For years, marketers were led to believe that measuring social media return on investment was not only possible, but also required. Directing customers to a website where they can make a purchase is something companies can easily track. If you spend $1,000 to promote a Facebook post and generate $1,500 in revenue from your ecommerce store from that post, you can easily calculate your ROI.
For quick-serve restaurants and fast-moving-consumer-goods brands, where transactions happen offline and digital advertising budgets are dwarfed by offline advertising and sponsorships, attributing spend on social media to sales is virtually impossible–no matter how much data you can access.
It’s perhaps this easy access to mountains of data that causes anxiety among marketers. There are so many data points available, surely there must be some way to attribute a like, share or click to a purchase–and if not directly attributable, at least a correlation. When tens of thousands of people like your content, marketers and data scientists push Excel sheets to their limits to find correlation amongst the numbers.
I believe that many in marketing have been tricked to believe that access to more metrics means that a social media ROI formula can be found. For decades, the world’s biggest brands spent hundreds of millions of dollars advertising in the real world. They would be able to track uplift in revenue for each campaign, and although they knew that only 50 percent of their advertising was working, they were hard-pressed to identify which 50 percent.
But there was a correlation: More advertising = more reach = more sales. It was an accepted fact.
When customers could suddenly react to that advertising, like social media allows people to do, many marketers scrambled to find meaning in all of the numbers beyond just a simple correlation.
However, even former Facebook India managing director Kirthiga Reddy thinks marketers have got it all wrong. Instead of worrying about what the exact return is on every dollar spent on creating and promoting content, Reddy says, “The parameters of success are the same across media: reach, frequency, placement and impressions.”
Today, brands are falling over themselves to be on, and advertise on, Snapchat. About one month ago, advertising on Snapchat cost a brand $500,000. Today, brands need to drop $100,000, which is still a hefty chunk of change for all but the largest brands.
What will a brand get for this advertising cost? Application downloads? Pushing people to buy something from a website? Getting an email address? Nope: They get views. How many people have viewed your story is the only metric Snapchat provides.
Does that sound familiar? This is exactly the metrics brands look at in traditional mass media advertising.
Is it not ironic then that when reporting metrics are limited to views or reach, brands automatically view the marketing channel as a platform to gain visibility, but when many metrics are available, the marketer believes that the platform should be a revenue-generating one?
I’m perhaps a little bit too old to be on Snapchat, but the fact that many brands are embracing it as a way to reach (that’s the key word) millennials is encouraging. My hope is that marketers’ mindset towards content on Facebook, Twitter and other platforms shifts from being judged on its transactional value to a place where real branding takes place to reach the right audience.
Image courtesy of Shutterstock.