6 years ago

Five golden rules of social media ROI in the travel industry

NB: This is a guest article by Marco Saio, director of global research and projects at EyeforTravel.

Facebook page? Check! Twitter account and dedicated hastags? Check! Competitions, discounts and giveaways? Check! Any real, measurable and abundant ROI from social media campaigns? Erm, guys?

A recent EyeforTravel survey of APAC travel brands shows that despite 67% claiming to have deployed social media initiatives, more than half admitted confusion or inability to effectively rack and measure ROI.

One respondent describes the ROI dilemma faced by travel marketers:

“For all its potential, social media keeps me up at night – it feels a little bit like jumping in at the deep-end without arm-bands and being expected to swim like Michael Phelps.”

With this in mind, I took three social media experts to task on how travel brands can move beyond deploying social media for “engagement” or to “raise awareness” and instead concretely generate incremental revenue and real ROI.

Each gave me five points to consider.

Josiah Mackenzie, director of business development at ReviewPro (and a Tnooz Node)

1. Identify where social media will save you money

Social technology can increase efficiency. Data from SimpliFlying indicates its seven times cheaper to serve a customer on Twitter than in a call centre.

Using social media and review analytics could also save you substantial amounts of money in customer surveys, business intelligence, and market research. Exposure from social campaigns could replace some of your investments in advertising and PR, saving money from budgets there as well.

2. Count inbound leads from social media

Many hotels are using social media listening tools to pick up on conversations with people looking to buy what they are selling. Dan Sherman made a $70,000 sale off a Facebook referral.

There are more sophisticated metrics related to sales – such as time to closing and average order size of a socially engaged customer – but begin with counting leads.

Hubspot research showed companies that blog generate 88% more inbound leads than those who do not blog.
What does this look like for your situation, and on other social networks? How is social activity affecting your lead volume?

3. Measure for sales conversion improvement

Social media – and online customer reviews in particular – play a key role in optimizing sales conversion rates.

PhoCusWright found that OTA shoppers who visit hotel review pages in OTAs are twice as likely to convert.

Jennifer Davies from Expedia had more specifics:

“On Expedia, good reviews of 4.0 or 5.0 generate more than double the conversion of a review of 1.0 – 2.9.”

Brian Ferguson, an EVP at Expedia, quantifying the ADR impact as well, adds:

“A 1 point increase in a review score equates to a 9% increase in average daily rate (ADR).”

So, measure the increase in revenue directly attributable from using social media in the sales process.

4. Track progress towards business KPIs and strategic objectives

Insights from the social web can play a key role in reaching strategic business goals such as improving guest satisfaction or increasing the percentage of direct bookings.

When you understand the financial impact of reaching larger business goals such as these, quantifying the contribution of social media towards reaching that goal becomes easier.

Luis del Olmo, EVP and CMO of Melia Hotels International, says:

“The online reputation of each of our brands is a key success indicator for us. Online reviews not only give us insights into our daily operations, they also directly influence our revenue and profitability.”

5. Measure campaigns

Driving email newsletter subscriptions? Need to increase the number of inbound links to your website for SEO purposes? Want to increase visitor time on your website?

Campaign or project-based ROI might ultimately be the best measure of return on investment. Especially if you compare the cost associated with reaching a goal with what it cost you in the past using other tactics.

Martin Soler at WIHP wrote a good article if you want to learn more about this.

Morris Sim, co-founder of Circos Brand Karma

1. Get your social business from Friends of Fans (FoFs)

There are a lot more of FoFs than fans, and your fans’ referral will mean a lot more than if you try to target them directly.

2. Pay attention to user-generated content (UGC)

Monitor what’s being said with text, photos, and videos. Know how your brand is being perceived in real-time as well as evergreen UGC.

3. Engage interactively

Content from meaningful conversation is king, and no one likes to be constantly reminded of offers and discounts.

Imagine if you’re conversing with your date and in every other sentence s/he tries to convince you to move in and help with rent. A big turn-off!

4. Have a plan for dealing with emergencies

These days, crisis could occur at any point even if you do everything perfectly. So it’s time to update the emergency response plan and take into account the many-to-many nature of social media.

Once the staff trained, make sure you do regular practice runs!

5. Develop a relationship with Gen Y and Zs

They are highly influential. More than half of the world is under 30 and they are the new movers and shakers.

Everywhere from Cairo to Wall Street they’re banding together to make their voices heard, and in some cases, overthrowing institutions.

Get to know them. They’re your future customers and staff.

Barbara Pezzi, director of analytics and search optimization at Fairmont Raffles Hotels International

1. Start with a goal in mind before you embark in any activity

If you do not know what it is that you are trying to achieve, it becomes very hard to measure how successful you have been.

The same applies to ROI. If your social media strategy does not have ROI in mind, it is very unlikely it is going to produce any.

Ultimately, not all social media activities will have an ROI or a financial outcome. However, it is important that all stakeholders agree if a financial gain is expected and if so, a relevant strategy put in place.

2. Without accurate benchmarking it is very difficult to establish correct ROI.

Take records of your key metrics before, during and after your social media campaign so that you can correctly establish the impact of your activities.

Keep a written schedule of all your activities on the various social sites for correlations and further analysis. It make historical analysis much easier.

3. Keep with the plan

Philosophical debate aside on whether social media should have an ROI or not, if you are required to report on it, stick to its financial definition and financial metrics.

Makes sure you take into account savings in your profit calculation but do not create or use intangible “made up” metrics like the ROI of a Facebook like or a twitter follower. It is a simple case of costs vs profits.

If the investment is in $, then so must be the outcome, not followers, likes or clicks.

4. Have a measurement strategy in place

It is almost next to impossible to accurately measure any activity if no tracking has been put in place in advance.

Ensure you social posts and links are tracked with campaign parameters, as you would do with your PPC campaign, familiarise yourself with the analytics tools provided by each social platform when available (ex: Facebook Insights), establish your Key Performance Indicators.

You are not measuring the activity, like how many followers did you gain this week or how many times you posted, but the outcome.

5. Accurate measurement takes time and discipline

Start by utilising tools freely available such as Google Analytics, before you start investing in a proprietary tool.

Set actual numeric targets against your goals, measure accordingly and act based on targets and results. Measurement is not the goal.

The goal is to derive actionable insights. If you do not have a solid analytics strategy in place, and the human resources to manage it, even the most expensive sophisticated tool will be next to useless.

NB: This is a guest article by Marco Saio, director of global research and projects at EyeforTravel.

NB2: Pezzi, Sim and Mackenzie will be presenting more social media insights at the upcoming EyeforTravel TDS Asia 2012 in Singapore this May 9 to 10.

NB3: Piggy bank, Hands and Target images via Shutterstock.

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About the Writer :: Viewpoints

A founding principle of tnooz was a diversity of viewpoints from across the spectrum. Viewpoints are articles by guest contributors from around the travel and hospitality industries. The views expressed are the views and opinions of the author and do not reflect or represent the views of his employer, tnooz, its writers, or partners.



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  1. Calvin

    Im not sure this is any more than thin link bait IMO agree that it just skirts the issues and problems with no clear solutions or methods for measuring this. This article itself and these comments just show me we are still not understanding how it works exactly. I didn’t find it very helpful in saying you need to do x y and z apart from the obvious.

    • Kevin May

      Kevin May


      Everyone entitled to a fair comment.

      And, presumably, blog posts titled…

      “Things To Do In Winter Or Summer In Australia” or…

      “Great Places to Get Dressed Up in Melbourne”…

      … would never be considered so-called link-baiting?

      I’m happy to share where I found the headlines 😉

  2. Fernando Rodríguez Merino

    It is actually quite common that new channels need to offer better rates in order to get clients. E-commerce web sites went through this process when they started, when buying online was considered risky to put your credit card in. It is happening again, I think that it is a matter of time

    Business consultant Booz & Co. predicted in January 2011 that physical goods sold through social commerce would balloon to $30 billion from $5 billion by 2015, with Facebook contributing a majority of sales.

    While it is true that today buyers prefer to close their buy on a common channel, social Media and channels like Facebook are playing a fundamental role during the entire selling process. Well integrated facebook apps would use the best customer information to create a complete social entity around each product or service.

    • Bruce Sweigert

      Again, attributing 100% of the revenue as “earnings” is why you can get such high numbers. To say I can get 1000% ROI on an SM investment, if I were American Airlines all I would have to do is come up with $1M and put it into twitter and Facebook campaigns and all of a sudden I’m profitable again. Would anybody believe this? If a travel agent or ad agency told you that they could get 1000% ROI would you believe it?

      Yes, SM is a very cost effective channel for both advertising, corporate comms and customer engagement. Where we tend to loose sense of reality in terms of ROI is when we look at it as something other than a new channel.

      True ROI should be measured against its effectiveness vs. other traditional channels in terms of cost, reach, response, yield, etc. net of any channel shift. The ability to target specific audiences and drive direct sales will no doubt have significant ROI, but it won’t’ be 1000%.

  3. Peter Syme

    Always remember that the ROI % will be significantly higher if you have a product/service that is suited to this means.

    I would argue that all products/services are but some are much more suited than others. If you are a hotel , you cannot be just be another hotel you have to have something special worth talking about if you are going to make decent ROI.

    In the last 2 weeks I have had over $70k worth of enquiries and over £10k of bookings via SM. ( different money signs due to location of enquires) Twitter alone is a regular revenue stream now , month in month out. Facebook less so, but still pays. Other niche online groups much better returns. Spend? my time and not a lot of it, zero cash spend. Last year I was on a expedition which recruited every member at $6.5k per time via SM.

    Now I am playing in the niches, so much more suited to this means, but on the other hand I am not especially adept at what I am doing so those with professional resource should do better if they have a product/service worth taking about. The only effect I am seeing over the last few years of playing and experimenting in this area is a reducing cost of client acquisition. Now under £0.50 a client. The one time I hired professional help for 6 months on a FT basis the numbers did not look nearly so good, but if we had scaled it would have worked.

    I really think it is very difficult for business owners to get their head round this because their is no system that has been designed that will work for all business. It is not like SEO where if you do the right things you will get results. This needs to be uniquely tailored for each business and I would argue by the business. It takes lots of trial and error to find what works, therefore, it does come down to how much you believe in this being a future sustainable revenue stream.

    • Robert Gilmour

      Peter, all interesting, you’re so right about differentiation and proper channel management, its amazing how many hotels don’t ‘get it’

  4. Morris Sim

    I tell my clients ROI should be measured in the traditional sense, which is,

    ($$ you get – $$ you spend) / $$ you spend.

    Why reinvent the wheel on this one? That doesn’t make sense, especially when FC is already measuring banner ads, PPC, OTA performance, etc. using that formula. The same tracking technology, either promo code, customer mentions, or a parameterized URL all can be used as ways to track actual conversion from social media. If you’re spending advertising $$s, I simply would not alter from this formula.

    It’s been our experience that social media advertising can return anywhere between 50% – 4000% ROI using this calculation. For comparison’s sake, depending on your OTA commission percentage, the ROI is almost always between 300% (for 25% commission) to 900% (for 10% commission) using the same formula (and with no additional advertising spent on the OTA). So as it relates to ROI from social, I don’t think the question is if it can be done but how to do it

    For those of you that aren’t doing social advertising but have someone on staff posting offers on your Facebook fan page — great. Use a % of that person’s salary, full burdened, as the base for $$ spend.

    For non-revenue generating things you do in social media, like monitoring your reputation, responding to customer inquiries, etc.. That’s just general cost of doing business. I don’t think the right measure of whether you should do this or not is ROI, just as you don’t use ROI as the justification to send guest satisfaction surveys or have a Guest Relations Manager in the hotel lobby.

    One final thing: attribution models is an interesting approach but I personally think there have been a lot things wrong with it. For example, a popular practice is to set the ‘time to decay’ on the cookie dropped to 30 days. This means that the first touchpoint from up to 30 days ago would get the credit for the sale — Wow! This attribution gives a lot of credit to SEM. However, if I do last session conversion on SEM campaigns, the ROI is abysmal; in the majority of cases you lose money on SEM campaigns. So I think that can’t be right either.

    Google Analytics Premium has provided some tools for you to customize your own attribution model so you can better credit all the customer touch points. But this is complex and requires expertise — which is lacking even today. Wrong attribution is worse than no attribution! So I think the attribution model, while interesting and probably the way to go eventually, isn’t yet practical enough to replace the simple ROI formula that someone very smart once figured out. It does a fine job of evaluating the efficacy of your investment in most cases.

    • Robert Gilmour

      Morris, are you able to share with us a social media campaign that got you an ROI of say 1000%?

      • Morris Sim

        Sure — here’s one example.

        2 years ago during the time of the Bangkok riots a client in Phuket was having difficulty with occupancy. I worked with them, a 5-star resort on the beach, by looking at its seasonal business during that time (it was low season), analyzing their social media perception (contemporary, good getaway for adults), and constructed a complimentary upgrade offer that we then advertised on Facebook.

        The advertisings targeted singles/couples pink, Eastern Europeans, and regional travelers. With $1,000 spent over about 4 days, the hotel received about $20,000 in booking specifically for this offer. Further, the on resort spend from these guests were an additional $0.75 for every $1 received in room revenue. It was the most profitable customers they had ever had.

        Since then, they have been able to successfully replicate the results using the same methodology we developed for the first campaign.

        The people we worked with have since moved on to open new hotels in the region with better pay. We all still keep in touch. Now that’s pretty good ROI for the individuals as well!

        In any case, if I were to use my ROI formula, the campaign delivered:

        ($20,000 – $1,000) / $1,000 which gave them a 1900% ROI.

        • Robert Gilmour

          Morris, very well done you.

          We need more success stories like this

        • Bruce Sweigert

          Morris: This is as good example as I’ve seen, but herein lies the danger of taking distressed inventory examples as case studies. In these case, ROI is assuming that any incremental revenue is 100% earnings. Since in your case, could have otherwise gone unsold, it makes a good case for using SM to clear out unsold rooms.

          I know this article is focused on hospitality, but from an airline perspective applying such ROI numbers would be problematic. Airlines continually suffer from yield dilution as customers purchase patterns have adapted to anticipate distressed pricing.

          For more steady-state examples, assumptions need to be made on channel shift (simply moving the sale from one channel to another), cost of goods sold and dilution from other offerings.

          • Robert Gilmour

            Bruce, great point, but this is not unique to social media is it?

          • Morris Sim

            Hi Bruce, I think you’re right in terms of taking yield management into account. I’ll just add a coda to complete the hotel story. In the case of the client, they ran a campaign for the holiday season (which is high season in Phuket as you know) and the ROI was best on the FB channel for them. They told me that they achieved even better ROI on that, which I wouldn’t be surprised given the higher room rates during the high season.

            This property does practice online parity, so it wasn’t a fenced-in offer. It was just that through the FB distribution channel they were able to get a greater yield because the business garnered was direct as opposed to going through commissionable 3rd parties. In fact, higher room rates meant higher commissions, whereas the cost of placing an FB ad remained relatively the same during that period; hence the room rate increase had no material impact on what they paid to advertise.

            If they can replicate the results, this would actually argue for them to sell distressed inventories on OTAs and go direct via Facebook advertising during the high season!

            Anyway, your point about airlines is interesting. Southwest, Jet Blue, and Air Asia all seem to be using social media to sell inventories all the time. Even a traditional carrier like Delta and Lufthansa are fairly active selling on social media.

            So there must be a reason why they’re doing this — it doesn’t appear to be just distressed inventories — although I would not know that for sure. Perhaps they’ve figured out how to allocate inventories through the various channels to optimize on yield and social is one of the channels that yields well?

            If they’ve figured this out, good for them! As Robert pointed out, this is really no different than what you’d do for general revenue management anyway. Social just became the nth channel that you’d consider in your channel mix — and if you do it right, it could be a higher yield channel than what’s available traditionally online. If you don’t do it right, you could end up disappointed.

            But then again, that’d be the same for any channel.

          • Robert Gilmour

            Guys, this has been a really useful and insightful discussion on a very critical topic

  5. Valyn Perini

    I agree with many here that attribution modeling is the way to prove channel value and ROI but, especially in the hotel industry, that function is in its infancy. Hotels still don’t truly understand the impact third party distributors have on their bottom line (the “billboard effect”), and social media metrics are even less financially quantifiable.

    As Barbara points out, attribute modeling is complex and expensive, but it may be the only true way to measure ROI for large-scale online campaigns.

    • Robert Gilmour

      Ok, all travel technology is expensive, and most of it is over sold, over hyped, you name it. travel shoppers and travel suppliers (e.g. hotels)are already way over-marketed and oversold to, largely technology driven.. Do they all really want all this (technology) – of course not. Its way too expensive a situation to be in, in an already far too cluttered market,with almost everyone and their granny other than the hotel and the customer coining in the benefits. For technology ‘creep’ – perhaps ‘race’ is a better description and its time it was stopped. PMS vendors are a classic case- selling rolls royces to hotels which only need minis.

      ANOTHER attribution model – heavens the mind boggles. Lets get back to basics, fast – no sorry, that’s impossible.

  6. TNOOZ: Social Media ROI | Brand Karma

    […] HERE for the online […]

  7. Barbara Pezzi

    I am a web analyst, and not a social media practitioner. As such, I think, a neutral voice in this whole debate.

    To Tony’s point, nothing can be measured with 100% accuracy, but with some efforts and a decent tracking strategy in place, it is possible to get an accurate enough analysis of ROI. Of course one can make it really complicated and come up with complex compound metrics, attribution modelling systems, and so on.. but ultimately, to start with, it is a simple case of identifying one or 2 main business goals and stick to that, just like Peter Syrne mentioned in his comment.

    Therefore, taking Robert’s example, if hotel 1 spends 5k on a SM expert and gets 2 bookings out if it, then the ROI is going to be what it is. It is then up to the business owner to decide, whether the exposure, traffic, etc was enough to justify the cost in the absence of a positive ROI. This is no different from a business owner happily spending 10K on a glossing magazine spread or a PPC campaign with no goal tracking in place apart from number of impressions and clicks. And on the same token, the so-called social media “experts” that Robert is so frustrated with, are no different from SEO “experts” who to these days still promise 1st position in Google for 10k upfront or bad web designers, dodgy SEM vendors and so on.

    The issue is not social media or the complexity of measuring ROI, but the lack of knowledge, incorrect implementation, and bad advice from vendors, which can happen in any other online channel. Not all social media campaigns will work and not all businesses will benefit from it, but I have analysed enough online data over the years to say that the same applies to PPC, display, email campaigns, etc.. Ultimately, it is up to us as consultants (I dare not say experts..) to advise our stakeholders, clients, colleagues as best as we can. If they then decide that 5,000 facebook likes are good enough to justify a 5K spending, as misguided as that is, ultimately, it’s their money, but the channel should not be the one to be blamed for incorrect business decisions or unscrupulous vendors.

  8. Tony Champion

    The Emperor is naked – there, I have said it.

    The social media are means to an end and not the end itself: just like telemarketing, email marketing, direct mail marketing. All can be measured – maybe not with 100% accuracy but respectably close enough to gauge a ROI.

    Social media tools are shiny and new but they are not infallible.

    They are only as good as the business, processes and strategies they are supporting.

    Olivier Blanchard likens Social Media to an infrastructure: it is a set of platforms and technologies that allow people to talk with other people. It is what sits on that infrastructure that is the real important bit and perhaps many of the social media experts that Robert’s clients have encountered know about the platform but perhaps not so much about the (social) business that happens on top.

  9. Peter Syme

    If you want to see how a hotel uses social media and measures it go and speak to the guys at Citizen M. There strategy has SM at it’s core and it paying back in spades. They did have the advantage of not having history so came at it from a start up point of view.

    How many business hotels do you see consistently at number 1 or number 2 on tripadvisor? These guys, live and breath SM and they totally understand their target customer, and implement to service that target customer.

    In my own small businesses I engage across many SM routes. Why? My clients past and future are there, and I cannot see how a service based business can ignore the dynamic changes that are happening at rapid speed. You have to be part of the conversation. I just measure two things.

    1. Enquires generated
    2. Converted business

    I could measure a heap of other stuff, but as a small business with no marketing resource and limited time I like to keep it simple. The only cost is my time.

    Last year I generated just under 6 figures directly from social media, so far in 2012 we are on track to do significantly more, however, figures skewed a fair bit because of a $60k enquiry. Also had significant marketing exposure via TV because of SM.

    I am not saying it is easy it is not, and it is not helped by a minefield of “experts” selling the wares with often very little hard facts to back up the sales spin. Ignoring it is not an option though in my opinion. A combination of great search results and great SM strategies will ensure tourism business thrive, if they have the product/service to back it up.

    In an industry with more and more services and middle men in between the customer and the business who provides the service, SM is they way to deal direct, however, I do not think there is a laid down model that fits all businesses, it has to be designed and tested for each individual business and it is also a forever changing beast, which is why so much frustration happens.

    • Robert Gilmour

      Peter, delighted to lean of your experience, most hotels would give their back teeth for this, you are certainly the rule rather than the exception – and the fact that you can directly attribute the conversions &c to social media is a very rare feat.

      My contacts tell me Citizen M spend a huge amount of budget on social media as do Roger Smith. i’m afraid the bulk of my clients cannot be convinced enough of the benefits of social media to entertain such spends without concrete ROI predictions for the boardroom, at the very least.

      • Josiah Mackenzie

        Robert, I work closely with citizenM Hotels and The Roger Smith Hotel, and the difference that I see is not that they spend a huge amount on social media, but rather their approach of “social hospitality”:


        You may see this approach as less driven by numbers, but I know the owners of both companies view this as strategically important for their growth.

        • Robert Gilmour

          I hear what you say, now i have about my thousandth definition of social media to add to my collection. it gets itself into bed with anything that will hype it up.

          These hotels are indeed lucky, to most its a numbers game, commercial viability dictates that.

          There will always be stars, among huge clouds of doubters, and small businesses who hear all the hype and mixed messages from all these experts and feel like they are in no man’s land with it.

          Furthermore they’d love to have a budget like Roger Smith Life to try to be a social media champion.

          We need to get real about this, its about the equivalent of the ‘main in a street’ hotel’

          • Peter Syme


            Surely it is the ” man in the street hotel” that has the most to gain as they now have a way to compete without having the budgets of the big boys to spend on marketing.

            I totally agree about the hype and the confusion it causes and to many experts do not help. However, it is here it is not going away and it provides opportunity , loads of it.

            Here is another example afraid from my industry rather than hotels,


            There average booking value is in the $3-5k range and I have seen in detail how much they measure every part of SM and how it is driving business for them, lots of it!. They have not thrown money at it they have just sat down and worked out a system that puts the customer at the heart of everything they do and then got on and implemented it. They blow my efforts out the water.

            Again not easy to copy or just do , it takes each individual business to work out what it is really offering and then how it is going to enhance their customers experience via SM. Experts have their place but what works for one business will probably not work for another business and that is why the fog just keeps getting thicker.

      • Peter Syme

        Hi Robert

        As much as I can gather I think SM is the marketing spend for CitizenM at the expense of more traditional marketing routes. Like I said I think they had an advantage of designing and implementing from the ground up, due to being a start up. Not many traditional hotels have this flexibility so it will be much harder for them to make the change and fully embrace the customer. CM pay there staff 30% of their income based on trip advisor reviews using a clever system! I cannot imagine many Scottish hotel staff teams embracing that!.

        We can track it because we are small, but I am convinced any business can track anything they want in SM if they put the systems in place and more importantly get the staff onside. To me the whole thing is just part of normal customer interaction now, yes more confusion, yes more chaotic but yes more rewarding as well.

        The hotel industry especially the small owner managed hotels and small independent groups are struggling as we can all see, those that embrace customer service on every level possible to them , as well as finding their niche will have a chance, those that do not will find life harder going forward.

    • Robert Gilmour

      I hear all your remarks about CM. I have stayed ion one. it is one of the most dehumanising ‘hospitality’ experiences i’ve ever had in my life. it was horrible. it was a disgrace to the destination with which it had absolutely no empathy, and the only thing it was missing was a robot. Its s nonsense to say CM have a customer centric approach – they have a numbers game approach driven by techies. Mutton dressed as lamb doesn’t even come into it.

      I’m not one of these people that manipulate Trip Advisor, having been an ex (and very successful) hotelier sufferer of this lot. So i would never have posted a review, i would have been insane before i finished.

      The Scottish market will vote with its feet, the only way the Glasgow CM is filling is because of price, and flash selling – so much for an amazing social media strategy they can accurately measure ROI on. They are devaluing the already discount laden Glasgow market,. and i hear about to unleash on Edinburgh apparently, if they haven’t already.

      Scottish hotels who value the Scottish hospitality experience – stick to your guns, and don’t robotise, i’d say…

  10. Tony Champion

    There are 15 good points here and I agree they should be taken on board when devising your social media plan. I do understand Robert’s frustration at not having a clear ‘how to’ guide but in reality IMO it is just not possible to have a universal, one-size fits all approach.

    Here, in brief, is my take on the issue as the former owner of a small business for which, perhaps by definition, budgets were tight. Everything had to be done for a reason and measured, no matter how crudely.

    Not enough company’s have adopted Barbara’s first point as their Golden Rule number 1: start with a goal – a proper business goal. Note: number of Facebook fans or Twitter retweets is not (or shouldn’t be) a business goal.

    Once you have your goal, work out the best way to get there – it could be a Facebook page, a Twitter account, a mobile website, a competition or any number of other options. The tools used will depend upon your goal, your business and your customers. You can then work out your KPI’s, metrics and ultimately discern your ROI.

    For me the key is not to view social media, or any other tool or channel, as silver bullets to be shot into cyber space without first asking why.

  11. Robert Gilmour

    I’ve read all this and ‘m none the wiser, sorry – they’re saying nothing much about stuff we don’t already know, and even less than that about ROI , in fact hardly any of these thoughts are really anything to do with any usable commercial concept of ROI.

    People have talked round this subject till we’re all blue in the face, and clearly are continuing to do so. We need ‘how to’ bullet points, live examples, case studies proving satisfactory, independently verifiable ROI calculation/performance. It is absolutely no surprise to me that there is a problem here, because social media, particularly Facebook is about engagement, not commerce, and its even hard to measure engagement. We need to recognise where social media fits into the commercial scheme of things, rather than trying to convince people that its the be all and end all, and if you don’t do it, there’s something wrong with your business, even tho’ you don’t know what social media is supposed to/can do for it inn the first place

    • Josiah Mackenzie

      I appreciate your thoughts, Robert, but when you look at metrics directly related to sales – such as lead source/volume or sales conversion improvement – how is that not about ROI? Also, cost savings is a very transparent measure as well. These numbers are as close to quantifying a “return” as you can get. I’m just a little unclear on what you mean…

      • Robert Gilmour

        Its not the what to do, its how to do it, including an attribution model, and practical examples of successful ROi calculations. That’s what i never seem to see. Also as ROI is dependent on cost, how do you attribute a total cost to social media activity, another area that is almost without exception never addressed properly by the commentators, and an essential part of the ROI calculation, and a recent survey showed that only a minority of firms actually identify and attach a budget to it- or worse still, plunder other budgets to fund it, notably the search budget.

        The other issue I’m not clear about is what you identify as attributable to social media activity alone. Social media experts try to attach it to every positive, successful marketing initiative in every way, shape or form it can, especially mobile. Mobile is mobile, social media is social media. My company among other things builds successful mobile websites for hotels, The solution doesn’t need social,media to be successful, it needs to attract and make conversions in the real world of mobile space. I am still waiting on my first mobile booking referral from social media.

        My interest in this is that i have clients who have spent considerable money with social media companies and marketers, for little or no identifiable return

    • Fernando Rodríguez Merino

      Hello Robert,

      Maybe you can give an example of what it is a “usable commercial concept of ROI” and “successful ROi calculations”, as it is not clear for me. If you find one, I would like to check if it has a separate and independent ROI.

      Not only mobile web sites, but call center, ppc, offline adverting and many more are together during the selling process and you cannot point any of them as absolute responsible of conversion, despite every one wants to say that it is the sole owner of the conversion.

      As a hotel marketeer, I know what does it mean to be responsible of budget and how tricky can be metrics. My final conclusion is that every tool collaborates on a certain level and has to be measured separately throughout the marketing funnel.

      • Robert Gilmour

        Fernando, that’s exactly what i’m asking for!

        Hotels are happy to pay OTA’s commission, no one is disputing they have a part to play in the conversion – otherwise why pay them.

        It is not good enough just to make excuses for social media when the leading Q’s are asked. this is part of the problem. Social media is like a house with no foundations. I have named it elsewhere as a wannabe – rather like a a solution looking for a problem.

        Let me give you some practical examples – – – – – –
        Hotel 1, spends £5K with a ‘social media expert’ – has had Facebook 28 referrals, 0 conversions over 3 months.(Google Analytics)

        Large city hotel, 2640 Facebook ‘referrals’, 2 bookings (Google Analytics)

        I had a call from a prospective new client asking me if I was a social media expert, when I asked ‘why’ he said he wanted to increase his sales revenues by 20%. We really need to get real especially with small businesses of what social media can and can’t do for them and their business before they plunge in and spend money which has an opportunity costs and might be better spent elsewhere.

        In this particular case, the client’s web site was one of the worst i’d ever seen yet he wanted to throw a big budget at social media – Costa Concordia comes to mind.

        My point is simple, until we can have reliable sustainable measures of ROI we can benchmark, then encouraging small business to spend budgets on, or worse still, divert budgets to, social media activity is a potential poisoned chalice.

        I’ve made my points on blogs and elsewhere re the risks and downsides of social media, these are conveniently forgotten,or not well enough understood, by – so called ‘social media experts’

        • Fernando Rodríguez Merino

          Hello Robert,
          I agree with you when you say that your client should fix their own website before thinking in social media, mostly if he wants to increase reservations. However, maybe Google Analytics is not the best tool for measuring social media performance. Regarding OTAs many people tend to think that working with them is “free”, as they are only paying % per booking, but the truth is that it could represent a big cost of opportunity, and what it is sure, their ROI (or interest on working with you) is directly related with the social media status of the hotel product they sell.

    • Bruce Sweigert

      Agree with Robert here. Everyone has been talking about ROI citing huge numbers. Its not a question of whether it is there or not (it clearly is in many cases), but to date I’ve not seen even the most basic attempt at an analysis that shows attribution.

      Social media is now quite mature in the market. What is getting tiring is they every time somebody launches a social media campaign and gets thousands of “likes” its just assumed that its a commercial success.

      Its time to move beyond the hype and start looking at it like real business people.

      • Robert Gilmour

        The all talk and very little action approach to ROI on social media is going to be a big cross to bear especially when in other areas of travel and hotel marketing are being asked to, and are, tightening up their ROI’s and metrics.

      • David Kolner

        Agree with everyone that attribution modeling is the missing link for creating ROI in Social (or staying on top of the flood of data from virtually every other digital format). There is lots of different trial and error of these types of models, but in my experience the leadership in this area is from outside of the travel industry – expect to see more innovation at SES and SMX events where thoughtleaders are sharing actual results of attribution modeling tests.

        Until we get to true attribution modeling in any form, it’s going to be conjecture, best tips, and ‘the ROI on Social Media is that you’re still in business in five years’ – this isn’t criticism of the conjecture, just pressure for innovators to lead on the next world of analytics and attribution modelling.

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