More businesses are using social media in their marketing mix, and for some, it is the only platform they use. But how do you evaluate your return on investment or ROI when you decide to use social media marketing?
An infographic from MDG Advertising titled, “The ROI of Social Media” looks at the effectiveness of social media marketing and asks whether it is worth the investment.
Social Media ROI Statistics
In the report accompanying the infographic, the company writes, “It’s hard to see how much revenue a Facebook post has brought in, or whether a tweet has increased your bottom line. Instead of focusing on likes, shares, and followers, marketers must find meaningful data that reveals whether their content is working.”
According to MDG, 44% of businesses are not able to measure the impact of social media on their business, with only 20% saying they were able to quantify the success of the social media efforts. But it gets more convoluted as 36% stated they have a qualitative sense of the impact of social media without being able to translate it into solid figures.
Saying brands are struggling to quantify their social media ROI is an understatement. However, the problem also extends to marketing agencies as 28% also faced difficulties when determining the impact of social media efforts. Over half, or 55% of these agencies, say they can somewhat measure social media ROI, while only 17 percent say they can accurately quantify it.
Why is it so Challenging to Measure Social Media ROI?
The report says difficulties arise from the fact social media is still a relatively new marketing channel, making it hard to figure out its impact on revenue. Additionally, the report says businesses find it difficult to see how social media fits into the big picture.
When looking at social media impact, what exactly are marketers measuring? Seventy-three percent of businesses say they regularly track their social media efforts with limited analyzed metrics. And marketers are not looking at overall sales. Instead, they are focusing on likes, comments and other engagement statistics.
Essentially, the report says, “Conversion rate takes last priority, despite the firms’ financial investment in the social campaigns.”
Does Social Media Work?
The answer is yes, the report says, but quantifying how much it works is proving to be difficult. And according to marketers, there are several reasons for this.
Some of the top reasons include being unable to tie social media campaigns to business outcomes, lacking analytics expertise and resources, employing inadequate measurement tools and platforms, using inconsistent analytical approaches, relying on poor or unreliable data.
The infographic below has some additional data on some of the other challenges businesses face when trying to make sense of their social media ROI.