The Never-Ending Discussion about Social Media ROI

The debate on the usefulness of social media for marketing a brand is raging on. Again and again, field experts are asking whether marketing on social media is worth the investment for a company or whether Facebook, Twitter, etc. are just fads that are worth little to generating business revenue.

When thinking about social media marketing in a traditional sense, those criticizing the lack of Return on Investment (ROI) in this area certainly have a point. One has to look no further than Facebook’s stock value, which has declined by 24% less than two weeks after its initial IPO on May 18.

Clearly, investors are unsure about whether a company that after 7 years of existence still struggles to make a profit despite millions upon millions of users can be sustainable in the long run. So if even the mother ship of social media can’t make much profit, small companies looking to advertise on that platform are doomed to fail as well, right?

Well, not quite. ROI is a touchy subject among marketers because it is often difficult to measure. If the goal of a marketing strategy is generating profit, then sure, it’s easy. But how does a company measure raised brand awareness, preference, or loyalty without spending extensive time and resources that may not be available to small businesses on qualitative and quantitative research?

Simple ways such as Facebook likes of the brand page are a start, but often not enough. In fact, a recent BizReport study shows that of all Facebook users ‘liking’ a brand page, 69% rarely or never return to the page. The article draws the obvious conclusion that a simple decision to ‘like’ a brand does not equal preference or loyalty. So companies have to find different ways to  measure brand involvement which is necessary to even start analyzing ROI, ways that are often too time- and resource consuming for a small business.

Yet in my opinion, overvaluing measurable ROI when evaluating the use of social media as a marketing tactic can easily lead into a trap. Quite simply, social media is where the people are. Facebook, Twitter, and LinkedIn, the three largest social networks, combine for over 1.1 billion users as of this March, and the numbers are rising by the minute. Thus, the question has to shift from whether social media marketing is worth it to whether a business can afford not to use it.

Especially because using social media in marketing doesn’t necessarily mean investing significant resources by using their on-site advertising. A Facebook brand page can be created in minutes and a Twitter page in seconds, without excessive monetary or time commitment.

With a little creativity like cross promotion with traditional media, contests, social coupons, or simply a show of brand personality, people will get involved in the brand. The tangible ROI might remain difficult to measure, but a well-managed social brand presence costs little enough resources to be worth it even with initial modest results.

So don’t get confused by the never-ending discussion about Social Media ROI. Give your brand a social face, reach your customers where they are most susceptible, and involve them in your brand. Because as long as the investment is small, the profits are liable to go through the roof.

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