I spent an hour talking with him on the phone and picked his brain about a variety of topics. One topic we got on was one that I had been thinking about quite a bit since delving into social media marketing, and I think it's a topic that, from what I've noticed, could use more emphasis: ROI, or return on investment. On the surface, it would seem that ROI would be at the forefront of most social media marketer's minds. After all, what good is promotion if there's no emphasis on monetizing it? I'd be willing to bet it's the only thing most CEOs and CFOs worry about, so why not at the marketing level, as well? Your job may well depend on it.
Brand promotion is great, and to me, it's one of the first steps that needs to be taken in order to get money to start rolling in. But if there's no strategy to that end, brand promotion efforts through social media are largely worthless. With my background in newspapers, I can see this being a huge problem for the industry. Newspapers are failing throughout the world, and no one has figured out a way to make money off the Web as content distribution becomes more and more digital. Most newspapers have implemented a social media strategy, and I think that's great. The New York Times this year created a social media department to help handle content distribution through social media avenues. But there's very little potential for return on such an investment. The Times has a strong following in the first place, and its implementation of social media strategies has earned the paper quite a few Web followers on Facebook and Twitter. But I'd be interested in seeing how much money is actually coming in through backlink clicks to the Times' Web site. That's not just a New York Times problem; it's a newspaper industry problem. And I use The Times as an example because it has completely devoted itself to using social media in a way that will redefine how its readers get their news. But newspapers have to solve the issue of how to make money on the Web before they can really see anything that resembles a ROI, especially those newspapers that have created new departments dedicated to social media.
Other industries aren't facing that type of problem. Most have some sort of product or service to promote that people can buy with real money that creates a real ROI. But the question I think most social media marketers needs to ask is whether or not the implementation of such a strategy is completely optimized. Are they making it as easy as possible for people to buy a product or service, or are they marketing for the sake of marketing? For example, if I'm using Facebook and Twitter to sell a book, where am I backlinking potential customers to? Do I backlink them to my homepage? Or do I backlink them to an order form that allows for easy buying while also providing a lot of great information about what's in the book I want them to buy? By taking clicks out of Point A to Point B (which is ultimately a consumer inputting their personal information and clicking the submit button), marketers can optimize the chances that a clickthrough will turn into real, live cash. The point is to make it as easy as possible for people to invest in your product or service. While simply pointing people back to a static homepage is a great way to promote and get people to learn more about the product or service you're offering, it's limited in terms of ROI since you're depending on users to navigate themselves to a page where they can actually buy your product or service. It seems like too big of a risk to take.
So, I'm interested in how you or your company implements a social media strategy with ROI in mind. How much emphasis is placed on ROI on a daily basis? Are you challenged to think in ways that will optimize ROI? Most importantly, what do you think can be done differently to improve ROI?
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