Assessing the Non-Financial Benefits of Social Media Investment
On Thursday I’m speaking at Digital Content Monetization Europe on a topic that regularly dumbfounds marketers: social media monetisation. My research for the presentation took me down three possible benefits of social media when it comes to Return on Investment:
- Making Money – Conversions and advertising
- Non-Financial Impacts – Traffic increases, acquiring more followers/Likes etc
- Cost Saving –Savings on media spend, business process and customer service
This is perhaps better explained in the below graphic:
Making money and cost saving via social media justify their own posts (perhaps even their own books), but for the State of Search audience I thought I’d share my findings around the non-financial impacts of social media, particularly their benefits within SEO and traffic referral strategy. They’re essential benefits to put into any social media investment case, and you may be able to use them for other areas of digital marketing.
What’s the ROI of Putting Your Pants On?
I recently came across a great quote for summing up the social media ROI quandary. It seems to neatly explain that because the majority of people are on social media and talking either amongst themselves or sometimes about you, you better be there, or else:
So what’s the real ROI on Twitter feeds like the below, by ASOS, which is purely for customer service? Clearly from people’s comments it’s a feed that solves customer problems, and those customers are happy about it. It means those customers probably would buy again, but the ROI is not completely tangible:
Social Media Return on Investment: Recommend Reading
These are two of the best books I’ve come across for ironing out the quandary. Groundswell is great in explaining the earned media value of social media, and creating communities that give you round the clock feedback. Olivier Blanchard’s Social Media ROI has got to be the most practical book on social media strategy currently available. If you’re planning to up your game this year, read that one.
Avoiding Marketing ‘Campaigns’
One of the most interesting points in Social Media ROI is that with social media, we need to get away from the notion of ‘campaigns’. I worked at SEGA, the games company, for a year, and the brand marketing department always had a campaign for the release of a game. Release a new product and market it at release. Spend money upon game release, get more sales. But then you don’t spend any more money.
What this method fails to take into account, of course, is that many products continue to sustain interest well after release. Community management became important when this interest was sustained. So for a game like Football Manager, you’d have a release and marketing push, but then a sustained period of community management, which meant stronger bonds were built with customers and they were more likely to buy next season. In this model, you acquire more and more customers over time, rather than gaining sales in short bursts.
Earned Media Value
What we’re getting at here of course is ‘earned media value’. By creating platforms and profiles that people will engage with, you can retain the right to market to those people. One of the most interesting Facebook accounts for me is Skittles – capped with incredibly zany updates and plenty of fan contests. What would be the cost of reaching 24m people in broadcast media? You can work out some ROI right there. I’ve written a slightly longer post on this topic: Ten Steps to Prove ROI on Social Media Spend vs. Traditional Media Spend.
The Real Value of Referral Traffic
Of course, most companies publish on social to drive to a destination website. Below we have ASOS posting products to Google+, The Guardian tweeting some links, and Grazia promoting a guide on Facebook.
My last post on State of Search Assigning Real Value & Tracking Every Click with Google Analytics goes into some depth about how to track conversions and events on a website to understand the value of traffic sources.
You need to get your e-commerce and goal tracking up and running for at least two weeks before you can see which sources are driving revenue. Once done, you can segment social traffic and review which sources are best converting in revenue terms. I consider this essential knowledge, since not doing it will be simply creaming pushing to your site without properly understanding its value. You also won’t really understand which traffic sources are most valuable for you and thus what you should invest further in.
But Social Media Drives All Traffic Sources!
We all consider social media as a referral traffic source, but in my first conference talk at Brighton SEO, I touched on how important social’s role could be in driving all traffic sources – including SEO. I see this as a three step process:
- You have a social media account, for which you grow following via advertising, competitions and engagement.
- You then have a larger social media account (probably 10,000+ Followers/Likes) – this means you can meaningfully interact with followers/fans to gain useful information, such as through polling. With this in mind, you can capture this data and publish it on a destination site.
- You then continue to grow it to an even larger social media account (50,000+ Followers/Likes). From here, you can send significant referral traffic to a destination traffic. But you will also probably be sending more direct traffic to your website. Finally, you can leverage this new found social media equity by teaming up with third parties. From your account, send them bursts of traffic via link sharing in exchange for them building links to your site.
Thus social media can drive referrals, direct and search traffic, along with being able to inform your content.
Conclusion: The Social Media Investment Return Relationship
When asking for investment in social media, it’s imperative that we do not forget the ‘middle ground’ of benefits that do not directly cause a financial return. The diagram below, taken from Social Media ROI displays the way we can consider the Social Media investment return relationship. There are three clear steps before any financial impact. Much like in search, investment in social strategy will take you some time in seeing a return, but brings a number of benefits outside the immediately obvious.
This post is best suited for in-house marketers and social media teams aiming for extra investment during 2013.