BrainTrust Query: Dollars and Sentiments: The Real ROI on Social Marketing

By Doug Stephens, President, Retail Prophet

Editor’s Note: This article is an excerpt from one of RetailWire’s recent online discussions. Each business morning on, retail industry execs get plugged in to the latest news and issues with key insights from a “BrainTrust” panel of retail industry experts. Through a special arrangement, presented here for discussion is a summary of a current article from the Retail Prophet Consulting blog.

Alice in Wonderland speaking to the Cheshire Cat…

Would you tell me, please, which way I ought to go from here?”
”That depends a good deal on where you want to get to” said the Cat.
”I don’t much care where –”  said Alice.
”Then it doesn’t matter which way you go” said the Cat.
”– so long as I get SOMEWHERE,” Alice added as an explanation.
”Oh, you’re sure to do that”  said the Cat,  “if you only walk long enough.”


Like Alice, marketers often find themselves needing to “get somewhere” but may not be precisely sure where that somewhere is. This has become particularly true of social marketing efforts. With the fervor around social media, marketers are feeling pressured to begin incorporating it into their program but aren’t quite sure how. In some cases, they’re not even completely sure why social marketing matters so much – they just feel they ought to be doing it. So, like Alice, they often set out in a direction, only to find that after considerable time and effort, it got them nowhere.

In talking with marketers I’ve come across three common pitfalls that, from the beginning, can lead them astray.

Pitfall #1: Believing that all social marketing means creating social media

While social marketing may involve social media, there’s a fundamental misconception that all social marketing involves the development of content – blogs, videos, Facebook apps, etc. But depending on your company’s objectives, you may never want or need to create your own content.  The key lies in defining what results you want from the program.

I like to think of social marketing as a spectrum of engagement ranging from passive to active.  The objectives you target will directly affect the activities you undertake and your engagement level.

Pitfall #2: Setting program objectives that aren’t measurable

A head of marketing for a major regional shopping centre recently told me her objective around social media was to generate foot traffic for the mall.” This sounded like a reasonable objective but the problem is that the mall has no empirical means of credibly measuring foot traffic.

The objectives you set should meet three key criteria. They should support the overarching strategy and positioning of your business. They should be credibly measurable. And lastly, they should be meaningful to the people in your company that control the financial and/or human resources you’ll need to continue or expand your social marketing effort. After all, there’s no glory in meeting an objective, if it doesn’t at least win you the resources you need to continue your program.

Pitfall #3: Confusing social activity with return on investment

Part of what gives social marketing a bad rap is that too many marketers simply measure and report the company’s social marketing activity – that is, blog posts, YouTube videos, Tweets, etc. They also tend to confuse return on investment with non-financial consumer responses, like blog subscriptions, YouTube views, Re-tweets etc. The result can often be a nebulous set of metrics that neither support nor negate the merits of their program. What they fail to measure is the amount of sales, profit or cost-savings that the social marketing program is (or isn’t) generating – the real return on investment.

Part of the problem is that we’ve been told that financial ROI on social marketing can’t be measured – that it needs to be valued against softer metrics – which is simply not true. A great Slideshare presentation here from Olivier Blanchard of The Brand Builder demonstrates an excellent methodology for measuring financial ROI on your social marketing spend.

We’re beyond the “shiny tool” phase with social marketing and the onus is back on marketers to show the return on their work in this area.

The BrainTrust panel agreed that metrics are critical when it comes to social marketing. “We haven’t come close to developing an appropriate set of metrics for social media yet,” said Ryan Matthews, Founder & CEO, Black Monk Consulting. “What we need to do is work far more aggressively to understand that a new road requires a new roadmap.”

Another panelist agreed that the idea of measuring real ROI (sales and profits) is dead-on right. “Sometimes, when I hear the talk about social marketing, I think we’re back in 1999-2000, talking about eyeballs and land grabs” said Jonathan Marek, Senior VP, APT. “We all know what happened next. It’s hard to remember how relatively unsexy Google was back then (text ads?!?), but they showed real ROI and they won. This too shall shake out, and when it does, only those social media that show real ROI will win.”

And while the general consensus is that social marketing should and could be monetized, some panelists said that ROI isn’t always the primary objective of social campaigns.

“Social Media Marketing is similar to the original Internet marketing,” said Dan Desmariais, President, Cantactix. “You knew you had to do it to keep up with the competition and you had no idea if it was working. The opportunity for Social Media is to build your brand. Coca-cola and Adidas are unlikely to be able to justify ROI for the 3B they’re spending on the World Cup. They’re doing it because they believe it’s important to build their brands. Social Media provides the opportunity to appear accessible and show quick response to unhappy customers.”

“I think part of the problem of measuring ROI is confusing desire marketing – people searching for what you have to offer right then which can be tracked vs. intent marketing – people who “might” be interested on social media,” said Bob Phibbs, President & CEO, The Retail Doctor & Associates. “Social media to me is just putting breadcrumbs out hoping people might pick them up and follow you to your site/store. Don’t confuse that with your core customers looking for the whole loaf of bread.”

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