Microsoft Advertising and Advertiser Perceptions surveyed social media marketers in six countries around the world and found that 74% of them thought it was very important to have a presence on Facebook. The challenge is that many of these same marketers do not feel that the return on investment (ROI) is clearly measurable. This is where I have to disagree with them and feel that they are looking far too deep into developing a mathematical or statistical equation. It starts with the upfront assumptions and metrics you need to set prior to engaging in social media. Understanding why you are engaging in social media will allow you to set your metrics. If I am a B2C business, looking for aggressive growth, and I know that every 1 out of 10 people purchase from me I can build some metrics. If I understand the average sale per customer then I can take my estimated costs and determine what I need to see in sales. While social media does not drive sales directly, it does create them by creating new relationships. For example if I know the average sale is $100, my cost for social media marketing is $1,000 then I need 10 sales. To get ten sales, I will need to increase my new followers by 100 people. Now I factor in my level of growth and I have set some metrics on how many followers I need. This does not even measure customer loyalty, recurring revenue, or any other incremental volume driven by maintaining the relationship. While it may seem difficult to measure, it is more about being comfortable with your assumptions and understanding your business.
Archive for October, 2011
Everyone is asking me the question – should or shouldn’t I be using advertising on Facebook, LinkedIn, Google, or any of the other pay-per-click options. First you have to ask yourself the question – is it the right strategy based on my business objectives? Do you want to drive immediate lead generation? Do you have the budget? Are you wiling to change and adjust based on analytical information? If you answered yes, then you should look into these opportunities. With the continuing growth in Social Media it is an excellent way to increase your sales leads and growth in revenue.
The simple answer – yes! Growth in Social Media advertising has been growing from a low of 20% in 2009 to a high of 55.6% in 2011. The growth for 2012 and 2013 is expected to be from 45% in 2012 to 24% in 2013. These figures show a strong growth for over the past 5 years, reflecting a new and diverse way to go to market. eMarketer is reporting that expected on-line advertising in social media will be approximately $5.5 billion for 2011, a strong growth from the $2.4 Billion in 2009. This continued growth is a direct reflection of the success businesses are seeing through on-line marketing strategies. Digital marketing is continuing to grow and businesses need to determine if this is a growth engine for them. With projections of $10 Billion by 2013, it is apparent that Facebook, LinkedIn, and Twitter are going to continue to grow in popularity. Are you ready?