Every survey of marketers over the last decade has flagged “Social ROI” as the top challenge. It’s been beat up so much that it’s almost a dirty word (or five words).
Yet, after a decade of discussion, only between 12-15% of CMOs can quantify the impact of social on their business. The challenge is understanding the “R” in ROI. After all, the “I” is pretty easy — marketers know what they’ve invested. But what, exactly, are they getting back?
That “R” is elusive, challenging…and critical for guiding improvement. Back in 2010, Altimeter published an amazing report called The Social ROI Pyramid. The report found that “creating ROI measurements” was the top problem for social strategists, and used the pyramid below to highlight the hierarchy of metrics for solving this problem.
The report suggested that 2011 would be the year we solve this problem. That’s right, 2011! Here we are in 2016, and we could make this same statement today, as the problem remains critical and unsolved:
“Corporations must develop a standardized way to measure first based on business goals. […] measurement is key in 2011 as social business will fragment to every customer touchpoint.”
The majority of social marketers are still stuck in the bottom portion of this pyramid, but I believe 2016 will be the year we get to the top. This is the year we will finally see the majority of social marketing leaders break through those long-standing obstacles to Social ROI.
When talking with social marketing leaders, I see these barriers come out in three categories: Settling, Fear, and Technology. Each manifests differently, depending on the type of business (eCommerce, CPG, B2B, etc.), but the general challenges are consistent across industries and business models. Here’s a bit more about each of the challenges and how the best social marketers are moving forward.
Barrier 1: Settling… for the Easy Approach
Measuring ROI on social is hard! Other channels, like paid search or email, have it easy: they are part of a controlled, linear process that can be tagged and measured completely. Social is a messy process, across lots of channels, traversing paid, owned, and earned media, and getting even trickier as “dark social” sharing increases.
Because of this, most social marketers have simply settled for what they can measure in social instead of what they need to measure in order to drive results.
In other words, the majority of social marketers have plugged in a theoretical proxy for ROI, rather than establishing actual ROI. Of course, the best leaders have not settled. They have gotten laser-focused on establishing their business goals, measuring toward those goals, and optimizing social strategy, content, and tactics for their desired business results.
Unfortunately, many marketers have been forced to settle due to technology limitations, or have chosen to settle out of convenience. The problem with using a proxy for results is that you begin optimizing for that proxy rather than for business success. It might end up delivering results by chance, but it requires your CMOs to believe in the story rather than quantitatively knowing that it delivers results.
Barrier 2: Fear…of the Numbers Sucking
Most savvy social marketing leaders know their engagement-per-post. They know the impressions driven from their last campaign. They know how share-of-voice is trending for their brand. They know how much their social following has grown year over year vs. their competitors’. These are great directional signals.
However, most social marketers don’t know the revenue-per-social-post. They don’t know how much traffic and conversions are coming from earned and “dark social,” or which content drives the most conversion. They don’t know if engagement actually correlates to impact on revenue or the buyer’s journey.
Unknowns like this are scary! What if 300K engagements or impressions yielded $0 of business value? That’s a scary scenario. We recently had a customer, who is part of our social attribution pilot program, encounter this realization. They discovered that owned social posts were driving no purchases on their eCommerce site.
Instead of fearing this insight, these social marketers leaned in and saw it as an opportunity to begin truly optimizing for the right results. Through attribution they also discovered that earned and dark social activity were driving traffic and purchases to some product categories. They also noticed that the product and content being shared organically was fundamentally different than their owned content.
This allowed them to begin adjusting strategy and optimizing for results. Uncovering something that turns an assumption on its head can be scary. However, it’s even scarier to be flying blind. The best social marketers recognize this and embrace the unknown truths about their social ROI. Even if the numbers aren’t pretty, they see this information as a foundational insight that is critical to driving business results.
Barrier 3: Technology…for Proper Social Attribution
Most technology solutions only deliver a small piece of the puzzle. You can piece together web analytics, financial data, social listening, social network APIs, and other directional data, but it’s a technological challenge to properly attribute all types of social activity to the buyer’s journey and revenue. This is a problem we’ve invested heavily in at Simply Measured (with social attribution), and have begun delivering solutions to our forward-thinking customers.
Even the most amazing technology solution for social attribution can only work if the problems above (settling and fear) can be overcome. It also requires a commitment from your social marketing leaders, technology vendors, and service providers to make it happen. There is no one-size-fits all for in-store vs. eCommerce, B2B vs B2C, and high-value vs. low-value transactions, so getting to the top of your social ROI pyramid takes a thoughtful approach to implementing technology.
These barriers are clearly significant, but overcoming them presents a massive reward. The reward is more than just proving ROI. The reward is more than bringing social to parity with other “measurable” marketing channels. The reward is the foundation for increased results: revenue, brand awareness, or any business goals. “Social ROI” is only identified as the first problem only because it’s a gating factor for improved results. It’s taken us a few years, but social marketing leaders are now honing in on the ROI of their social media investments across paid, owned, and earned (and dark).
It’s an exciting time as this takes hold in our industry, and we break through to see social achieve its full potential.