Defining the relationship between social media and ROI has so far proven a slippery task. With many holiday social media yields adding up to only 2% of sales, many industry-wide are investigating the effectiveness of social media as a marketing platform. So what is the impact of social media, and how can it be measured?
In their book ‘The Power of 2,’ Rodd Wagner and Gale Muller analyze the dynamic between legendary basketball players Karl Malone and John Stockton. Malone, nicknamed the ‘Mailman’ because he always delivered, is one of the top scoring NBA athletes of all time. Stockton’s career was defined by a record number of assists. Essentially, he set up the shots that Malone took. “An assist man needs a ‘finisher,’” wrote Jack McCallum in a 1998 Sports Illustrated article, “and it’s no secret that Stockton is looking for the ‘Mailman’ most of the time.” With so many trying to pin point which of the two is solely responsible for their success playing for the Jazz, Wagner and Muller suggest that neither can be credited alone: success came through the collaboration of their complementary strengths.
Much is the same with traditional marketing tactics and social media strategies. It’s clear with early holiday sales stats that social alone is not successful at generating sales. So what are social’s strengths?
Jay Henderson, strategy director at IBM Smarter Commerce, explains that the strengths of social are indirect. In a recent Mashable interview, he encouraged frustrated marketers to use social’s “huge indirect influence” on “eventual sales” by focusing on building brand loyalty and awareness. “Our ability to attribute success to the influence of social media will improve over time,” Henderson says. “As long as you can show the influence that social media is having on the eventual purchase, that should be more than enough to justify the investment that marketers are making in those channels.” So how do you measure something fluid like ‘influence?’
Business Insider cites a study conducted by the Internet Advertising Bureau which measured that consumers are actually 90% more likely to recommend a brand after interacting with them on their social platforms: “Heinz, Kettle and Twinings found that social media can drive ROI by driving brand sentiment, encouraging consumer engagement and increasing brand loyalty.” Ian Ralph, the director at marketing sciences who conducted the research, adds, “By making people love, not just like your brand, you’re more likely to drive future purchases and increase sales.” He explains that creating an emotional connection with fans is how this is done. A connection like this results from meaningful conversation with customers centered around timely, concise and relevant content. Developing these relationships with your customers ultimately drive sales, “assisting” in the sale itself. It all has to do with how effectively your marketing and social media strategies are integrated.
So while the marketing makes the slam-dunks, social creates the connections and provides the customer service that points consumers in the direction of your products. The inherent strengths of each require separate measurements to define success but when used together will drive a more powerful influence on ROI and consumer sentiment.