How do you measure your online marketing performance? What are your goals, your KPIs and how do you measure ROI? These are pretty common questions in the world of social media marketing.
As companies evolve their people, process and technology to attract, engage and inspire customers through content, I think attention on a broader view of the value that is created warrants consideration.
Many companies that approach my agency ask about the ROI of specific tactics as if they are gambling money with a direct rate of return. If there are agencies contributing to that perspective amongst clients side marketers, I wish they would stop. It’s not helping anyone. Here’s why:
The underpinning of marketing is centered around presenting something of value to customers who hopefully exchange money for it. Many marketers use the notion of ROI to characterize the effect of their marketing investment. Of course it makes sense to understand what the return is on where you’re spending money. But I think traditional models of ROI (input – output) can miss the point of how much impact integrated search, social and content marketing can have on the overall customer relationship. Besides ROI, there are other cumulative effects that can amplify the effect of optimized online marketing efforts that are worth measuring.
Today’s digitally savvy customers are empowered to publish and prone to share their experiences with brands, friends and broader social networks. Consumer expectations of brands are evolving into participatory exchanges with multiple threads of dialog. What consumers want from socially savvy brands is not just about getting free coupons or unique content any more.
The brand / customer relationship is not just about marketing presenting offers to target customers. Brand points of contact are not limited to designated personnel in sales, customer service, media relations or recruiting. Socially empowered businesses are connecting with social savvy customers in a matrix of connections. The growth of social business means entire organizations are becoming empowered to communicate and advocate on behalf of the brand. What’s the ROI on that?
Value of Exchange – The relationship between consumers and the brands they buy from involves more than just a single transaction or a subscription. Every touchpoint between a company and a customer is an opportunity to advance or decline the relationship. Businesses have come a long way in doing that for specific departments such as marketing, PR, sales and customer service. But with the advent of social business and social media empowerment across the organization, the threads of dialog between employees and customers becomes diverse very quickly.
How to manage that? You don’t. Not entirely at least. You inspire it with leadership and a vision for what your brand stands for and what kind of relationship you want with customers, employees, partners, the media and public.
Maybe you’ve observed or worked with companies that have singularly emphasized ROI in every marketing tactic employed without seeing the bigger picture of investing in the broader brand and customer relationship. Viewing industry relationship building as speculative and with uncertain financial ROI can cost a business substantially in the form of positive brand connections with customers, influencers and media. There’s a sort of equity of relationship that serves as an outcome of meaningful industry participation and leadership that many companies don’t bother with because it doesn’t answer short term ROI questions.
When a competitor makes those investments, the neck and neck competition normally experienced can give way to the competitor pulling away because of the amplification effect on their marketing efforts that continued and consistent investments in network development, relationship building and goodwill have achieved – all without certain or short term ROI.
Is your company making marketing investments solely based on immediate ROI? Are you also making investments in resources and relationships as a thought leader and building your network beyond prospects, investors and industry journalists? How are you measuring the value of exchange between your employees and the public?
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About Lee Odden
Right on with your comments. Inspiring with leadership and vision are the ways to an enlightened brand. We discussed this in a recent blog post and think it is the wave of the future. Read more here http://t.co/bmmUJJGJ
I think it is important that this article is talking about short-term ROI. Not every tactic that is implemented in the overall marketing strategy will have a direct, immediate ROI, but the overall strategy will. It’s the same as running an offline campaign to improve your businesses reputation. One tactic may be to train your staff to be friendlier to customers during face-to-face interactions. This may not lead to an immediate sale, but long-term your customers will want to return to your business because they had a pleasant shopping experience. The same applies to social media. Just because every person who engages with you on Facebook doesn’t immediately buy something doesn’t mean your efforts were wasted.
Building relationships online takes time, and many companies don’t want to wait for that. Many still suffer from the “magic bullet” syndrome hoping social media will solve all their marketing problems. Throwing a bunch of tactics against the wall and seeing what sticks is not going to produce an ROI. Developing a marketing strategy that utilizes various tactics to achieve an overall goal will. Don’t abandon the idea of social media ROI; just understand that not every tactic will have an immediate ROI. Sometimes you have to go back to the basics. Don’t forget the difference between strategy and tactics. One will always lead a measurable ROI, the other might not. It’s up to you to know the difference.
I totally agree with Shaun. Too many businesses are too short sighted when it comes to marketing and branding.
The way the world interacts has changed massively in the last few years largely as a result of social media and companies need to adapt to this change.
Interaction is now a massive part of doing business and building relationships and social media makes this more possible than ever. I would go as far to say that social media is the best way to build a brand for many businesses. Social media allows a business to interact with it’s customers and prospects to build important relationships that provide an ROI over a long period of time.
So many good points in this article!
Mark
Sure, ignoring ROI is a great way to justify the high costs of social media development. Yet the tools now exist to quantify social media results, hold social media developers accountable, and bring a defined ROI to the social media process. Companies do not have unlimited marketing budgets and savvy managers are going to invest where they see the greatest return – this includes branding initiatives. This is exactly why they still buy super bowl commercials at $1 mil a pop – instead of placing that $1 mil ad spend into social media development. The branding ROI on a super bowl ad is so much greater than the same dollars spent on social.
Now don’t get me wrong, I like social media and it needs to be a big part of the portofio. But I see clients pouring all their resources into social while yielding little in terms of $$$. If they were to place those same resources into paid media or in conjunction with their social media, the yield would be immediate and apparent.
Rkaiser To make sure I understand you correctly. You’re equating the need to value and measure long term benefits of social networking and engagement with ignoring ROI? Sorry my friend, but you’ve clearly missed the point. There’s a HUGE difference between overspending on social media and spending that is accountable. Focusing ONLY on short term return for social media marketing and network development has many companies in a position of disadvantage. Accounting for the long term value obviously adds to existing ROI measurement.
Hi Alex, I’m not saying companies need to back away from short term ROI measures, I’m saying they need to add measures to appreciate the value long term of social engagement.
There are many, many KPIs worth tracking. You have to. It would be silly to invest in social network development and wait 3, 6 or more until “seeing a return”. It’s not a mutually exclusive situation – just to clarify. I do agree with you that those short term measures are important – as are longer term equity, good will and the elevation of brand perception.
Thanks for suggesting the frequency measure. “Staying power” is important in the social space as it is anywhere else a brand is communicating with customers Great point.
Jason, I’m blogging based on my experience as a consultant in the search marketing field. 14 years plus and working with many, many companies ranging from 100m to 100bn in revenue.
Seeing trends is part of how we adapt to changes in the industry and keep our clients ahead of the competition. This is not theory – I see it in the data of our consulting practice. However, research is a good point and we have projects under way and we’ll be publishing those here and also at OptimizeBook.com
We have clients who are integrating search, social and content marketing and their program results are substantially better than stand alone SEO programs. Same goes for clients that have focused ONLY on short term ROI measurements of individual social media promotion tactics without building relationships – same story.
I’ve been reluctant about sharing specific client case studies on this blog vs. our company website, as it can come across as self-promotional. But this is my blog for my company after all, why not?
Feel free to be skeptical and take that approach. If you don’t see the connection that’s entirely your prerogative. I, and many of my peers see things a bit differently.
It is important to make the ROI the bottom line of all businesses to make a profit, especially with more online marketing on social sites. Companies that don’t engage their customers to build a relationship will struggle to develop good SEO. The trends in internet marketing are heading more toward personal interaction and service, which is good news for smaller or local businesses.