Question: What’s as legendary as the Lock Ness Monster, or as allusive as the Publisher’s Clearing House Million Dollar Prize?
Answer: It’s an acceptable ROI on your business’s digital media efforts…or some would have you believe.
While a return on investment for social media would appear to be one of life’s great mysteries, there are a number of ways to wrap your brain around this vexing issue.
Media is media. Businesses have always needed to market, and the same question always arises, “How much money do I have to spend to convince people to buy what I have to sell?” Whether you spend money on traditional media like TV and radio or social media like Facebook and Twitter, you will always be faced with the uncertainty of which ad at what time and place compelled the consumer to become the customer. We must demythologize digital and social media if we are going to alleviate the anxiety and the angst over spending advertising dollars on digital and social media without feeling like we are chasing an imaginary audience. It’s easier than you may think.
It begins by managing your expectations. Understand that successful marketing is an exercise of trial and error. Messages, resources, and social media channels need to be tested constantly. More resources are committed to the formulas that have an acceptable level of response and return, but the testing should continue to keep pace with evolving markets and delivery systems.
The ultimate goal is to get conversions (customers) and keep conversions, but that is the result of a marketing process. The process begins with presenting yourself to your audience and then trying to figure out if they notice you enough to do something about it. Any great salesman will tell you that the secret to selling is to develop a relationship with your potential customer. Until recently every social media marketer was glued to analytics that would tell you how many friends or followers you had. The enthusiasm for those great numbers died quickly when owners realized those indicators weren’t translating into an increase in customers. It turns out we were looking at the wrong thing.
It’s now apparent that meaningful response to social media messaging comes when someone is willing to engage. That engagement takes the form of traveling the next step down the sales funnel, whether that is sharing a post, hitting a recommended link for more information, or actually giving you contact information that you can now use to create that relationship. Now that you know that engagement is the goal, you can make sure that your social media dollars are going towards a strategy that compels the viewer to engage. The more people you have drawn to the step of engagement the greater success you will have in creating a relationship and ultimately making them a customer.
Measuring your Digital and Social Media ROI is not just limited to small business owners. Global marketers both in Europe and America have increasing pressures to prove their worth. The illustration below shows how the digital channels rank in their ability to measure ROI from global marketers.
A newly-released survey [download page] from Econsultancy and Oracle Marketing Cloud that analyzes global marketers’ ability to measure ROI from a variety of digital channels finds that there is only a single discipline that most marketers rate themselves “good” at measuring.
The survey – fielded predominantly among European marketers, who made up three-quarters of the sample – found that 52% of company respondents consider themselves “good” at measuring ROI from paid search (PPC). Similarly, 53% of agency respondents rated their clients’ ability to measure the ROI from paid search as “good.”
No other discipline was able to crack 50% of respondents rating themselves “good” at ROI measurement. In fact, email marketing (for acquisition) was the only other channel for which respondents (both marketers and agencies) were more likely to rate themselves as being “good” than “okay.”
On the other end of the spectrum, just 13% of company respondents rate themselves as “good” at being able to measure the ROI of video advertising, and just 12% of agency respondents agreed with respect to their clients. By one measure, though, content marketing fared even worse: a plurality 43% of company respondents rated themselves “poor” at measuring content marketing’s ROI. That was the only channel of the 19 identified in which more respondents considered themselves “poor” than “okay” (41%) or “good” (16%).
Social media investment also appears to be a pain point, according to marketers and agencies, echoing the sentiments of US CMOs as noted in the study referenced above.
Despite those difficulties, inability to measure ROI is not the primary hindrance to increased digital marketing investments, per the Econsultancy study. Instead, marketers were most likely to say that a restricted budget for all types of marketing prevents more investments in digital, while a lack of staff to make the most of digital investments was the second-most cited barrier. Interestingly, agency respondents see a lack of understanding about digital and company culture as the biggest impediments to clients investing more money in digital.
That’s not to say that there’s not money flowing to digital marketing, though. Instead, this latest annual study finds digital marketing budget expectations to be at their highest point since the survey’s inception in 2010, as 77% of respondents plan spending hikes this year, up from 71% in last year’s survey. Of note, 71% of company respondents agree that it has become easier to secure boardroom buy-in for increased digital marketing budgets, an increase from 64% last year.
Social media marketing and the results of that marketing shouldn’t be a great mystery. Put together a plan (or find someone that can do it for you), commit the proper resources to executing the plan, and execute the plan knowing that you have invested wisely in something that’s real…not a legend. Call me today to create a marketing plan that is tailored for your business. 702.374.1944