The typical American spends an average of 37 minutes per day on a social network site, making social the most popular online activity in the United States. That screams “marketing potential.” According to recent Gigaom research, marketers ranked social media as the second most effective way to effect brand awareness and customer retention, behind email. However, marketers have found ROI on social media spending hard to quantify. This brings us to the paradox mentioned in the report: Marketers are on track to spend more on social media marketing than on content marketing, email marketing, search engine optimization or any other digital marketing technique, yet they believe that it will be difficult to back up their investment with figures.
So why are marketers investing in social media if they can’t determine a specific ROI? As stated in the Gigaom report, social media is so prevalent among consumers in the digital space that brands must have a presence on social networks to keep up with consumer trends. Creating company profiles is not a particularly costly or complex process. It’s certainly valuable in providing a way to interact efficiently and effectively with customers. It doesn’t provide a demonstration of ROI or revenue generation, though.
“Acquiring customers in the digital era is like creating a mosaic: To achieve a beautiful outcome, companies need to find the right blend of tactics,” the report concludes. In the case of social, marketers can drive real revenue and demonstrate ROI by pairing social media marketing with a referral marketing program. The Gigaom report states that big spenders likely are willing to lay down big bucks for their social media campaigns because they can access tools that allow for analytics. With Extole’s platform in particular, tracking shares, clicks and conversions is simple, as is determining who your company’s best advocates are. A complete referral marketing program lets the marketer turn social media from an awareness platform into an acquisition channel, one that gives marketers visibility into every stage of the funnel.
So while customer retention may be “the first pillar of social media,” according to Social Media Today consultant Debra Ellis, there are certainly ways to leverage social for acquisition and conversion. For more of Gigaom’s recommendations about how to blend digital tactics, get the report, “Workhorses and dark horses: digital tactics for customer acquisition.“