Has anyone ever asked you to demonstrate the ROI of a $1M TV spot or $25K brochure? Me neither. But suggest to a marketing executive today t...22 Jan 2010 2884 Views
Has anyone ever asked you to demonstrate the ROI of a $1M TV spot or $25K brochure? Me neither. But suggest to a marketing executive today that they spend a few thousand on a social media initiative and they won’t budge — unless you can prove ROI beforehand. And it’s not the recession that’s to blame. These are the same marketers who still invest in traditional media without any more ROI data than “that’s the way we’ve always done it.”
That is one reason why I find Erik Qualman‘s attempt to explain the convoluted world of social media ROI more useful than most. Like his previous social media video, this one excels at providing perspective. For instance, it reminds us that only 18% of TV spots actually generate positive ROI (and they are probably infomercials). The author of Socialnomics, Qualman also raises the second-most important question in the ROI debate: “Why are we trying to measure social media like a traditional channel anyway? Social media touches every facet of business and is more an extension of good business ethics.” While I think categorizing social media as “an extension of good business ethics” underplays the real financial benefits it can yield, his point is well taken.
Connecting almost any marketing investment to the bottom line is a tricky business. However, social media provides us with more data to support its efficacy in terms of precursors to sales like reach, frequency, response/interaction, awareness and positive perception than tradition media has ever done. And feedback is in real time allowing us to make course corrections to improve and increase results as we go.
What’s more, we can also document the growing number of business and private consumers who are engaging with social media each day. Which brings us to THE most important point in the ROI debate: What is the return on doing nothing?
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Speaker, consultant & founder of Duffy Agency, the flipped digital agency that provides accelerated growth to aspiring international brands.