The youth of the social media makes it hard to determine ROI, although it doesn't temper brand eagerness
It's hard to discuss marketing nowadays without hearing about social media. Whether it's traditional social networks such as Facebook or mobile services like foursquare, Canadian small business owners are flocking en masse to social media to manage their brands, sell products and engage consumers.
Oddly enough, the majority of enterprises intend to spend more on social media over the next 12 months, despite the fact that many of them are unsure whether or not the channel is providing them with any sort of return on investment, a new report from the World Federation of Advertisers and Milward Brown indicates.
The challenge of determining ROI
Less than one-quarter of respondents (23 percent) were convinced that they were actually driving a good return on their social media investments. Conversely, 27 percent of companies believe they are getting an average or poor ROI, while the remainder of the respondents has no idea how to determine their returns.
For many businesses, it's the relative youth of social media that prevents them from establishing accurate metrics. Additionally, many view social media as a long-term advertising initiative - it takes time to develop a relationship with consumers, which wouldn't manifest itself in immediate conversions.
"Quite a few clients appear to want an immediate reaction," Nick Oran, managing director of Total Media, told Advertising Age, "but it doesn't work like that. It takes a while to develop relationships and then to see a return. Brands know it's a huge channel where people spend a lot of time, and logically their marketing money should be there, but it can be scary to approach it with a long term view."
Maximizing social media results
That said, the WFA's report did offer a few basic guidelines to maximise ROI for organisations looking to implement social media into their small business marketing campaigns.
First and foremost, brands need to engage users through contests and giveaways. Numerous studies have shown that incentives are the primary reasons that many customers opt to follow a brand on social networks. Depending on the industry in which a company serves, discounts, promotional products and free advice are all great ways to bolster a brand's social presence.
Staying active is also integral. Social media initiatives are not simple one-off campaigns, where companies can go silent after the launch of the product or service they are announcing. This will make consumers feel alienated and used. "The report warns that marketers should 'beware the campaign mentality' pages that are active and then suddenly go quiet can have a detrimental effect on a brand's reputation," notes Advertising Age. Companies can avoid this by simply posting daily updates and content.
"If you build up a community - and social media is all about community - of people who have taken the trouble to show an interest in you and then you ignore them, of course your brand perception is going to be damaged," Oran added.
Still, it is never wise to bet the farm on any single marketing channel. Brands should do the best they can with social media, installing community moderators and measurement tools as necessary, but they also need to continue to leverage other platforms. Depending on the audience the company is trying to reach, email and search marketing can be just as, if not more, effective than social media.
