One of the big debates in my industry (internet marketing and social media) is how to calculate the ROI of things like Twitter, Facebook and blogs. The problem is, everyone’s talking and no one’s paying attention.
Dollar for dollar, you CANNOT measure the ROI of these tactics.
There. I said it. Now, after the shock wears off, let me explain.
Say I see a tweet for a local restaurant, but don’t rush out to patronize it that week. However, three months down the road I happen to be in that area. I have a choice of several restaurants, but remembering that tweet, I elect to eat at that one. How do you measure that? I probably won’t tell the waitress that I’m there because of a three-month old tweet.
Marketing online is less about cut and dry marketing=sales, and more about engagement. How much are people engaged in what you’re doing?
- Are they commenting on your Facebook Page frequently (and for that matter, are you?)?
- Do they retweet your comments on Twitter?
- Do people follow you on Twitter and Like your Facebook Page?
- Are they commenting on your blog posts? Sharing them?
- Are they telling others about your business? (this is the big one)
It’s hard to engage people when you just tweet promotional links. You have to provide something useful. That could be links to articles and blog posts (even when they’re not yours), providing free advice and generally trying to be helpful.
There are companies that have developed complex systems to tell you what the return on engagement is. But my guess is you can figure it out if people are paying attention to you online and telling others about you. The sales will follow.
6 Comments
I totally understand what you are saying! But I still think ROI is a topic marketers and theorist have to pay attention to, and try to develop some kind of methodologies to measure ROI… in some way. I get the impression of companies to pay for services like communication counseling within the social media, they expect to see somewhat ROI. Or if you just are a marketer within a company, the CEO wants to see how much the resources spending on social media actually generate of revenue/sales. If any business invest some money, they want to see how much it generate!
We can all agree that it’s because of an old mindset, and we shall try to convince them how the new media landscape have changed the way we communicate, and the new way it adds value to companies. But I think we still have to acknowledge the old mindset in the business, that it’s all about money and ROI.
I’m afraid it’s not good enough for businesses’ when marketers says social media has nothing to do with ROI, and then businesses’ might turn their back at social media. Recently I have also been told that many companies are reluctant to join the social media because of legally issues.
So many people use social media but do not have any clear objectives or goals of what they are using it for!
Tweet: “Just taking the dog out for a walk” Who cares!!!
On the other end of the spectrum are the article and the sales spammers! They add no value whatsoever to the experience and just spam out links to their products etc.
The acid test question is this:
“Are you expanding your reach via social media?”
AND
From those new people in your “network”, how many are you actually getting to your websites, signing up to your newsletters and buying your products.
Easier said than done!
Sean
Sean McPheat
I guess the difficulty is waiting for all your social interactions to pay off. The hours spent on FB and Twitter at the outset, don’t equate to the increase in sales, and that is the hard part. To “keep on keeping on” even if you are not sure there is going to be a return for your efforts.
Hi Susan,
Thanks for the tips. I have yet to do a FB page for my home business, but it’s on my list.
There are other sites one can use to promote too, such as LinkedIn.com or HomeBasedBusiness.com, etc.
All the best,
Alan
I could not agree with you more…
Best example is that old spice campaign.. great eyeballs.. fantastic engagement.. great for branding…
Sales…. NOT so much… my understanding is that sales decreased by 7% and increased again after the “buy 1 get 1 free” coupon offer…
I guess old marketing still works??
@Jeppe–
I’m not disputing the importance of ROI, but suggesting we change how we measure it.
@Sean–
Agreed. We have to make our efforts meaningful. Simply “being on Twitter” won’t do it.
@Vanessa–
I try to ensure all my clients understand that seeing results from social media will take a long time. There’s no instant pudding!
@Alan–
I didn’t know about HomeBasedBusiness.com. I’ll check it out.
@PayPerPerformance–
I thought I heard Old Spice sales had risen? Well, that’s a long tail too. You won’t run out and buy the product today but you might down the road.
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