Again and again our customers wonder how to calculate the ROI (return on investment) for Social Media Marketing. The answer is not what you expect.
We had that question again and again and so we decided to hire a consultant to know what other companies (in Japan) promise their customers as for ROI.
Our consultant took over a week and the results where so interesting. He said:
“According to my research, the calculation of ROI is … what your customers please.
The companies I investigate and personally talk with, gave me different calculations and ensure different results ranging from 20% to 200%. ..
therefore, my conclusion is that that there is no correct approach to make a calculation of ROI in Social Media Marketing”
“ROI on traditional marketing is already very hard to calculate and so it should be harder to give accurate specifications on a marketing technique that depends on social trends, general perception and so many more facts will have to be consider.”
Our customers mention that we have had positive changes since they started having our marketing services, specifically in popularity, public relations and visits to its online catalogs, website and promotions. Sales have generally improved but we can not calculate the direct relationship with a solid formula.
Other customers have also had an improvement in sales but again, there is too much data with too many different facts that have to be analyzed in a long period of time.The best way to have measurable ROI and successful marketing improvisations is by having ongoing campaigns and promotions for sales and branding purposes, followed by a good public relations support. ROI will come out after analyzing the results and making good constant corrections.
The half million yen marketing campaign that gave 0 returns.
This conversation reminds me of a marketing disaster story.
A friend of mine has been running a car customization business for over 15 years. A distant cousin of him once contacted him to offer a once on a lifetime advertising offer.
My friend’s cousin was working on a local newspaper that had a cancellation for a whole half page advertising from a big company.
He offered him that whole side of the Newspaper on a Sunday publication for a ridiculous price.
My friend couldn’t believe his luck and immediately started working on a promotion campaign for his car systems, accessories and other services. All this on a great design with a fantastic photo background.
You already read the results. He got Zero calls nor any other type of inquiry about his well planned advertising campaign.
And that is a great example on the difference between Social Media Marketing and Traditional Marketing.
Traditional marketing might have a great impact but it is now always guaranteed and same as social media marketing, ROI depends in too many facts to calculate.
Besides, the costs of one Newspaper advertising campaign could have been accurately used for a 3 month social media marketing campaign.
More about (Facebook) ROI on Social Media Examiner: http://bit.ly/1dyjmnz