Maximize Your Return on Social Media Spending
The 2015 Duke University CMO Survey reports that companies spend roughly 10% of their marketing budgets on social media outlets. Although that amount is expected to more than double by 2020, most marketing professionals surveyed were unable to quantify the return on their social media spending.
Social Media Examiner, a global magazine dedicated to social media issues, published another study called “2015 Social Media Marketing Industry Report: How Marketers Are Using Social Media to Grow Their Businesses.” This study surveyed more than 3,700 marketing professionals across the globe and various industry segments, attempting to answer such questions as:
Know Your Customers
A company’s preferred social media platform depends largely on whether it sells to businesses or consumers. When asked to select the single most important social media platform, business-to-business (B2B) companies tended to choose:
- LinkedIn (41%),
- Facebook (30%), and
- Twitter (19%).
But the results differed significantly for business-to-consumer (B2C) companies:
- Facebook (65%),
- Twitter (10%), and
- LinkedIn (9%).
Most companies have a Facebook account. So that’s a good place to get your feet wet if you’re just starting to dabble in social media. The next logical step is LinkedIn if you sell to businesses. And, because the platforms are similar, many of your B2B Facebook posts can be simply copied over to LinkedIn.
The next step is trickier for B2C companies, however. The appropriate platform depends on the social media habits of the demographic(s) you target. For example, consider Pinterest if you’re targeting housewives in arts, crafts and home decor. Consider Snapchat or Instagram if you’re targeting teen shoppers. Social media review sites, such as Yelp or TripAdvisor, are also attracting attention from B2C companies, because customers increasingly seek peer reviews before making purchases or booking reservations.
How Do Businesses Currently Use Social Media?
Social Media Examiner reports that 96% of companies have already incorporated social media into their marketing strategies — and 56% have been doing so for at least two years.
Overall, the top seven social media platforms that companies currently belong to are:
1. Facebook (93%),
2. Twitter (79%),
3. LinkedIn (71%),
4. Google+ (56%),
5. YouTube (55%),
6. Pinterest (45%), and
7. Instagram (36%).
Compared to Social Media Examiner’s 2014 study, Facebook and Twitter both lost ground to newer social media platforms. By comparison, Google+ participation increased by 2% and Instagram participation increased by 8% over the past year. YouTube is most often used by larger businesses with at least 100 employees.
Social media marketing also requires a significant time commitment from marketers. About one in five marketers said they spent more than 20 hours each week on social media content. Roughly two-thirds said they spent at least six hours weekly.
What Are the Benefits of Social Media Marketing?
Consistent with the 2014 study, the top reasons marketers gave for using social media as a marketing tool were:
- To generate more exposure for their brands and offerings,
- To increase traffic to their websites and brick-and-mortar stores,
- To develop customer loyalty, and
- To gain marketplace intelligence by monitoring users’ search patterns and buying habits.
In addition, social media can help professional services firms generate leads and position themselves as thought leaders by posting timely, relevant blogs and tweets. Using social media also can reduce a company’s overall marketing costs because it’s generally cheaper than many other forms of marketing (such as direct mail or television ads). And it can leverage other marketing programs. For example, by posting an existing TV ad on YouTube, marketers provide an inexpensive way for more customers to view the ad after its original air-date.
What Are the Latest Trends in Social Media Marketing?
As companies increase their investments in social media marketing, they’re seeking ways to make it simpler and more effective at reaching customers. Here are some tips to take advantage of the latest social media trends to get the biggest bang for your social media spending:
Pick your battles. Most marketers realize that their companies don’t need a presence on every social media platform, just a strong presence on the few that make the most sense given the company’s target market. For example, in the Social Media Examiner study, more than 80% of marketers said they had no intention of marketing on Snapchat, and more than 60% had no plans to use Vine.
Less popular social media platforms tend to be more popular with marketers who are truly dedicated to social media. Marketers who spend at least 40 hours a week on social media are 42% more likely to use Instagram, 25% more likely to use Google+ and 28% more likely to use Pinterest than those who spend six hours or less on social media weekly.
Maximize your reach. Simply getting a customer to “like” your company may not be enough to generate sales or brand exposure. For example, whether Facebook posts will reach your company’s “friends” is a function of the platform’s proprietary algorithm. And with so much news and other content flooding customers’ social media accounts, it’s possible that your updates will simply get lost in the shuffle.
The most popular social media platforms now sell social media ads (called “native ads”) that look like normal posts, not paid advertisements, and appear at the top of their customers’ updates. Many companies plan to buy these ads. For example, more than half of marketers expect to spend more on Facebook ads in 2015, and about one-third plan to spend more on Google+, Twitter and LinkedIn ads. But doing so reduces the cost advantage of social media marketing.
Other companies plan to switch to less popular social media platforms, such as Instagram or WeChat, where their free posts are more likely to get noticed.
Measure your results. Increasingly, marketers are being asked to justify their budgets by computing a return on investment for each marketing program. But quantifying the results of social media efforts have historically been problematic. It’s easy to estimate the number of customers that follow your company on Facebook or Instagram. But how much are those followers buying from you — and what direct influence does social media play in their purchasing decisions?
Software companies have responded by creating analytics programs that identify which platforms generate the most traffic to your website — and more sophisticated ones can even track an individual customer’s behaviors after viewing your social media posts. As a result, marketers may be able to assign a real dollar value to leads and purchases generated from social media marketing (although some companies, such as health care entities, may have legitimate concerns about privacy issues related to monitoring customer behaviors). For help computing the return on investment for your social media marketing efforts, contact your financial adviser.
Expand your social media interactions. The easiest way to link social media marketing to revenue is to allow customers to purchase products directly on your social media page or app, rather than requiring them to click through to your website or call a salesperson. Some social media sites have already allowed peer-to-peer monetary transfers; the next logical step is business-to-customer transactions.
For example, Snapchat recently launched Snapcash. If this function is expanded to businesses, it may provide a simpler alternative distribution channel for companies to sell their products. And as an added bonus, direct monetary transfers could eliminate fees charged by credit card companies.
Some companies are also testing the idea of using social media forums as a way to facilitate customer service. Customers appreciate the quick response of social media, but some complaints may be too sensitive or complicated to discuss on social media forums. In those cases, the blogger would provide a temporary phone number that links the customer directly with a customer service rep.
How Does Your Social Media Program Measure Up?
Social media marketing is constantly evolving and can be time consuming if you make regular updates. But it also can be a cost-effective way to build brand awareness and customer loyalty. The keys are to follow the social media habits of your target market(s) and to focus efforts on maximizing your return on investment to those demographics.
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Brought to you by: McClanathan, Burg & Associates, LLC