Social media campaigns are one of the hottest ways for companies to promote their products and services to potential customers. It is becoming the hallmark of many branding efforts. Everyone agrees that social media marketing is important.
But, what nobody is sure about is exactly how important it is, and what parts of a social media campaign deliver the most value. Data is beginning to emerge, but there has yet to be any consensus as to the real value of a tweet, a Facebook “like” or a Facebook “share.”
The problem is the methodologies being used to determine the value of a social media connection. Companies are looking at the value for their own business – but each business is different. For example, if your company is selling toys that cost $2.99 each, the value of a like or retweet that results in a purchase will be lower than if you are selling $75,000 sports cars.
There has yet to be any data that is valuable across various industries. And, it would seem that the ROI in a given social media campaign is still something that has yet to be quantified over the retail market as a whole.
For example – imagine a gas station that simply puts up a sign telling people to follow them on Twitter or Facebook. This costs them nearly nothing. If they sell two tanks of gas from that effort, they have made a profit. Now, imagine that a car company spends $10,000 on Facebook ads to direct people to like their Facebook page. Which company is going to get the better ROI? This has yet to be studied.
In addition, the methodologies used to generate data are focused on the primary marketing goal – making an immediate sale. But every retailer really has three goals from a social media campaign. The top priority is making a sale, the secondary priority is getting contact information, and the third priority is to at least get a like or a follower so that you can use future marketing efforts to accomplish one of the first two priorities. Until data has been analyzed showing how social media affects all three of these goals, then the data is not giving companies a complete picture.
At Spring Metrics, we are gathering our own data to measure the effectiveness of tweets, likes and Facebook shares over the next couple of months. Our goal will be to demonstrate exactly what kind of return on investment companies can expect from different social media actions – and how to measure the effectiveness of different campaigns.
We are doing this because we believe that social media is an incredibly valuable marketing tool. After all, since the beginning of time nearly all commerce has been social in one way or another. Long before the existence of social media or even the Internet, people have been much more likely to purchase products that were popular or liked by their friends.
Social media therefore simply streamlines the ever-present social aspect of commerce – meaning that its effects will not be a fad. It is here to stay, and must be understood.
When our results are completed, we will share them on this blog. In the meantime, we thought it would be helpful to talk about some of the data that is out there so that companies have a baseline to work with when thinking about social media campaigns.
The ticket sales company Eventbrite did their own internal study on the value they got from people sharing links to their events on both Facebook and Twitter. What they found was that each Facebook “share” resulted in $2.52 in ticket sales. That was a far better result than the 43 cents worth of ticket sales that were generated for each retweet on Twitter. However, that gap is closing, very interesting data here.
There are a few thoughts out there as to why this may be the case. People who share an event on Facebook are more likely to be actually going to the event which makes it more likely that their friends will want to but tickets to go with them. People on Twitter, on the other hand, are less personally involved with the people they “follow” and less likely to know the person in the real world. This means that a retweet is less likely to spur a ticket sale.
This study is, of course, very specific to the event industry. It is highly probable that companies in other industries would see different overall results.
A similar study of their own metrics was recently released by ChompOn – an online coupon company that competes with Groupon. Their study also showed that Facebook shares seem to have more value than retweets but at a much larger scale. There are infographics from the study, but a more complete look is here.
ChompOn said their data showed that a Facebook share had a value of $14 while a retweet only had a value of $5. Their metrics went further than Eventbrite. They determined that the value of a Facebook “like” is roughly $8 and a Twitter “follow” is roughly $2. I wonder if that gap is closing since the study as well?
Keep your eye on this space while we continue to examine this emerging science. We are dedicated to helping our customers get the most out of their social media efforts, and will have the data companies need to make the best decisions about where to concentrate their campaigns.