Social Media Advertising: Show Me the ROI

Advertising on social media platforms is growing. Nielsen.com in January came out with its Paid and Social Media Advertising Report 2013, stating that three fourths of advertisers surveyed said they advertise on social media. What’s more, 64 percent of advertisers indicated that they intended to increase their advertising on social media in 2013.

Two takeaways:

  • Businesses are advertising on social media channels.
  • They plan to increase their advertising efforts this year.

But what about their return on investment? That is the proverbial million-dollar question.

The report added – no surprise here –- that the sellers of social media advertising prefer to use the ROI metrics of “likes/pins, click throughs and views,” while the buyers of social media advertising would prefer ROI metrics as “sales generated, brand lift and shares/reposts.”

Yet, according to the report, ROI metrics remain a “morass,” leaving “the industry unsure of paid social media advertising’s effectiveness. Two-thirds of advertisers surveyed said that paid social advertising ‘moves the needle when combines with other efforts, but [they are] not sure how to measure ROI.’”

If there were a way to put an actual dollar figure on the ROI of social media advertising, a large majority of respondents indicated that they’d increase their advertising on social media platforms even more than they plan to in 2013. But they would need to see a “clear link between social media advertising and brand lift.”

So, without a clear dollar or percentage figure for an advertiser’s ROI when it comes to social media advertising, what should be our takeaway?

Tellingly, Nielsen’s report stated that almost 40 percent (39 percent) of advertisers said they planned to move some of their offline advertising budget monies to advertising on social media in 2013 (this is regardless of any definite/concrete – ROI).

Our take? It’s obvious that the industry as a whole needs to slow down for a bit, take a deep breath and devise concrete measurement yardsticks that will – can – be at least used routinely, if not embraced, by buyers. Too many social media experts are too willing to, basically, say “social media can’t be measured; it’s too ephemeral and it can take weeks before results can be noted.”

We say that such an answer or attitude isn’t good enough. It can’t be – it shouldn’t be. Large sums of money are being spent each day and the sellers of this advertising space are saying “Nope, so sorry, can’t even begin to estimate what your ROI might be, let alone what it will be.”

Instead, we like the ROI as stated by The Economist’s Intelligence Unit, which in 2012 had this to say about the ROI of social media:

“Companies with a high level of social media engagement enjoyed an ROI four times higher than companies with no social media presence.”

There it is, an actual figure, an actual ROI.

Need more solid facts regarding your return on investment when it comes to social media? Then visit Webmarketing123.com and download our free report Dominate Google with Social Media Campaigns.