Social Media – Its Power, ROI & Marketing
For sure, Social Media has exploded and has helped online businesses to a great extent. Just a simple search on Twitter would reveal you the plethora of social media enthusiasts in the world who earn their daily bread through it.
Social Media has emerged as the single largest viral marketing source in recent times. I doubt if there is a close second spot to it. The immense online advertising opportunities it holds are utilized in every walks of life viz. politics, marketing, branding, networking etc. The power of Social Media lies in its ability to build up a relationship damn quickly and being able to sustain with it over a period of time. It is amazing to interpret from this research that it is women who rule the social media usage over men; and this ‘relationship’ funda which is considered emotional to some extent strikes the correct chords with them.
Social Media Marketing is another area which is worth pondering more than a thought for reasons because it has revolutionized the way products and services are advertised. Advertising is more about communication with your target audience by treating the web as a platform. Since the web 2.0 revolution, courtesy Social Media, new jargons such as Online Advertising, Internet Branding and Internet Marketing have been redefined. “Express Yourself” would be the correct articulation of a thought that businesses and customers implement on various social networking sites such as Facebook, Twitter, LinkedIn etc.
This video by Chris Pirillo helps us know better why Social Media has become a craze across all generation users. Chris very rightly puts it across when he says “Markets are conversations” and clearly explains how can a brand lure its user by sheer engaging of thoughts. Social Media has changed the way we consume information by making us engage in what they want. Isn’t it a brilliant business model ? Yeah .. it is !!
But, therein lies a challenge for every brand. Social Media is so much decentralized that it gives every brand the equal amount of opportunity to evangelize itself. The sooner Brands understand that their locus of control lies in the way they engage, communicate and converse with the user, the better it is for them.
Lastly, the efficiency of any business cannot be interpreted until and unless you calculate its ROI. The ROI of Social Media is a widely debatable issue, because people assume it to be something which is based on human interactions and engagement; and it is in verity difficult to quantify this. The currency return on the Social Media lies in the way relationships are made and the amount of content and time used in building up that particular relationship with the customer. Mashable wrote a great article on How to Measure Social Media ROI for business and clarified the calculations by considering two aspects Qualitative and Quantitative.
Indeed, the conclusion remains the same for probably every attempt to calculate ROI on Social Media Business and i.e. Benchmarking your parameters in a success metric.
Is anyone out there who can automate this process of calculating ROI ? I leave the floor open for you 
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I will keep my eyes wide open to a response for the last line in the article, because this is the key. How and when can we come up with a right estimate of social media ROI. There has been a lot of discussions on this and I have been following keenly for an answer.
Rahul, We all are waiting for anyone who comes out with a statistical technique for the correct calculation of Social Media ROI. Unfortunately, I don’t think there is any that exists.
The ROI will depend on what you are investing. When you compare the money pumped into social media in general, it is a pittance against what people spend on traditional media. So the essential investment is time.. in such a scenario how can its return be measured in money?
Just a random thought really…
When Tata Motors book a full page ad on all the national dailies for Nano, what’s the return on investment they get..how do they know which buyer has come to them on the basis of that ad, and if at all it is from that ad from which newspaper..and how can even the buyer be sure that it is the newspaper ad that convinced him and not the review they wrote in the newspaper.. How exactly is the ROI judged there..perhaps an answer to that will also help answer the ROI of social media as well…
An ROI on Social Media is not impossible but it is difficult. People I have spoken with go about retaining an ROI in a couple ways. One is based on exposure to the market and brand adoption and the other is purely financial.
For the adoption metric, we must look from the start of a social media campaign how many people have been attracted to the brand/product/service and look at the exponential possibilities of tapping into our 2nd and 3rd level networks. The return on this is shown by watching the exposure of your brand/product/service reach additional people without any effort on your part. When your network starts becoming your evangelists, the return will always continue.
The financial metric is a bit more hardlined. Look at what social media platforms you are using and track the revenue coming from them. Many of my customers were unsure how to do this while directing all their customers directly to their website so we made some minor modifications. An example would be to have a Twitter account linked to a subpage on there website “www.yourdomain.com/twitter” and seeing how much traffic was driven to that page and ultimately capturing the lead or sale information from there.
Sorry about such a long comment. I would like to know if anyone else has a different approach to this.
Now is the time to take social media seriously. Social media sites are not just there so that users can find friends, but best too if used for business.
Guys, Thanks for your comments.
I completely agree with Maneesh.
Majority of the blame should go towards Traditional Advertising Agencies [and the guys from these madhouses who've invaded the Internet Industry] and Digital Agencies, who always pitched this “Interactive”, “Action” , “Measurable” story to the Marketing Heads of Corporates , who reads “email print-outs”. Now all of them look at Internet, only if they want a campaign thats interactive and requires an action from the customer thats measurable. Why the hell cant the client treat Internet at par with Press or TV?
Its ok to burn a crore on a newspaper ad without any ROI definition but when they spend Rs.40 for a CPM on Internet, they need leads ….Oh yeah… My foot!!!
I think, its time for the so called Marketing [pea]Brains of corporate India to “Grow up” and have a facebook/linkedin account
I read the views of Maneesh and HyperLocalEdge. I agree with what Maneesh says and that thought actually looked genuine to me. Because, I too don’t think it is possible to calculate Social Media ROI in that situation.
HyperLocalEdge, I appreciate your long comment and your explanation. Probably ROI can be calculated the way you mentioned. I am not too sure about it because I have not implemented it. But, for sure, it does make sense
Joe, good point you bring up. Somewhere, these digital agencies are great marketers and they deserve the respect. Also, just because these corporate brains are a bit apprehensive about social media, they are not able to judge a particular scenario pretty well.
Guys, Thanks again for all your comments. Most appreciate your views.
Deeptaman,
Hope you didn’t get my point right. I was mentioning that its the “agency” mindset that messed up the Internet Industry in India.
I do not know of anyone beyond rediff ( jobsites/property portals/matri sites are classified cites) to have targeted small organisations sell Internet/Social media marketing solutions . Most of the digital agencies were happy creating micro-sites for campaigns ( sunsilk gangofgirls etc..). None of them have pitched Internet like print or TV.
Its time that we also need to grow out of this stupid “agency” mindset of serving impressions
Note : Digital agencies in India have done nothing beyond charging 60K for a banner worth 2K…period.
Deeptaman,
I was a little perplexed with the blog speaking about ROI, but not seeing any numbers. Aberdeen Group did a research in Feb 2009 and came out with this interesting data. I have forwarded the Report to your gmail Id. You could throw more light on this with another post!
Five Compelling Facts from the Research, Providing Actionable Benefits for Readers:
* 58% of Best-in-Class companies have dedicated resources devoted to social media marketing
* 61% of Best-in-Class companies have online community platforms (e.g., discussion forums, ratings and reviews, etc.)
* 68% of Best-in-Class companies increased their investments in social media marketing while 34% are keeping their investment level that same as last year
* 84% of Best-in-Class companies, compared to 44% of Laggards, aim to track and measure the ROI of their social media marketing activities
* 58% of Best-in-Class companies have dedicated resources devoted to social media marketing
Cheers.
The ‘most social’ brands are the ones that have great products, not the ones that are most active in social media. Perhaps ROI in social media starts with great products and service, and social media is really word of mouth? And then getting higher ROI is word of mouth marketing…ways to amplify the customer voice.