What Really Is Your Social Media ROI?
“Is social media actually helping your bottom line?”
That’s the question asked by Frank V. Cespedes in the Harvard Business Review. And he answers it quite boldly: #Nope.
This is the great fear of content marketers, that elephant in the room. The idea that all of the effort and time put into social media has been for nothing, that the measurable returns were measurements that didn’t mean anything.
When The House Always Wins
When it comes to gambling, the house always wins. But is social media a gamble? Cespedes seems to hint that it is, bringing up several key points to support his idea:
The actual reach of social media is poor.
We’re going to talk a bit about reach in the next section, because in some instances, this can be perceived as true if we’re speaking in terms of organic reach. With the vast amount of data being collected, particularly on Facebook, your paid reach can be particularly accurate.
Let’s talk about the reach of some traditional marketing, such as television commercials and newspaper advertising.
With the advent of DVRs and streaming services, the chances people are actually watching television ads has fallen significantly.
One 2010 study suggested that around 90% of people skip the ads with their DVR. In a recent Nielsen study, television viewership for the coveted 18–24-year-old demographic continues to plummet by more than 17% year over year. The number of people saying that they turn to social media to get their news, as opposed to traditional outlets, has doubled since 2010, from 9% to 19%, according to the Pew Research Center.
Advertising in print and on television is becoming less and less effective. People are online and on social media. Marketing must go to where the people are. Organic reach is not the only reach that must be taken into account when evaluating the effectiveness of social media as a marketing tool.
Cost and attention is improperly skewed toward social media.
Cespedes notes a Mckinsey study that shows email is 40 times more effective than Facebook and Twitter combined, but that businesses are devoting more time to social media and less to email.
We are big fans of email here at CoSchedule, with numerous posts to prove it. We don’t need any convincing of the high value of email as a content marketing tool.
It’s unfortunate that some businesses have chosen poorly in balancing their time and effort by slighting email in favor of social media. But social media can’t be blamed for hurting a company’s bottom line any more than copy toner can be if it is ordered to excess.
Social media is yet another tool, and the use and management of it is not its fault.
The result must be purchases, and not awareness.
There is always the hint that social media measurements have no meaning, that they are pure vanity metrics that make us feel good that people like us.
Let’s look at that.
Shares have value, maybe even more than likes. Social media has value beyond the almighty dollar in that it:
- Is a direct feedback line to your actual customer.
- Gets the word out.
- Builds an understanding of the habits and preferences of your audience.
- Helps you measure successful (and unsuccessful) content and campaigns.
But let’s say the only value you care about is the one with the $dollar sign$. Is social media horrifically lacking in comparison with other forms of marketing?
Because the measurements you can make from social media, such as traffic and followers, do not always make clear how many actual sales come from social media, social media naysayers warn against using something with a concrete ROI to make any business decisions or investments.
Unless a customer comes in directly from a specific piece of marketing—traditional or social media—and clearly indicates they are purchasing based on it, nailing down a concrete ROI can be tricky for more than just social media.
How many ads for a particular product did it take for you to have it in your memory so that, at some point in the future, you were receptive to it? How much marketing sold you on a brand by convincing you it fit your lifestyle? Did a celebrity endorsement or word-of-mouth bring you to a product? Did your television ad bring in a spike of customers, or did the fact that you sell snow shovels and a blizzard happened do the trick?
The truth is, both social marketing and traditional marketing have the ability to bring people in directly as customers and build familiarity with a brand through means that aren’t always perfectly concrete or absolutely measurable.
Awareness, though, has significant value despite it not having a concrete ROI.
In contrast, here is how social media influenced inbound blog traffic for CoSchedule last month. Just take a look at how readers coming from social media influenced the numbers of trials.
Though it’s hard to directly connect all of those product signups to social media, it’s very likely social media influenced the end result.
Cespedes makes some interesting (and valid) points in his article, but he takes a very specific angle. It’s one that is common for those who view the idea that you must pay to play as a sign that social media does not work. Is this a true picture of what happens when money and social media collide?
Paying To Play On Social Media
Perhaps this negativity toward social media stems from the changes that have happened on Facebook in recent years.
Organic reach by pages and brands has been effectively corralled, and the same content that used to reach followers rarely does without paying money to put it in front of eyeballs.
The complaints and tales of woe from brands who have seen pages they’ve worked hard at building up over the years are legitimate: The followers who liked their pages willingly don’t see much from them unless they pay Facebook to show them.
Show your page to your followers? Show Facebook the money first.
But let’s take a different look at this Facebook pay-to-play plight. Is the anger and panic warranted?
1. There are many different networks. Facebook isn’t all of social media. It’s a big part, but only part. There are other social networks that reach different types of audiences, and not all of them have begun rewarding paid promotion (yet).
2. Your marketing reaches the real audience. Should reach only be measured if it is “organic” reach, i.e. no money involved? Or can reach that is paid for be a viable measurement, too?
This new approach of paying to promote content isn’t new at all in the marketing world, and it actually makes Facebook, with its 1.35 billion active users, a highly efficient use of your advertising dollar. At last! You can target your ads for extremely specific customers instead of mass mailings or commercials to anyone who might be around.
Unless you refuse to spend money to promote your business, paid promotion on social media should be a part of your full marketing arsenal.
The refusal to do anything that isn’t free, in an era where more and more services are finally looking for revenue from the service they provide, is going to leave you in the lurch in the long run. You must take your business and brand seriously enough to put some dollars behind it.
3. Your promoted content is seen more. Cespedes points out a study that showed social content only reached about 2% of followers. That makes sense when you consider the speed at which your social news feeds cycle through and how often you check them.
But let’s consider promoted content.
Facebook’s promoted content system allows you to reach more than the 16% of your fans than you would reach organically. They also have a program where you reach friends of fans. Think about that for a minute. You will reach more than a few fans because it will be shown to more people, and more often, than an unpaid post.
4. Social media accounts are not your home base. Facebook (and social media) were never your main Web site or source of content. They were always tools to reach an audience, much like other forms of advertising (which you pay for).
If your Facebook page or other social profile was your only online presence, you’ve put yourself at the mercy of another company. We preach blogging because digital sharecropping is bad. Remember that. Don’t put all your online eggs in the Facebook basket, and then panic each time the algorithm shifts.
This concept of paying to play on Facebook is only horrific to a business that has always relied on free marketing. And that was never a good plan of attack for anyone serious about their marketing.
Targeted Ads And Promoted Tweets
Let’s not just focus on Facebook, though, and consider Twitter. Twitter is still a highly effective driver of traffic. Guess what you can do to increase that even more? Pay for promoted tweets.
CoSchedule has seen huge traffic advances come in through promoted tweets.
If you’re seeing success with a social network and you realize it’s bringing in lots of organic traffic, it only makes sense to build on that and pay for promoted content. After all, you clearly have a natural audience there—why wouldn’t you build it even bigger using the targeted tools at hand?
If you have 500 followers happily retweeting you on Twitter, promote some tweets and build that number exponentially.
Perhaps the question isn’t whether paying to play on social media is worthwhile or wrong, but rather, how you choose to pay to play. Here is where we answer Cespedes’ argument.
Buying Followers, Friends, And Email Lists
The argument that a mass of numbers serves little purpose is one I can agree with.
Cespedes, and similar social media detractors, bemoan the fixation on followers and other numbers that don’t reliably translate into anything and instead lead to really bad marketing decisions and expenditures.
The fixation on numbers has led to pay-to-play behavior that fails miserably. Remember the Great Instagram Purge of 2014?
1. Buying followers and friends. Unless you think it’s really important for people to believe you are popular, buying followers on social media serves absolutely no purpose. It’s a complete scam.
High follower counts might suggest social proof at a glance, but people are more skeptical now, and there are serious risks. Public shaming, for one, when your fake followers are discovered. And there are tools that make it easy for people to find out how many fake accounts are following you.
Plus, you are polluting your own ability to find trends that indicate a legitimate upturn in your own content marketing activity. You are feeding the problem of lies and bots on social media.
And let’s not forget that you’re breaking the social network’s terms of service. Why would you endanger your hard work by buying bogus, useless followers?
2. Buying email lists. I get a lot of mailings that are trying to sell me new tires for my car. I throw those high-gloss postcards in the garbage. What a complete waste of someone’s marketing dollar.
Buying a mailing list of random people is not marketing. That truly is gambling. It’s the shotgun approach, hoping if you spray your ads in a wide enough area, you’ll get a few takers.
The same goes for buying an email list. On top of that, you run the risk of your domain being marked as spam enough that legitimate emails will have trouble getting through.
It’s a waste of money and you damage your brand’s name and reputation when you push your marketing on people who didn’t ask you to.
Simply put, paying for promoted social content works. Paying for followers and email lists does not.
Both use social media, but it is not fair to use the latter as a reason why the former would not be viable.
The Value Of A Known Brand
Sometimes you wanna go where everybody knows your name.
Social media helps to make your brand known. If you were to distill it down to the very basic concept, that’s the one I’d run with.
It helps make your brand known. People see your logo. They see the name. They see other people talking about the brand. They see the brand doing things. They see the brand’s content. It becomes familiar; it becomes known.
That’s what you want, more than anything, is for people to have your brand tucked away in their mind as a safe and normal thing. That way, when the need arises, you are the first to come to mind. You want your brand to stand out in your industry. This is how you get a larger audience.
It’s all because of the propinquity effect.
Propinquity is when you are physically or psychologically in close proximity to one another. People who are around each other a lot, who see each other frequently—they are more likely to form a relationship.
Close proximity means connections are likely to occur. The higher the propinquity, the more likely a relationship will form.
That’s exactly what social media lets you do. Propinquity.
You cannot get physically close to a potential customer across the globe, but you can be seen frequently and get psychologically close by appearing in their social media feeds. They get used to seeing you, and they are more likely to connect with your brand than one they have not seen before.
How Will You Measure Your Social Media ROI?
Social media is, at the most simple definition, people telling other people about stuff. They are saying, “I think you’ll like this information that I found.”
They are doing what we do in real life when we sit down with our friends and tell stories about a great restaurant we went to or a fabulous product that worked wonders. It’s hard to measure, but it truly happens.
When you pay people to do that, insincerity comes through. Racking up meaningless numbers to justify a plan of action is never a wise move. But truly connecting and making it easy for people to discover you means the wonderful word-of-mouth effect is in place.
How many times did you buy something based on Amazon reviews? How many times have you signed up for a service that you saw in a promoted tweet that you wouldn’t have heard of otherwise? How many times have you seen an ad or promotion that made you curious and eventually turned you into a customer? How many times has someone sold you something because they tapped into what you already liked and preferred? How many times did you become aware of a brand before you really cared, only to turn to it when suddenly their product met a need in your life?
It’s worked on you, and it works on other people.
Social media isn’t ephemeral magic or bewitching numbers, but merely another version of people talking to people. And that has always worked when it comes to marketing.