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CMO/Marketing Strategy • Market Research • Social Media Marketing
What’s the number one pain point for social media marketers? It’s the difficulty in calculating the Return on Investment (ROI) from social media campaigns. This according to the latest 2011 Social Marketing Survey from Chief Marketer Magazine, where more that 52% of 750 marketing professionals indicated that the difficulty in calculating social media marketing ROI was their number one pain point.
This followed closely by 42% of respondents who indicated having difficulty in tracking / attributing results, greatly inhibiting the ability to calculate the value from social marketing and tackle the ROI measurement challenge.
Frugalnomics is in full effect, with continued economic uncertainty creating a budgeting environment that is more skeptical and frugal. As social marketing budgets continue to grow and reach critical mass, marketers are being challenged to defend more social media marketing increase requests.
Corporate leaders are rightfully seeking proof that social media marketing campaigns are delivering tangible value, wanting marketers to stop talking about the potential of the channel, and stop the marketing speak around increases in the number of followers and friends. Instead, economic-focused leaders want marketers to translate the increase in social media marketing spend to tangible business value, particularly quantifying incremental revenue, improved marketing effectiveness, risk avoidance, brand value increases and more.
Survey results indicate that marketers are distant from being able to prove tangible value, as performance measurements remain rudimentary
According to Content Marketer’s analysis, “when it comes to how they measure social success, raw numbers still take precedence. Sixty percent of those polled in the 2011 survey say the number of fans, followers, friends and likes they can get to sign on still counts as their top metric. That’s virtually the same proportion that cited head counts as the primary measurement tool last year.”
Of those surveyed, about one in three organizations are currently tracking social media derived leads, which can be used to calculate value, the marketing equivalence of what it would take to generate the same number of leads using other channels:
Value of social generated lead = Number of leads * typical cost to acquire a lead via other marketing channels
As well, the number of leads can be used to estimate potential transactions over time:
Incremental revenue = qualified social generate leads * lead to opportunity conversion rate * opportunity to close rate * average revenue per transaction
Of those most able to best defend budget allocations and prove the tangible value of social media marketing efforts in CFO terms, using the, 25% of organizations are currently tracking incremental revenue from social media marketing efforts.
Marketers are self-aware that current measurements are falling short of expectations, with 40% admitting that efforts are Not Effective at All, or Not Very Effective. Although resolving measurement shortcomings has been a priority, and more monitoring tools are available than ever before, only 13% of marketers indicate that they, or their agencies, are Very Effective at measuring social campaign effectiveness.
Adoption of social marketing has been quick, indicated as a marketing strategy used by 74% of respondents. However, there are still holdouts, also struggling with ROI factors, with 32% indicating that they have a hard time convincing corporate leadership as to the value in social media marketing, 18% finding it too hard to measure the ROI, and another 50% struggling with prioritizing the time and budget for social efforts.
Frugalnomics is in full effect, with corporate leaders scrutinizing any and all significant investments, and requiring more financial diligence from marketers. As social media marketing spending continues significant growth into 2012, and as executives begin to demand that this new channel prove worthy of the allocations, ROI proof points become more important. Marketers understand that they need to move from Mad Men to Math Men, requiring fluency inthe language of frugal executives in order to secure required campaign budget allocations and justify increases.
Although digital marketing performance is easier to measure, and more monitoring tools are available, marketers continue to struggle with advancing beyond basic activity measures, with the majority continuing to indicate that their measures are not effective / less than effective. As a result, ROI remains the number one challenge for marketers to address into 2012.
Source: 2011 Chief Marketer Social Marketing Survey http://chiefmarketer.com/social/social-marketing-survey-overview-1001bq7/
Tom Pisello, The ROI Guy, and Chairman and Founder of Akonna, has been developing measurement software for ROI and economic justification for the past 20 years. Tom’s newest creation, Akonna, is an emerging Saas provider for measuring, proving and improving the ROI of marketing campaigns and social media efforts. For more information about Akonna, please visit www.akonna.com.VN:R_U [1.9.7_1111]ROI Pain: What Still Ails Social Marketers Into 2012,
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