The document critiques the effectiveness of social media marketing, arguing that organizations often overspend with minimal returns, demonstrated through case studies like Pepsico and GM. It advocates for reallocating marketing budgets towards more reliable channels such as search engine optimization and pay-per-click advertising, which have proven higher ROI. The document concludes that while social media may have networking benefits, it fails to drive significant business results compared to traditional marketing methods.

1. www.TheROITeam.com
frank@theroiteam.com
Social Media:
HOW TO SPEND 50% OF YOUR ONLINE MARKETING
BUDGET ON 1% OF THE RETURNS

2. Social media in 2012
• Is Social Media the new “Tulip
Mania”?
• Organizations are over-spending on Social Media, hoping some luck
will rub off
• Still dwarfed by Search Engine Marketing, Pay-Per-Click, and good old-
fashioned offline selling
• Even Facebook can’t make any money!

3. CASE STUDY
• In 2010, PepsiCo made a huge investment in Facebook to engage 87
million users
• It was innovative, but....
• By March 2011, Diet Coke surpassed Pepsi as the #2 soft drink.
• Sales dropped by 6% in a category with an overall drop of 4.5%

4. CASE STUDY
• In 2010, PepsiCo made a huge investment in Facebook to engage 87
million users
• It was innovative, but....
• By March 2011, Diet Coke surpassed Pepsi as the #2 soft drink.
• Sales dropped by 6% in a category with an overall drop of 4.5%
• “We were wrong!”
• Dropped Social Media campaign
after just one year
• Moved marketing spend back into
traditional advertising

5. • Social interaction happens offline,
not online
• Facebook: Less than 1% of fans are
active
• Social Media’s ability to engage brand
advocates and drive “viral” marketing is still
very limited
• Social: Better for existing
customers
Why did this happen?

6. CASE
STUDY
• General Motors began spending on Facebook in 2008.
• Grew campaign to $10 Million annually
• Announced cancellation of Facebook campaign in May, 2012
• Domino effect: GM’s decision caused other large organizations to
reconsider or withdraw

7. The problem
• Social Media, while a good networking tool for salespeople (LinkedIn), has
consistently returned a poor ROI as a marketing
platform
• Word-of-mouth happens offline (over 90% - Keller & Fay)
• Less than 1% of Facebook fans and other social media followers are
active fans who share the brand with others

8. The solution
• Drive online marketing through proven platforms such as
Search Engine Optimization and Pay-Per-Click
• Engage prospective customers with proven platforms such as
email marketing, direct mail, event marketing, and more
• Costco: Will not engage in Social Media, but strictly in Search Engine
Optimization

9. Why SEO over
Social or PPC?
• Top search result receives 42% clickthrough
• 62% of users click on first-page results only
• Only 23% of searchers to go Page 2
• SEO: Top lead source for both B2B and B2C - Webmarketing123
• SEO on average delivers 80% of the leads @ 15% of the budget

10. Social Media Examiner
April, 2012

11. • 77% of web users choose natural
over paid when searching
• 67% of web users choose natural
over paid when
purchasing
• Natural clickthroughs generate
25% higher
conversion rate than
paid
Paid or natural search?

12. • 40% of SEO campaigns realize ROI in excess of 500% while
only 22% of pay-per-click campaigns have realized this value
• SEO cost averages 12.6% of pay-per-click
Paid or natural search?

13. The Sussex SEO

14. The Sussex SEO

15. SEMPO

16. • For every 1 click on a paid result, the organic result generates
8.5 clicks
• SEO drives over 75% of
search traffic at 15% of the
budget; PPC receives less
than 25% of traffic at over
80% of budget
Paid vs. natural results?

17. Search credibility
• Search
users
know
that
Google
prides
itself
with
the
“user
experience”
and
delivering
the
most
relevant
and
useful
results
to
users
• Consumer
percep9on:
“Google
Stamp
of
Approval”
for
first-­‐page
results
• Paid
ads,
on
the
other
hand,
can
be
purchased
by
anyone
-­‐
no
credibility

18. Why ever use PPC?
• Instant results: Ads showing within minutes while SEO can take
months
• Can test many page variations; confirm that a page converts before
SEO’ing it
• Keyword Research
• Show ads on Display Network
• Show ads for keywords you’ll never rank for SEO (competitor names, etc.)
• Retargeting to SEO & PPC leads

19. Conclusion:
Social vs. Search vs. Paid
• Social
Media
fails
to
effect
“viral
marke9ng”
and
offers
poor
ROI
• Search
Engine
Marke9ng
generates
over
80%
of
both
B2B
and
B2C
leads
• Natural
search
is
far
superior
to
paid
search
and
generates
an
extreme
ROI
• Paid
search
has
its
place
and
should
be
considered
for
numerous
reasons

20. TESTIMONIAL
Jerry was a prominent New York attorney from YourLawyer.com He had tried
EVERYTHING to grow his search engine rankings for personal injury keywords. Over 18
months, little had worked. When he came to us he was skeptical we could help him
because so many "SEO Experts" had burned him and only took money without getting
him a result. When he tried us, his SEO rankings grew fast.
Traffic grew 21% in 1 week. 62% in 6 weeks.

21. TESTIMONIAL
As you probably already know, the insurance industry is VERY competitive & challenging
to drive new leads for insurance keywords! Except, we just took a client to
page 1 of Google for the keyword: Insurance Lead
We took them from zero rankings to the TOP 10 out of 269 MILLION competing sites
in only 3 months. Pretty cool, right? What's better is the traffic from 33,100 searches a
month for this keywords! …which means a BIG sales revenue jump!

22. TESTIMONIAL
Druva.com is a business in the PC recovery and Hard disk recovery market. Here's
what we did for them: “Laptop backup” - Google #1 - 22,500 monthly searches. “PC
backup” - Google #3 - 301,000 monthly searches. “PC backup software” - Google #3 -
12,100 monthly searches. Before we started working with Druva.com they had ZERO
rankings for any of these keywords.You could say we kicked their site to the top of the
pile! (And made them a mint in the process)

23. TESTIMONIAL
As you probably already know college kids look all over for grant money. So when we
took SchoolGrants.net as a client, they were skeptical we could produce page 1 Google
rankings for them. We put them in the top 10 on Google for 9 separate keywords. Here
are just 5 of them: “Private school grants” “grants for school” “private grants” “school
grants” “schoolgrants”. Over 385,600 monthly searches are done for these 5 keywords
alone. I'm sure you'll agree, That's a LOT of Free Traffic, right? However it gets better, All
have HIGH competition and SchoolGrants.net was nowhere near page 1 for any of these
keywords before we started working with them.

24. TESTIMONIAL
When a major travel website approached us wanting to increase traffic for the
extraordinarily competitive search terms "hotels" and "rental cars," we were eager to
take on the challenge. We took them from #9 to #1 on Google for "hotels" in only 6
weeks. And from #53 to #5 for "rental cars" in just 5 DAYS. Then, believing they could
handle it "in house" going forward, they quickly lost those valuable rankings and are
coming back on board as a client - this time, permanently.

25. www.TheROITeam.com
frank@theroiteam.com
Social Media:
HOW TO SPEND 50% OF YOUR ONLINE MARKETING
BUDGET ON 1% OF THE RETURNS