Social Media Return on Investment (ROI)?
Yes indeed! It exists! Whoohoo!
ROI is tricky to prove without in any situation but there is hope. The first trick is to determine what you are trying to achieve. What is the return you are after? What is the objective? Who are you trying to reach? If you’re doing this on behalf of a customer, it is crucial to understand their end goal but also the interim things that drive their business towards their goal (web traffic, time on site, loyalty …).
Some context: Ottawa Bluesfest
FaveQuest was tapped to expand the Ottawa Bluesfest web property in 2009 by including social media integration (youtube, flickr, facebook …). The festival people are incredibly sharp … they know what drives their business and we worked hard towards very specific goals. Based on that experience, here are my two ways to generate and measure Social Media ROI.
# 1: Social Media drives Loyalty, Loyalty drives Business
Bluesfest organizers drive a significant number of sales through their Insider’s program. They know this because the initial marketing campaign is focused on this insider group and they can measure the direct impact on sales, with members of this group buying tickets months before the actual event.
One of our goals was therefore to grow the insider list with quality people by providing music fans with real value and incentive to register … no tricks. By registering, they could access their personal calendar from anywhere, share it with friends, get schedule updates, invite friends and much more.
Many thousands of people registered … far more than expected … and this will drive increased business next year. Because they joined as fans, rather than things like “join to win an ipod”, they are true very highly qualified leads. Onto #2.
#2: Virality: Social media allows fans to carry your flag
A powerful alternative to traditional advertising is to have your existing fans carry your message for you. Give them the proper fun, interactive tools that benefit THEM and they will spread your message to their friends. They become fans and tell their friends and so on. Friends are the most trusted sources of recommendations by the way. Not advertisers, not journalists. Friends!
Upon launch of the Bluesfest site in April (festival is in July), tens of thousands of people hit the site within hours. On top of this, tens of thousands loyal fans could be reached via email through the insider program and other programs. This represented and huge army of fans that could spread the Bluesfest message. And they did.
I’ll share with you some of the details of the solution we implemented in the next post. Suffice it to say that nearly all interactions were measurable. We know how many people watched band videos and clicked +AddToMyCalendar. We know exactly how many events showed up in Facebook newsfeeds and how many people likely saw them. We know how many people were invited to attend events through the +InviteFriends button. This may not be PROOF but it is certainly much more measurable than an add in traditional media and it can be substantially more cost effective.
Social Media ROI, the hard questions
The question ultimately is not “does social media have benefits?”. The question is “do I get more bang for the buck?”. If I divert $20k from traditional media to social media, will I get the equivalent of $40k worth of results relative to traditional media for reaching on-line audiences? Or perhaps “can I drop my $100k traditional advertising budget to $20k with a strong social media component and not impact my business in a negative way?”.
I can’t share the exact numbers (yet) but in many cases I analyzed, including our own, the answer is a resounding YES. You can get way more bang for the buck if you do social media right. For the mere cost of the social utilities and some legwork, tens of thousands of fans involved their friends and it was all measurable, highly successful and loyalty was built along they way which pays off for years to come.
I’m very grateful to be included in a SXSW panel proposal on this very topic. The panel is moderated by Keith Burtis and I’m joined by a stunning group comprising of Amber Naslund of Radian6 ; Sue Murphy of Jester Creative; Jay Berkowitz, CEO of 10 Golden Rules 10 Golden Rules Blog and Justin Levy New Marketing Labs. Be sure to check their upcoming posts on this very topic … you’re guaranteed to learn something valuable.
This panel is going to rock but of course, it will only actually happen if you vote by clicking here panel picker .
Cheers,
Allan Isfan
CEO, FaveQuest
