It can be an ad network. Facebook is now the #1 display ad network, delivering 31% of impressions.
It can be a PR vehicle. The number of PR firms receiving more than 15% of their revenues from social media activities is up 50%+.
It can be a market research source. Over 75% of respondents to a survey by Valued Opinions said they use social media to share thoughts on a product or service.
It can be a customer support channel. More than half of the F100 use Twitter for customer support, according to Burson-Marsteller.
Unless you’re into philosophy, asking about the ROI of social media is the wrong question. Marketers don’t usually ask, “what’s the ROI of print?” Instead, they ask how a newspaper coupon, yellow pages program, or magazine media outreach performed. The most actionable questions go right to the program or campaign level.
But because campaigns vary, there are 100 different ways to measure social media. Here’s a synopsis for those of us who don’t have the time to read the whole list:
1. Monitoring buzz content (quality, quantity)
2. Increasing social engagement (friends, comments, virality)
3. Improving customer support (cost, speed)
4. Extending other marketing (TV, search rankings)
5. Driving revenue (visits, leads, purchases, LTV)
Social media has plenty of measures, not all of them revenue. Monitoring buzz tells us how top of mind we are and the prevailing view of our brand. Counting friends or “likes” tells us the reach of our social dialogue and how we compare to our peers. Measuring our follow up to customer postings tell us how responsive we are. Assessing visits to our Facebook page during a prime time buy indicates effectiveness of TV advertising.
Armed with this thinking, we can answer more productive questions like, “Did campaign A achieve our goals? Did it work better than campaign B?”
Because the medium is so new, we invest more time than we should in existential areas like “what’s the ROI of social media?” That’s important for resource discussions such as the number of marketing staff allocated to monitoring, blogging and tweeting but not useful in helping marketers assemble their marketing plans.
Because the medium is so new, we also lack the experience that enables us to make gut decisions about programs based on past performance. We simply haven’t seen enough results to render an opinion.
It’s in these cases—diverse applications, minimal experience, and low (current) costs where it’s most critical to focus our questions on the campaign level. First, we need to decide what comprises the “R” in campaign ROI and then we need to measure it.