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CMO/Marketing Strategy • Demand Generation • Social Media Marketing
Accountability demands have increased on marketers, as continued economic pressures have resulted in C-level executives demanding quantifiable proof that investments are yielding tangible returns– a condition called Frugalnomics.
Although social media represents a relatively new channel, marketing spending on it has reached critical mass, and the free pass is over.
According to research from Bazaarvoice and the CMO Club, two years ago is when marketers indicated a significant shift in their social marketing strategy:
- Fully embracing the importance of the medium,
- Recognizing that accountability would be required as investments grew
- Struggling to tie social media investments to bottom-line impacts
The predominant success measures in 2009 used traditional activity metrics, such as the number of number of fans or followers, and website traffic rather than evaluating business metrics like conversions and revenues.
As social marketing budgets continued their rise into 2010, marketers were under even more pressure to prove the tangible returns for all the social efforts. Going into the year, CMOs were optimistic about tying social to a percentage of their company revenue — with 80% reporting that they expected to do so. However, standard ROI metrics proved difficult to measure for many social efforts, with only 40% of CMOs in 2010 actually being able to tie company revenue back to their social efforts.
Traditional financial success measures proved troublesome in 2010, with marketing executives reporting that they had trouble tying social marketing efforts to conversion and sales metrics, determining the right metrics and how to track them, getting CEO buy-in on metrics, finding the resources to focus on measurement, and implementing such measurements globally.
Despite the quantification issues, marketers know that accountability is essential to drive C-suite credibility and maintaining critical budget allocations.
Into 2011, CMOs know there is a gap between the activity measures currently being used to prove social media success, and what executives expect. To close the gap, almost three out of four CMOs aspire to tie social media to sales conversions and revenue to prove ROI success.
A few questions as marketers race to prove accountability on this critical marketing channel:
- Is driving revenue the most important financial metric to tally in order to prove social marketing success?
- Is traditional ROI even valid?
- What about the improvement in marketing efficiency, increases in brand equity, value of risk mitigation, and value of collaborative innovation and the insights customers share with brands?
The Bottom Line
As companies continue to increase social marketing spending, accountability becomes more critical. Marketers are realizing the need to tie social media investments to success factors that are important to senior executives – like sales conversions and revenue. However, the efforts to tally the revenue impacts have progressed, but fallen short of aspirations as the measurements prove difficult.
As well, many are realizing that sales conversions and revenue, although a good start at tangible financial measures, may not capture the true value of social efforts.
We eagerly await the next survey results to see how social marketing ROI accountability measures continue to progress and evolve.
CMOs on Social Marketing Plans for 2011. What’s the real value of the customer voice? Published by Bazaarvoice & the CMO Club
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 visitwww.akonna.com.VN:R_U [1.9.7_1111]Social Media "Free Pass" Ends as CMOs Increasingly Require ROI,
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