How Social Media Impacts Marketing's Bottom Line

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Companies know they need to incorporate social media to reach new, existing, and potential customers and to demonstrate business impact, yet many are uncertain about how to go about it. How does e-commerce slot into the new medium? Will implementing marketing campaigns—or even e-commerce storefronts across social media channels—pay off financially? The good news is that social media is maturing quickly, and solid solutions exist to help achieve ROI.

Read more: http://www.cmo.com/strategy/social-monetization-measuring-its-impact-bottom-line

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How Social Media Impacts Marketing's Bottom Line

  1. 1. Slide 1:Social media as a marketing tool shows no sign of letting up. In fact, it is one of the fastestgrowing and most promising strategies a business can employ to boost sales and conversions.Consider: If it were a country, Facebook, with its 750 million users, would be the world’s thirdlargest; Twitter processes more than 50 million tweets every day; and one in four of adults over65 now participates in a social-networking site, according to eMarketer. It’s no wonder that,today, social media is one of the keys to building branding and engagement. But it is also aviable marketing channel of its own that can deliver genuine value to the bottom line.Companies know they need to incorporate social media to reach new, existing, and potentialcustomers and to demonstrate business impact, yet many are uncertain about how to go about it.How does e-commerce slot into the new medium? Will implementing marketing campaigns—oreven e-commerce storefronts across social media channels—pay off financially?
  2. 2. Slide 2:The good news is that social media is maturing quickly, and solid solutions exist to help analyzethe return on investment (ROI) that can be achieved. Quantifying success in this new arena canbe trickier than is the case with traditional marketing channels, such as advertising, and that iswhere much of the consternation and confusion arise.The biggest difference from traditional marketing channels is that the results from social mediaoften happen more circuitously than they do in direct advertising: A potential customer reads atweet or Facebook posting, sees a status update, clicks a link to your company Web site, and theneventually purchases a product—but this action might occur at a much later date. This realizationmakes measurement more challenging, but it is absolutely possible using today’s solutions.
  3. 3. Slide 3:As a first step in gathering useful data to gauge success, it is important to understand what youare attempting to implement, why you are doing it, and what you are hoping to achieve. Zeroingin on specific metrics once those goals have been clarified makes it easier to define success.Too many marketing executives agree to create a Facebook page or open a Twitter account,count up their fans or followers, and then throw up their hands when asked to connect thoseefforts to the bottom line. That’s why the majority of professionals still does not attempt tomeasure ROI for their company’s social-media programs, thinking it is unachievable.Adding to the challenge, many fear the lack of control that social media can engender. Here iswhere the powerful viral aspect of social media comes face-to-face with its potential for risk.Marketers can create blogs touting their companies’ products and technologies, but then youhave to accept the resulting reader input—be it good or bad. This immediate free-form feedbackloop unnerves executives who read anecdotes about social media gone awry or brands beingdamaged by social media “flare-ups”—and they become wary of the entire process.
  4. 4. Slide 4:So why, as a marketer, should you start thinking about social media as a measurable businesstool and monetizing it just as you would any other traditional type of campaign? Here are fivereasons, among many:
  5. 5. Slide 5:Social media can support and integrate many functions at once: PR, customer service, marketresearch, e-commerce, video and banner advertising, coupons/promotions, and more. Thesynergistic potential of all of these capabilities combined makes social media a superb marketingtool. Many of the principals of traditional marketing can be effectively applied to social media.Reach, frequency, service quality—and, yes, conversions and sales—all can be considered andmeasured.
  6. 6. Slide 6:Social channels can have a significant impact, especially on search (SEO, paid), mobile, andemail. More traditional digital marketers are getting much more involved in social because theyare beginning to see how it affects other channels, and they are successfully altering theirmarketing strategies to address this trend.
  7. 7. Slide 7:Social media encompasses a wide spectrum of forms, from weblogs to social blogs, wikis to podcasts,photographs to video. All offer marketers direct or indirect ways to reach customers and monetizetheir marketing efforts. o Consider the many different types of social media:  Collaborative projects (Wikipedia)  Blogs and microblogs (Twitter)  Content communities (YouTube)  Social networking sites (Facebook)  Virtual game world (World of Warcraft)  Virtual social worlds (Second Life)
  8. 8. Slide 8:When customers share a story about your business on Facebook, that story is published to theirnewsfeeds and their friends’ newsfeeds. Because the average Facebook user has 130 friends, acompany’s message can be shared exponentially, with the influence and impact of a personalreferral from a friend.Social media can be compared with search—both are essentially methods of discovery. Yetsearch, predicated on algorithms, is less personal. On the other hand, social is based on networksof individual opinions. Results from social networks can be equally relevant, and they impart aneven higher degree of confidence.
  9. 9. Slide 9:People who manage search ads consistently research the time of day, week, geography, etc., todetermine optimum user reception. Marketers can utilize those same types of analytics in thesocial sphere. It is possible to understand the best time of the day to post on Facebook, forinstance, as well as which messages drive engagement and deliver the greatest revenue impact.
  10. 10. Slide 10:If these reasons aren’t enough to consider social media a genuine marketing channel, thenresearch shows that, given the option, people want to shop on social-media sites. According to“Retailers Try to Monetize Social Media Outreach,” an August report from eMarketer, moreconsumers want to make purchases via Facebook, but many retailers do not offer that capability.By making that option available, retailers can benefit by beginning to showcase monetization fortheir social-media efforts.
  11. 11. Slide 11:Once marketing executives understand that social media can be transformed into socialcommerce, and that its impact on the bottom line can be measured with relative ease, they canthen proceed to make it an integral and profitable element of their e-commerce and marketingstrategies. Social media—and social commerce—are no longer a novelty without rules andstandards; it is, instead, a powerful set of malleable marketing tools that can be employed byvirtually every enterprise—from one-person companies to conglomerates—to boost brand orproduct recognition, instill customer loyalty on an amplified scale, and boost conversions andsales.

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