Even as social media becomes more and more of an accepted digital marketing tool, the nagging question of how exactly to determine its Return on investment (ROI) remains. A recent infographic from MDG Advertising attempts to shed some light on the controversial topic.
Marketers Take Optimistic Outlook
One thing the MDG Advertising infographic makes clear is that for the most part, marketers are not letting ROI uncertainty affect an overall optimistic outlook on social media. Seventy-four percent of chief marketing officers (CMOs) believe they will tie social media efforts to hard ROI this year and 96 percent are considering factors other than sales goals and metrics in trying to identify social media ROI.
In addition, 76 percent of businesses use social networking to obtain business objectives and 64 percent of marketers are integrating social media into their efforts. It seems that the vast majority of businesses in the social media marketing game have been playing for about one to three years, as only 11 percent have been using social media marketing for more than three years and a smaller 9 percent have been at it for less than one year.
Recognizing the Intangibles
Many marketers recognize the "intangible” benefits social media can provide that do not easily fit into an ROI equation. The benefits most often mentioned by marketers are higher site traffic (68 percent), higher conversion rates (66 percent), and increases in the numbers of fans/followers and positive customer mentions (63 percent each). Furthermore, 72 percent of CMOs said social media has helped them close business. Sixty-five percent of marketers who invested at least six hours a week in overseeing social media campaigns said that search engine results have benefited.
Facebook, YouTube Leading Platforms of Today, Tomorrow
Facebook is the social media platform that CMOs say currently provides the highest ROI. However, 77 percent of CMOs plan to increase their investment in YouTube, narrowly beating out Facebook (75 percent) as the most popular social media platform of the future. Other popular social media platforms for future investment include Twitter (73 percent) and LinkedIn (61 percent).
Social Recruiting Soars
About 80 percent of CMOs said they used social media to recruit employees in 2011, with another 9 percent planning to start. Sixty-four percent of companies using social media to recruit employees report success.
Does Social Media ROI Matter?
Some observers believe that ROI is not even an important consideration when evaluating social media’s effectiveness as a marketing tool. For example, in a recent column, CMSWire columnist Jim Belosic, CEO and founder of custom Facebook Page-building tool ShortStack, very directly stated, “Social media isn’t only about ROI. And it isn’t only about sales. Social media is about branding, opening channels of communication with customers, building loyalty, being transparent and establishing good will. And if you cover all of those bases, then guess what? If your product or service is worthy, you will most definitely see a return on your investment.”
Social Media Users Favor Certain Products
As reported by Business 2 Community, statistics from Business Insider suggest that marketers in certain product niches may have more to gain from social media efforts. For example, the top shopping priorities of social media users are music, shoes and sex -- in that order. To target these users, marketers spent more than US$ 1 billion on social advertising each quarter, with US$ 992 million of it going to Facebook.