The following is according to research as reported by Forrester:
“Social tactics are not meaningful sales drivers”
They arrived at this conclusion after analyzing the primary sales drivers for eCommerce and found that less than 1% was driven by social media.
But this was prior to Black Friday and Cyber Monday of 2012. Surely, several years of investment into social media marketing would have paid dividends on over the biggest online shopping frenzy of the year?
According to IBM Smarter Commerce, which tracks sales for 500 of the top retail sites, social media made up less than 1% of Black Friday sales.
FaceBook, LinkedIn and YouTube combined contributed a dismal 0.34% to Black Friday sales.
Twitter, contributed 0%.
But social media has value, right?
Many proponents of social media marketing will point out that social media has less tangible benefits. It’s quite reasonable to assume that someone who sees your brand on FaceBook may not necessarily buy there and then, but may make a purchase further down the line.
Yes, of course, this is absolutely true. There’s no debate about whether or not it’s productive to have people talking about your company, brand or product on the social networks. Generating buzz, and building social influence do have value.
But let’s go back to the bottom line. Consider what your business has invested into all things social in the last few years. In tangible benefits, social media marketing has contributed less than 1% of your revenue.
Working out social media’s value
So, has this provided you with a positive ROI? If the answer is yes, then there is no further debate and you can continue happily with your social media marketing strategies and campaigns.
If the answer is no, then you need to consider the value of the intangible benefits of social media marketing.
Let’s be generous. Let’s assume that the intangible benefits of social media marketing offer an entire order of magnitude more revenue than the direct revenue. This would mean that social media brings in slightly under 10% of your online revenue.
Compare this to how much you have invested in social media. Do you like what you see?
And now, here is Dave’s take on the report: my caution here is to ensure your measurement metrics align with the quantative value you are trying to assign to the exercise.
In other words, based on the report, can we assume have they accurately tracked and logged exactly where the sales leades come from?
Are they calculating / have they established a base-line value for lead-up activities; impact of brand message frequency/repetition from online activities and compaigns that may or may not contribute to the final numbers?
Are they able to accurately measure and calculate the impact and value of word of mouth; forwarded content ect to this bottom line number?
In closing: Yes … I fully agree that it is difficult to accurately calculate the bottom line ROI of social media activities for your business and brand. However, they are a valuable asset to enhancing visibility and awareness of your product/service or brand as another ‘tool’ in your toolbox.
Message: Social media will never create the gains you require if used independant of a larger integrated marketing campaign.
The solution is to use social media as part of a larger integrated campaign that may include elements including online presence (website/blogs/professional networks, etc); POS marketing, marketing peripheral; advertising; publicity; promotions etc, based on your business model/ target markets / business environment and a variety of other influencers.