Social Media Study Shows ROI
Social media marketing drives sales, a new study says. According to the study by Wetpaint and the Altimeter Group, “companies find correlation between brands’ social media efforts and financial performance.”
The challenge is that this study looked at the 100 most valuable brands in America. Great. What about the other thousands of brands that we all know and love that don’t have the money or power of Google, Microsoft and Starbuck’s…all which fared well in this gauge?
First, the study confirms that deep social media engagement with consumers through online channels correlates to better financial performance. The ENGAGEMENTdb study (www.engagementdb.com) showed significant positive financial results for the companies who measured as having the greatest breadth and depth of social media engagement.
In short: social media marketing delivers measurable ROI.
These “Social Media Mavens” on average grew company revenues by 18 percent over the last 12 months, while the least engaged companies saw revenues sink 6 percent on average over the same time period.
The good news is that it’s true that better engagement with your prospects will drive sales, and online on social media marketing will work wonders. But the real danger with this study is that many marketers will look at it this and say to social media marketing agencies like CBC: I want that! Now!
It’s like a couch potato looking at Men’s Fitness and not realizing the amount of time, dedication and hard work it takes to get AND maintain a model-perfect body.
So if this study serves as inspiration to get going on social media marketing, I’m all for it. But a word of caution: online and social media marketing requires a great plan, a full commitment and a new mindset for marketers. It’s not about a Facebook page or Twitter feed, which are merely parts of your infrastructure. It’s about creating content in all its forms that is valuable, entertaining and, most importantly, not available anywhere else. Then bringing all your resources to bear to promote and maintain this communication platform.
Watch this space for a new eBook: The 7 Deadly Sins (and 7 Golden Rules) of Social Media Marketing. It should be ready in the next week or two.
Tags: online marketing, Social Media Marketing, social media ROI, social media study
July 22nd, 2009 at 8:04 am
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July 22nd, 2009 at 11:47 pm
With several social media sites now offering slash-brand-name extensions on the site names, there is a trend to cash in on social media marketing.
The core issue here is brand relations risk - there is still lack of direct control by the brand owner on what information is posted on their social media site and made visible to the public.
July 23rd, 2009 at 10:14 am
@Eric,
Brand Relations is very important, but since you have no control over what gets posted where, it is important to be “socially” responsible too
It makes companies better behave with their consumers who were until recently taken for granted.
@author,
Social Media ROI has always existed, but it just depends on how you pitch the same to the client.
July 23rd, 2009 at 10:31 am
Could not agree more about companies being “socially” responsible. But it takes a wholesale change of mindset for clients. With traditional marketing, you created something like an ad or press release, and then unleashed it on the world. Maybe you had an agency do some follow up; maybe you dropped a coupon or mailer. But whatever the case, you created something, let it fly and then sat back and watched the magic happen.
Along comes the social web and marketers are all abuzz about “two-way communication,” ‘one-on-one marketing” and “conversations” with customers. Guess what? If you want to manage conversations with thousands of customers and prospects, it takes a lot – and I mean A LOT — of time. And because these prospects are busy people that are inundated with messages, it better be good, fast and specific.
But in the end, isn’t this the kind of engagement we always wanted? Thanks for the comment!