media for only a few months.
When drilling down to the actual hours spent using social media tools, the largest group was in the 1 to 5 hours per week range. Of that group, 43% are spending 4 to 5 hours each week on social media activities. A significant 56% of marketers are using social media for 6 hours or more each week and 30% for 11 or more hours weekly. It’s interesting to note that 12.5% of marketers spend more than 20 hours each week on social media.
This chart shows the overall breakdown of marketers’ time spent using social sites.
But even more interesting than the time spent on social media marketing, the report also showed a correlation between the amount of user experience and the time spent using social media tools. The median weekly time commitment for beginners was 1 hour versus 10 hours for those doing this for a few months or longer. Because 65% of respondents indicated they were newbies or just a few months in, much of their time spent on social sites could be more trial and error than solid strategy. Perhaps the difference in time spent using social tools is because the marketers who have the most experience also have more well-defined social media strategies, allowing them a clear plan of action on the social sites.
Just like with anything else, experience is golden. The more user experience one has with social media marketing, the more valuable every minute spent on social media sites becomes. The time spent on social sites is not as important as the actual results. What we really should be looking at is what kind of results are you getting for that 1 hour, 4 hours, even 12 hours per week?
Top Benefits of Social Media
When the respondents were asked about the benefits they’ve received from social media marketing, there were some clear winners that stood out above the rest. When looking at ROI on social media marketing, money in the bank can’t be your only indicator of success. Increased traffic, lead generation and happy, connected customers all are factors in deciding which social media strategies are working best for your business.
According to the survey, the number-one benefit of social media marketing is greater exposure (85%). Improving traffic and building new partnerships followed next. More than half of marketers indicated a rise in search engine rankings was a benefit of social media marketing. The report states, “As search engine rankings improve, so will business exposure, lead generation efforts and a reduction in overall marketing expenses. More than half of marketers found social media generated qualified leads.”
This chart shows how respondents viewed the benefits of social media marketing.
Outsourcing Social Media
Because time and ROI are such a central focus for many marketers, it was surprising to see that very few were outsourcing their social media efforts. According to the report, some factors may be that social media outsourcing is fairly new and the majority of respondents were new to social media, perhaps yet unaware of what they should and should not be outsourcing.
The chart below shows how the majority of marketers are not outsourcing their social media activity.
Where we’re seeing the outsourcing trend is in the larger organizations. According to the report, “the larger the organization, the more likely outsourcing is taking place. For example, 25.7% of large businesses and 25% of mid-sized businesses are currently outsourcing, compared to only 10.6% of sole proprietors.” Like many marketing trends, what starts with the “big guys” tends to make its way to the smaller businesses—therefore, we may be seeing more outsourcing overall in the coming year.
Check out the full report here.
Now it’s your turn! Do you feel your time using social media marketing is worth the return? Does your own experience match up with the results? Share here—we want to hear from you!
The Maturation of Social Media ROI – by Brian Solis
Posted by Rory Martin in Social Media Marketing on January 26, 2010
Brian Solis is a principal at new media agency FutureWorks, and author of the upcoming book, Engage. You can connect with him on Twitter or Facebook.
The debate over measuring social media investment inspired many brands to cannonball into popular social networks and join the proverbial conversation without a plan or strategic objectives defined. At the same time, the lack of ROI standards unnerved many executives, preventing any form of experimentation until their questions and concerns were addressed.
In 2010, we’re entering a new era of social media marketing — one based on information, rationalization, and resolve.
Business leaders simply need clarity in a time of abundant options and scarcity of experience. As many of us can attest, we report to executives who have no desire to measure intangible credos rooted in transparency and authenticity. In the end, they simply want to calculate the return on investment and associate social media programs with real-world business performance metrics.
Over the years, our exploration and experience has redefined the traditional metrics and created hybrid models that will prove critical to modern business practices and help companies effectively compete for the future.
Early ROI Adaptations
Where the “I” in ROI represents investment, marketers have also explored ancillary elements to address the socialization of media, marketing, and the resulting dynamics of engagement.
Adaptations included:
Return on Engagement: The duration of time spent either in conversation or interacting with social objects, and in turn, what transpired that’s worthy of measurement.
Return on Participation: The metric tied to measuring and valuing the time spent participating in social media through conversations or the creation of social objects.
Return on Involvement: Similar to participation, marketers explored touchpoints for documenting states of interaction and tied metrics and potential return of each.
Return on Attention: In the attention economy, we assess the means to seize attention, hold it, and measure the response.
Return on Trust: A variant on measuring customer loyalty and the likelihood for referrals, a trust barometer establishes the state of trust earned in social media engagement and the prospect of generating advocacy and how it impacts future business.
But as we progress through the ten stages of social media integration, our views and techniques mature into more sophisticated strategies.
For many businesses, the case for new metrics can’t be made until we have an intrinsic understanding of how social media engagement affects us at every level. It’s not as simple as counting subscribers, followers, fans, conversation volume, reach, or traffic. While the size of the corporate social graph is a reflection of our participation behavior, it is not symbolic of brand stature, resonance, loyalty, advocacy, nor is it an indicator of business performance.
The Need for New Scrutiny
In 2010, social media endeavors are often still thought of as “pilot programs,” launched to steer a brand toward perceived relevance. Budgets, for the most part, are borrowed from other divisions to fund the largely experimental programs. Where that money goes and comes from depends largely on the social media champions who push for this experimentation from the inside.
In many cases however, new programs are introduced without an integrated strategy. Money is allocated from existing programs. If we’re going to take away from something, we should determine whether or not we’re justified to do so.
According to a 2009 study performed by Mzinga and Babson Executive Education, 84% of professionals in a variety of industries reported that they do not measure ROI.
In 2010, executives are demanding scrutiny, evaluation, and interpretation. Even though new media is transforming organizations from the inside out, what is constant is the need to apply performance indicators to our work.
The Business of Social Media
The CFO, CEO, and CMO of any organization would be remiss if they did not account for spending and resource allocation for social media.
MarketingProfs recently published a study by Bazaarvoice and the CMO Club that revealed the true expectation of chief marketing officers. The bottom line: They want measurable results from social media.
However, the study found that the exact implications of social media still evade CMOs.
– 53% are unsure about their return on Twitter ()
– 50% are unable to assess the value of LinkedIn () or industry blogs
Most importantly, about 15% believe there is no ROI associated with Twitter, and just over 10% cannot glean ROI from LinkedIn or Facebook ().
I believe this is the direct result of a disconnect between social media activity and a clearly defined end game. We must establish what we want to measure before we engage. By doing so, we can answer the questions, “what is it that we want to change, improve, accomplish, incite, etc?”
Defining a clear strategy can help us reach our social media goals, including:
– Sales
– Registrations
– Referrals
– Links (the currency of the social web)
– Votes
– Reduction in costs and processes
– Decrease in customer issues
– Lead generation
– Conversion
– Reduced sale cycles
– Inbound activity
Customer Insight
Customer ratings and reviews rose to the top of useful marketing feedback, as they delivered tangible ROI insight. In 2009, 80% of respondents reported that customer stories and suggestions shape products and services. As a result, brands earn the trust and loyalty of their customers by listening and responding.
According to the MarketingProfs study, CMOs will have more opportunities to engage with user-generated content in 2010, with many reporting:
– A 400% increase in use of Twitter comments to inform decisions about products and services
– A 59% increase in the use of customer ratings and reviews
– A 24% increase in use of social media for pre-sales Q&A
Monetizing Social Media
Social media metrics will be increasingly tied to revenue in 2010. To what extent seems to vary according to CMOs. The study indicates:
– 80% predict upwards of 5%
– 15% optimistically hope for 5-10%
In 2009, those companies that aligned social media investments with revenue estimates:
– 5% or less revenue tied to social in 2009 foresee an increase of an additional 5% in 2010
– 6-10% of revenue stemming from social media is expected to increase more than 10%
– Those with greater revenues resulting from social engagement expect an escalation of revenue derived from social at 20%
Companies like Dell are not only tracking the impact of social media on revenue, but expanding lessons learned across the entire organization. According to Dell’s Lionel Menchaca:
“Our @DellOutlet is now close to 1.5 million followers on Twitter, and back in June we indicated that @DellOutlet earned $3 million in revenue from Twitter. Today it’s not just Dell Outlet having success connecting with customers on Twitter. In total, Dell’s global reach on Twitter has resulted in more than $6.5 million in revenue. In fact our Brazilian and Canadian accounts are growing rapidly too –- and it was Canadian tweeters who asked to make sure Dell Canada came online to Twitter. Dell Canada responded because the team heard our customers. In less than a year, @DellnoBrasil has already generated nearly $800,000 in product revenues. Similarly, @DellHomeSalesCA has surpassed $150,000 and is increasing at notable pace.”
The Forecast for Metrics in 2010
Earlier we mentioned generic forms of social media metrics. The survey revealed that indeed, 89% of CMOs tracked the impact of social media by traffic, page views, and the size of their social graph or communities. However, 2010 is the year that social media graduates from experimentation to strategic implementation, with direct ties to specific measurable performance indicators.
In 2010, CMOs will seek to establish a connection between social media and business goals. The study documents the adoption of three metrics:
– 333% surge in tracking revenue
– 174% escalation in monitoring conversion
– 150% increase in measuring average order value
A Call To Action
Defining the “R” in ROI is where we need to focus, as it relates to our business goals and performance indicators specifically. Even though much of social media is free, we do know the cost of engagement as it relates to employees, time, equipment, and opportunity cost (what they’re not focusing on or accomplishing while engaging in social media). Tying those costs to the results will reveal a formula for assessing the “I” as investment.
When we truly grasp the ability to define action and measure it, we can expand the impact of new media beyond the profit and loss. We can adapt business processes, inspire ingenuity, and more effectively compete for the future.
More business resources from Mashable:
– The 10 Stages of Social Media Business Integration
– HOW TO: Use Social Media to Connect with Other Entrepreneurs
– HOW TO: Implement a Social Media Business Strategy
– 9 Great Document Collaboration Tools for Teams
– 5 New Year’s Resolutions for SMBs
– HOW TO: Choose a News Reader for Keeping Tabs on Your Industry
– 5 Advanced Social Media Marketing Strategies for Small Businesses
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