The topic of ROI in social media is one that seems to be constantly on the minds of marketers in a variety of industries. If you type “social media ROI” into Google, there are approximately 24,300,000 results. There’s good reason for such a high number of results. According to a September 2011 post on the Digital Buzz Blog website…

  • 96% are starting to look beyond sales goals and web metrics to identify the value of social marketing efforts
  • 76% of businesses are using social networking for business objectives
  • 64% of marketers are integrating social media into their marketing plans

Since these stats are nearly a year and a half old, it is likely the percentages in the latter two stats have increased.

This will be the first in a series of periodic articles about the ROI in social media. It’s just such a juicy topic that no one single post could adequately do it justice.

There’s no question that the means of promulgating a message to a target market have grown in complexity over the years. According to the Distribion white paper “Email Evolution: The Times Are Changing”, the average newly minted marketing MBA in 1990 was only familiar with 10 marketing mediums. In more present times, the number of marketing channels that a marketing MBA would need to be familiar with expanded to 26, including a multitude of social and digital environments. In such a complex ecosystem, there’s a need for assistance.

The nuances within digital media vary from medium to medium. PPC platforms like Google Adwords have different timelines for producing results than initiatives in the social mediums. The same metrics of evaluations do not transfer from one platform to another. Adwords would produce more instantaneous results, whereas implementing social media initiatives and certain SEO/SEM initiatives take longer to have the desired impact.

So, where can an ROI be found in social media?

The first thing to remember about social media is that it is indeed social. It’s not always just about you and your goals. Social media is indeed social, and brands should exhibit social graces. There’s a bit of listening required in this new media environment. Think of social media as one very large cocktail party. At a cocktail party, one isn’t always talking about themselves. If they are, they become less popular quite quickly. It is important to listen to others and engage productively with others. This is a key tenet of a successful social media presence.

However, just because there are some softer elements to social media, that does not mean that social media can’t have an impact on the bottom line. Social media should be subject to metrics of evaluation on ROI like other ad spend mediums. Analytics definitely have a place in social media, but what’s most important is defining the right analytics. Number of views and number of likes and followers can be considered productive metrics to an extent, but if these metrics lack quality, ROI won’t be there. There needs to be a balance between quantity oriented metrics and quality oriented metrics. I would place a heavier emphasis on connecting with the right people in social media rather than having the most followers. The social media landscape is littered with stories of brands that have had many followers and likes but not converted that following into sales and revenue. A smaller following with greater sales and revenue is a far more desirable outcome.

Social media is also not a single entity. There are so many entities that make up social media. Facebook and Twitter are the most comprehensive ones. YouTube is the go to site for video, and the 2nd largest search engine. LinkedIn is the hub for business networking. If a brand is quite visually oriented, Pinterest is essential. Beyond that, there are a myriad of niche networks that have usefulness as well. When there’s multiple places to be at the same time, there’s a need for social media marketing automation.

Another one of the challenges in social media ROI is that sometimes it is perceived as a standalone solution. It should not be meant to be perceived that way. A presence in social media should augment presence in other marketing avenues, such as email marketing, search marketing, and traditional marketing mediums. This is all budget dependent and will vary from brand to brand. However, this should not be interpreted as a way for social media marketing efforts to get lost in the shuffle of the marketing mix. It is highly recommended that any brand set up specific tracking methods and analytics to determine the efficacy of all social media marketing efforts.

When a brand does social media marketing correctly and has it working in conjunction with other elements of the marketing communication process and the marketing mix as a whole, magic happens. Brands are more positively perceived, brand equity is bolstered and most importantly, there can be a strong, positive effect on the income statement. That’s where the social media ROI can be found.