Social Media has only one constant – and that is change, according to conclusions in eMarketer’s recent The Future of Social Media Marketing.
There is a lot of talk about the value of social media, but as regulars readers will know I am something of a skeptic.
Social media is one of the best metric’d vehicles for advertising and marketing to come along in years, yet when its proponents are asked for a rationality for it in economic terms, the arguments I hear liken social media adoption to that of the PC and initial forays on the web.
This turns off traditional media buyers who are looking for something more tangible.
The Shearwater Blog had an interesting post recently about Twitter, citing the study done RJ Metrics which combines a number of analytic tools together.
It confirms the position that despite the huge buzz around Twitter, adoption is somewhat sporadic and its usage is decidedly inconsistent.
The web can be an unforgiving place when you venture into un-prepared. Even established brands can get trashed quickly by the mood of the crowd.
However, the mood of the crowd moves on but everything stays forever on the web. And the crowd does tend to report bad things rather than good things.
How many tweets have gone out about “how great is someone’s Prius” vs, say, “it’s the brake system or the cruise control”?
The process of social media is not a dark art where there are specific experts. Common sense in the main will carry the day. However when it comes to optimizing your delivery mechanism then do seek help. Just don’t confuse the delivery with the message.
The use of social media has to be a clearly thought out process. I don’t buy that just because everyone is there that you need to be making noise as well.
Lemming behavior never benefits anyone (just as the airlines). I do agree with many of my fellow TNoozers that you cannot avoid it. However attempting to control it… well, that’s akin to putting fingers in the dyke.
So here is my advice on the subject. If you are expecting to get ROI from social media… it doesn’t happen.
Once you are involved – you have to stay involved. Focus your attention on providing value. And remember that the crowd is not collective wisdom.
Anyone who relies on the wisdom of the crowd will be brought down by it.
About Timothy O'Neil-Dunne
No ROI on social media? Timothoy – you are joking. There have been numerous examples of trackable sales ROI for companies who have bothered to launch a social media strategy, and have the tools in place to measure the results. The key is that travel companies need to take a look at the results documented by leading brands who do take social media strategy more seriously, and see how they can use this channel to increase business. In addition to the 15+ examples cited below, take a look at Kodak, Southwest Airlines, JetBlue, The Roger Smith Hotel (NYC) and Pleasant Holidays presence on Facebook and/or Twitter. They all point to significant ROI benefits – including the time spent to support their ongoing efforts.
Below is an article which is a textual representation of “Social Media ROI: Socialnomics” by Socialnomics.
Think about this. More than 300,000 businesses currently have a presence on Facebook.
Gary Vaynerchuk grew his wine business from $4 million to $350 million using social media. Vaynerchuk found that he could accrue 200 new customers through a $15,000 direct mail campaign, 300 new customers through a $7500 billboard ad, but yet he could spread his word for $0 to 1800 new customers through social media.
Companies that are engaged in social media surpass their peers in both revenue and profit.
Social media is not just about making more money; it is also about saving money. As an example, Lenovo reduced its call center activity by 20% when customers began using the social features of their community web site.
Burger King ran a promotion through Facebook which became viral and was ultimately shut down for various reasons. However, the campaign cost them less than $50,000. Their return on the investment was estimated to be more than $400,000 in press and media value. Media impressions were more than 30 million; more than the combined population of 19 states.
Blendtec ran a video campaign called “Will it Blend” where they attempted to blend various, every day objects in their food blender product. The videos became popular, and sales of their device quintupled.
Dell has a Twitter account. Using the service, they have sold more than $3,000,000 worth of computers.
Traditional advertising outlets do not produce near the same results that social media can produce. Only 18% of traditional TV campaigns generate a positive ROI.
For social media to work, strategy is important. Simply being on social media is not enough. “You can’t just say it. You have to get the people to say it to each other,” James Farley, CMO Ford. 37% of Generation Y was aware of the Ford Fiesta through social media before the car was even launched in the United States.
Ever heard of Scott Monty? 25% of Ford’s marketing spend is on digital and social media. They are the only US auto company that did not take a government loan. Volkswagen launched the GTI through a campaign that was 100% mobile.
Naked Pizza set a single day sales record by using social media. 68% of the sales and 85% of new customers came from Twitter.
The companies that I have mentioned have all been B2C companies. Is social media effective for B2B companies too? Absolutely.
Tweets for a Cause utilized Twitter to encourage support of the Susan G. Komen for the Cure initiative. Their message was retweeted; a lot. Retweets from @mashable, @G_man, @zaibatsu, and others caused the Atlanta chapter to receive 11,000 site visitors in 24 hours.
Intuit introduced their “Live Community” into Turbo Tax products two years ago. Since then, unit sales have increased 30% each year.
Genius.com is a software company. Their reports have shown that 24% of their leads from social media convert to sales opportunities.
This one is a big one. Social media helped put the president into office. Barack Obama has more than 5 million fans on social media. 5.4 million people clicked on an “I Voted for Obama” Facebook button. 3 million people donated to Obama online; more than $500 million. The donations were not big donations. Every bit counted. 92% of donations were in amounts of less than $100.
The University of Texas MD Anderson Cancer Center had a 9.5% increase in registrations using social media.
Did you ever see the hashtag #moonfruit on Twitter? Moonfruit is a web hosting provider. They invested $15 in social media. Their web site traffic increased 300%. Sales increased 20%. They received a higher search rank. They landed on Google’s first page for the search term “free website builder.”
A study by eBay found that participants of online communities spend 54% more money online. With social media, they save money on customer support costs. In their customer contact center, they would spend $12 for every $.25 spent via social media self service.
Of course all these numbers from each of the case studies will make you think more about social media. But, social media is not a traditional media channel, so why are we trying to measure it as such? “Social media touches every facet of business and is more an extension of good business ethics,” said Erik Qualman (@equalman).
“You can’t buy attention anymore. Having a huge budget doesn’t mean anything in social media. The old media paradigm was ‘pay to play.’ Now you get back what you authentically put in. You’ve got to be willing to play to play,” said Alex Bogusky, Co-Chairman, CP&B.
So, how do you respond to questions asking you about why social media is good for ROI, or how social media will make money? Another quote from Erik Qualman is, “When I’m asked about the ROI of social media, sometimes an appropriate response is ‘What’s the ROI of your phone?’”
Morgan Johnston of Jet Blue Airways said, “Think of Twitter as the canary in the coal mine.”
71% of businesses plan to increase their social media budgets by an average of 40% because it is low-cost marketing, it will help the business to gain traction, and most importantly, they have to do it to be competitive. If they aren’t doing it, their competition is.
Now, I really like Tnooz, and I did read this post with interest, but sorry, I’m not sure it belongs here.
There are hundreds and thousands of posts out there questioning social media ROI, and I’ve read a few of them. They’re normally on blogs specifically about social media, like Mashable or its thousands of wannabes, or like the emarketers post linked to here, or the econsultancy blog.
But this is a site about travel tech, right? So presumably if you’re going to cover the subject of social media ROI you should cover it from a travel angle? I don’t really see one here… There are a couple of references to airlines, and I know the Shearwater blog is about innovation for airline’s direct sales methods, but basically this is another piece about social media ROI on a grand scale.
I’d love to read a piece on social media ROI specifically for the travel/tourism industry. Could we have one please?
Incidentally, it always surprises me when people talk about the disappointing/sporadic uptake of Twitter without mentioning the 1 9 90 rule. Just because people aren’t Tweeting doesn’t mean they’re not using the site…
There are thousands of articles addressing social media and its effectiveness in terms of ROI and other measurements. Then there are thousands by those who question the validity of it all and I guess many will remain skeptics for a long time to come.
And yes, I think the article does belong here. Susan mentions a number of travel industry specific efforts that make a strong case for social web marketing. During the coming months there will undoubtedly be more to come.
For anyone interested to follow the topic, there are a number of groups on LinkedIn with active participation by both the yeah and nay groups.
One thing seems clear to me, as the web continues to evolve it will become more social and there will be new tools allowing us to interact, deal with and navigate the social web and the content stream that is produced by its rapidly expanding number of participants. Companies will have to engage in the constant conversation whether they like it or not and whether they will derive instant ROI or not. To stand on the sideline is just not an option if they want to prosper going forward.
Timothy,
with all do respect, I must agree with previous respondents. I know this video http://bit.ly/9W5CM9
has been chased around the Internet, but obviously the point has not come across. Social media is here to stay- either you get engaged with your consumers where they are having conversations, or you stay in your cave, alternatively continuing the megaphone push tactics.
Social media is primarily measured through ROE- return on engagement. And boy can you get people to engage with you if you have something interesting to say/do. They might even buy from you if they like you –> that’s the beauty of social media, it’s about transparency. Enough faking- if your product/company is crap people will talk about it. More pressure to live up to, win-win situation I call it.
My 2 cents. Over and out.