• Social Media ROI is the Greatest Challenge

    Post the Great Recession, marketers are being met with new levels of executive scrutiny and financial accountability, challenging the ability to get their fair share of the budget, and implement new and innovative programs. The scrutiny is formalized for many organizations, with 33% of chief financial officers (CFOs) indicating that over the past 18 months they have assumed formal responsibility for marketing groups and spending (Accenture – 2010).

    Marketers, who historically have been more creative, focused on the “Art”, are being challenged by measurement edicts, return on investment (ROI) requirements, and the “Science” of marketing.

    New areas like social media and digital marketing, where accountability is a requirement, but measurement and ROI proof points are new and not always available, represent a stumbling block to future success.

    This is evidenced in IDC’s 2011 Tech Marketing Barometer Study, where marketers were asked about the single greatest challenge for increasing proficiency with digital and social media execution, indicating Measurement and ROI as the majority critical missing success factor.

    Source: IDC’s 2011 Tech Marketing Barometer Study (N = 45)

    When asked to indicate the measurements used to prove the ROI of social media, the challenges are evident, with the majority using usage statistics to prove ROI, versus true financial measurements / bottom-line impacts that financial types often require to prove value and to prioritize additional funding.

    Activity based metrics are the most popular way to measure value including tallying traffic, number of positive and negative, comments, and number of registered participants, but don’t directly prove a return on investment.

    The good news is that the majority, 52% also indicating measuring the revenue impact of social media initiatives, as well as retention and referral impacts, which will help prove the ROI to economic-focused executives.

    The Bottom Line

    Recent economic pressures have led to more executive scrutiny and financial accountability on spending requests, and marketing is no exception. Marketers are being challenged more to measure success and prove the return on marketing investments, especially for new growth areas including digital and social media.

    Being able to adequately deliver measurement metrics and ROI is seen as one of the major challenges to future marketing success, implementing “science” of marketing to accompany successful “art” of connecting and engaging with buyers. Those that can sooner measure success and prove the value of marketing will assure their fair share of corporate spend, and help the organization better optimize return on investments, particularly for new marketing initiatives.

    Additional research and interactive tools to measure and prove social media ROI can be found at: http://www.alinean.com/socialmediaroi.aspx

    Source:  IDC Webinar: Digital Content Matchmaking: Address Changing Buyer Needs or Risk a Bad First Date: http://w.on24.com/r.htm?e=296555&s=1&k=B50E2F94F3DF611DF04AB37F12B4C7E1

    Tom Pisello founded Alinean Inc. in 2001 where he coined the term, “Frugalnomics.”  You can read his daily blog at Tom Pisello: The ROI Guy.

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