The Problem With Social Media and Word of Mouth Marketing
Return on Investment, ROI. It’s very difficult to show how being on twitter or facebook directly caused a sale. And this is the major thorn in the side for most businesses jumping into the social media scene.
At best ROI is very unscientific for either tactic. If you have 100 people talking positively about your product or service how can we really measure sales?
What are you doing to prove ROI in either of these tactics?
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July 28th, 2009 at 9:51 pm
This is the magic question. The first firm that figures out something for this problem has a great future ahead of them. It’s a combination of web analytics, well-structured campaigns, and marketing channel isolation. I hope this makes sense.
July 29th, 2009 at 1:51 am
I agree with what you posted here. I think that without a scientific measurement method to really grasp if being on social media sites like Facebook and Twitter actually help businesses, the ROI we are talking about here is merely speculative.
July 29th, 2009 at 4:53 pm
@EdgeCore we feel we have the Social Media ROI puzzle figured out…it involves a dash of ingenuity, 6 hard boiled eggs, a gallon of pickle juice (substitute olive juice if you prefer), some Twizzlers and most of all a heaping pile of WTF?
Seriously…nobody’s got this figured out…and that’s what makes it great! Finally a medium that is truly dictated by the consumer!
July 29th, 2009 at 5:24 pm
I agree, it’s very hard to connect the dots to actual sales. While I’m betwixt on social media marketing, I do think the ROI case you raise in this post could be said about PR too.
Twitter, FB, or traditional media channels…it’s all the same in the marketing context of generating and distributing/publishing compelling “content” that drives prospects to your web site and through your sales funnel.
Certainly, us marketers need to select and focus on the right channel(s) to increase brand awareness AND sales.
July 31st, 2009 at 3:11 pm
It shouldn’t be a decision to move from traditional to social media, but a decision to target your customer/client base — if they’ve moved, you move. In social media, it’s better that you’re already there to welcome your (potential) customer/client base because your competitors will.
August 11th, 2009 at 4:40 pm
I agree, it’s extremely hard to determine the ROI from tweeting all day. I think it’s important to look at social media as piece in your advertising/marketing puzzle. When we start to analyze each particular medium we sometimes loose the overall strategy and plan. The first step is to realize what your objective is for each SM channel.
I think it’s important to view SM applications as tools to help create stronger relationships with customers/clients.
August 12th, 2009 at 12:04 pm
We agree, and the social media articles out there (most of which have no substance) aren’t helping either.
We at REACTOR are conducting an experiment to see how social media affects ROI in service-based business. Funny thing is, we’re not a marketing firm, we’re a design and branding firm.
http://www.greatsocialmediaexperiment.com
August 19th, 2009 at 5:39 am
You have to wonder if this is not figured out sooner than later and SM is overtaken by the “next big thing”, will businesses abandon it as rapidly as they’ve taken to it? If theres no measurable ROI why would they stay and continue to put the (not insignificant) effort into it?
October 12th, 2009 at 6:14 pm
I agree that trying to measure ROI is like trying to put a value on outgoing phone calls or emails. But it is essential at least to some degree to quantify the effort you are putting into social media. The measurement to prove at least some type of return must be found or how can we justify spending the time on social networking. I just wrote a perspective piece on some ways you can prove some ROI for social networking. I know that SN ROI is getting to be a cliche, but it’s in place and more of an opinion than actual metrics. Let me know what you think. Love the blog.
http://jonproeber.com/a-perspective-on-roi-for-social-networking-determining-brand-equity.html