The most popular question I come across when proposing a social media strategy to clients is: how will I be able to see the return on investment (ROI) from developing a social media campaign? More and more, social media marketing is becoming a necessity for brands to generate awareness, yet revenue generation is not as apparent as it is with SEO and PPC (unless you’re investing in an ad campaigns). Businesses invest in marketing with the hope to at least cover the costs and increase sales, but selling companies on the idea of dedicating resources and outsourcing campaigns is difficult when the ROI might be difficult to properly track.
Key research from the 2011 Social Media Marketing Industry Report indicates that the usage of social media marketing is on the rise. Of most importance are the inherent benefits of social media: 88% reported an increase in exposure for their business, and 72% indicated that it helped increase traffic and/or subscribers. Despite those significant benefits, less than half of the respondents reported an increase in sales, which once again eschews the point about social media marketing being more of a branding tool compared to other revenue generation online marketing strategies.
Fortunately, there is hope for marketers to leverage social media marketing as a revenue generation tool as it is still in it’s infancy and rapidly evolving as we speak. The major social media tools at the time of the report were Facebook (92%), Twitter (84%), LinkedIn (71%), Blogs (68%), and Youtube and/or other video (56%). Notably absent is Google Plus, which hasn’t made an impact until recently and will most likely be near the top of the list in one year’s time.
A similar study done by Awareness Inc. found that respondents listed measuring ROI as the second biggest challenge (lack of sufficient resources being the biggest problem). There are a number of metrics to synthesize from social campaigns, but marketers need to be less focused on direct sales and lead generation and start focusing on improving their social presence, traffic, and shares. Lead generation and sales will eventually follow as a result of dynamic and creative social campaign that resonate with followers, either directly or indirectly.
To sum up, businesses need to invest in social marketing despite the difficulty in tracking ROI in terms of sales. Establishing your company brand in the evoked set consumers’ minds will prove to be valuable, and this can only be achieved with a fully integrated social media marketing plan of action. Sharing content, encouraging fan participation, and creating a community effect will produce positive results from a social campaign.