It used to be people talked about your business verbally. In a physical space. Around someone’s kitchen table or at the water cooler or the downtown coffee shop. Today, word of mouth is more like word of …. word. We’re putting down in words, in a social media format, what we used to convey verbally.
But as it is difficult to measure the effect of word of mouth and how well it helps one’s business, it’s also difficult to value the worth of social media. Are those Facebook page “likes” translating into sales?
Phil Mershon’s article on Social Media Examiner discusses the plight of marketing professionals in having to prove the value of social media for business. While some are struggling to accurately measure the return on investment (ROI) of social media marketing, it is very possible to track your results.
In his top five social media marketing trends, Mershon lists as the first on the rise of social media marketing and its boon to business. In a survey of 700 marketers from all over the globe, he notes, “Wildfire App discovered that nearly all marketers find value from social media and that 75 percent of marketers plan to increase their social media spending in 2012.”
The top two benefits highlighted by these marketers, Mershon continues, “are increased brand awareness and the ability to engage in dialogue directly with their customers.”
That’s a huge deal. Social media has torn down the wall between businesses who may have a presence in your town but whose direct link between you and the right spokesperson was nonetheless vague. It has enabled people to post complaints and conversations directly to the page of the company of their choice – most importantly – at their convenience: at their home computer.
Wildfire App also found that social media brought increased sales and reduced spending. And according to an Ad-ology 2012 Marketing Forecast, only 10 percent of small businesses surveyed said they would not use social media marketing in 2012, down from 24 percent in 2011 and 39 percent in 2010.
In the top 2 marketing trends spot, Mershon reports that more businesses are investing in social media. He cites a report from Borrell Associates, which found that small- and medium-sized businesses (SMB) will double their social media advertising budget in 2012. That’s up to an estimated $2 billion in the U.S. alone. Borrell also found that social media marketing ranks third in online advertising spending.
No. 3 is measuring ROI, a top challenge. How exactly do you do it? This becomes easy if the right goals are set in the very beginning. One way to track the ROI of Social Media is through the REO (Return on Engagement). The return you get on every post and update leads to ROI. While we agree it’s no flip the switch and see ROI, nor is it like running a coupon and seeing the direct return, the return with Social Media is a long term effect.
At No. 4 is the varied ways in which the value of social media marketing is viewed – no surprise here: social media helps search results for many businesses, but the largest majority of companies benefit from posting content on their company blog, Mershon reports.
No. 5 is research from Insites Consulting that an integrated social media plan leads to greater financial results. “The key observation made by Insites is that firms that have integrated social media into their regular business operations and marketing efforts are seeing significantly greater financial results than those that have not,” Mershon says.
Some key questions marketers should ask: Have you moved past the experimentation stage with social media marketing? What value are you seeing from advertising? Do you have a thoughtful measurement system in place for your business? If not, Mershon suggests a few resources, such as a series of white papers from HootSuite on measuring social media ROI; an article Nichole Kelly wrote for Social Media Examiner on 8 metrics your business should consider and a review of Altimeter’s measurement framework that Mershon wrote.
We suggest tracking all of your social media. Some traditional methods can be used for tracking your social media like landing pages and phone numbers special to your social media. Tracking tools are available to measure the amount of sales from click on your social networks to a link.
We feel the most important way to track social media is to build a base of loyal fans and followers who will become your advertising agents and share your businesses products or services with their friends who will buy based on the “referral” they received from their “friend”. This is the REAL POWER of social media marketing.