This document discusses social media and return on investment (ROI). It summarizes arguments that question whether social media provides ROI, including statistics showing low referral rates from social media to sales. However, it also provides counterarguments that social media builds long-term advocacy and sales. It notes social media is the most trusted advertising source, increases effectiveness of other marketing, and is important for customer service, PR and issues management. While not driving immediate sales, social media engagement over time can increase spending by 20% and turn detractors into loyal customers. The document concludes integrated social media combined with other channels has higher impact than any single medium alone.

1. Social media and ROI
@dirktherabbit
the!verrproject.tumblr.com

2. • It has changed the way we consume
news, the way news is shared, and
the way news breaks
• It has changed the way we
communicate and connect
• It has changed what we share about
ourselves
• It has changed political discourse
• It has changed the way we learn
• It has changed how we talk about,
and interact with, brands
Social media has
changed the world

3. Why is a medium that has had such a profound
impact on society being questioned?
Social media + ROI
Advertising + ROI
PR + ROI
SEO + ROI
direct mail + ROI
0 15000000 30000000 45000000 60000000
A highly scienti!c snapshot according to Google (search results)

4. Haven’t we been here before?
“Want to know the truth about
most social media tra!c? Its
garbage.”
Aaron Wall, WebPro News, Jan 2008

5. The backlash of the sceptics?
“Brands should abandon social networks if they are unable to build
communities of a million consumers, according to Philip Gladman, Diageo's
western Europe white spirits marketing director.
"Unless you are going to get a million, don't bother... There's no point
having a little Facebook community bubbling along," he said.
"Stick it in TV", is what brands in this predicament should do with their
marketing spend, he added.
"Build and they will come", the famous quote from the Kevin Costner
baseball !lm ‘Field of Dreams’, was "rubbish" when applied to social
media, argued Gladman.
(Marketing, March 2012)

6. “So what are you really going to do for a
living” (my grandmother when I was a PR graduate trainee)
0.34% of Black Friday online
sales referrals came from
social media: “The numbers
will need some serious
spinning by social media
gurus”
(Tom Gara, WSJ)
According to Coke...”it turns
out that having a lot of
online buzz only impacts
short-term sales by 0.01
percent
“That's a pretty big deal
coming from a company
that has 61 million
Facebook fans and 687K-
plus Twitter followers”
(Business Insider)
“The relatively low trust
in social marketing tallies
with a recent Gartner
report that found U.S.
marketers ranked
spending on the
corporate website as
more likely to result in
“marketing success” than
spending on social media
sites such as Facebook”
(Techcrunch)

7. “Social media denizens are, by and large, in it for themselves. They’ll promote
your brand if it means their share of a cool $20 million...everyone likes to pat
themself on the back and feel like they’re serving their fellow man, whether
that’s retweeting a funny video or donating money to a favorite charity. But if
your fans aren’t buying your product....they’re not really fans at all.”
(Lucid Hart blog, April 2013)
“Experts say that social media’s ROI is best measured in the
long-term. But you know what I think? They’re using you.

8. Why is this even news?
1 - No, a post on Coke’s Facebook page won’t make its 60+ million fans
stop whatever they are doing, and run out to the nearest supermarket
clutching their wallets
2 - No, by and large a tweet about a brand generally won’t immediately
cause someone to leave Twitter and start going through the online
check-out
3 - No, people don’t like to see ads in their social media news stream (just
ask teens and Facebook), and they don’t like it when brands try and go
for the hard sell in ‘me’ time

9. Why do so many still think it works like this?

10. As agencies, do we sometimes shy
away from hard truths?

11. Are too many wanting a piece of
the pie?

12. We need to shift
the debate
• If you really want instant
grati!cation, there are ways of
doing so (for example -
@jetbluecheeps)
• But if that’s the aim, let’s admit it,
sometimes other routes (e.g. a
targeted email campaign to your
database) may be better
• Why are we even talking as if
social media / social media
marketing operates in a vacuum -
it doesn’t
• No, social media doesn’t always
drive short-term sales. Here’s
what it does do

13. It’s the most trusted source of brand
advertising
Nielsen's global trust in advertising study involving 28,000
consumers across 56 countries tells us that consumer
opinions online, very often from complete strangers, have
the second highest trust factor behind word of mouth
recommendations, and ahead of editorial coverage.

14. Trust in ‘advertising’
“When it comes to traditional, paid
media, while nearly half of consumers
around the world say they trust
television (47%), magazine (47%) and
newspaper ads (46%), con!dence
declined by 24 percent, 20 percent and
25 percent, respectively, between
2009 and 2011.
“Still, in 2011, overall global ad spend
saw a seven percent increase over
2010, according to Nielsen’s most
recent Global AdView Pulse. This
growth in spend was driven by a 10
percent increase in television
advertising.”

15. Over time advocates = sales
Being exposed to a brand's social media feed won't make you go out and buy on
the spot, but it will over time make you spend more - 20%+ more according to
Bain & Company.
And if you are really engaged, you end up becoming almost an uno"cial sales
agent for a brand. Taking care of your most engaged followers makes
commercial sense. According to Napkin Labs, one super fan is worth 75 'normal'
fans in generating likes, comments and engagement on your behalf.

16. It’s an incredibly good customer retention
and acquisition tool
A piece by Neuromarketer Roger Dooley cites evidence
to show that simply responding to a negative comment
online will cause 1/5 to revise their opinion and actually
become loyal customer.
What brand wouldn't welcome a cost e#ective and
proven way of turning detractors into brand advocates?

17. • From SEO to advertising, it
increases the e#ectiveness of
marketing campaigns
• It’s a crucial issues and crisis
management tool - many brands
have learned that one the hard
way
• It’s a good way to target speci!c
communities and groups
And there’s more

18. The last word goes to Coke
“Reach, engagement, love and value are the markers of success we use
for our campaigns. We measure these in a variety of ways, often with our
media partners. In beta testing with Facebook, we've been able to track
closed-loop sales from site exposure to in-store purchase with very
promising initial results that are above norms for what we see with other
media.
“But again, no single medium is as strong as the combination of media. We
see this !rst-hand in our campaigns that integrate TV and social. We know
our target consumers -- teens and young adults -- are consuming media on
multiple screens in single sessions. This means the TV is on, a laptop is
open and a smartphone is in hand. For marketers, this requires having a
single, integrated conversation across those screens. When we do this
well, we create signi!cantly higher impact than any of those screens could
do on their own.”
(Wendy Clark, Coca Cola)