Marketers doubt social ROI

04 October 2011

NEW YORK: Almost three-quarters of US companies now utilise social media to engage their customers, but a majority retain doubts about establishing the return on investment from this medium.

Chief Marketer, the trade title, polled 750 executives from clients and agencies. It reported 73% of firms featured social elements in campaigns, measured against the total of 64% registered in 2010.

A further 15% of businesses planned to become involved in this area during the next year, leaving just 10% that did not anticipate using this channel in 12 months time.

Where companies were leveraging social sites, 85% did so to reach potential buyers across multiple touchpoints, 60% simply reflected the behaviour of their target audience and 59% wanted to stimulate viral activity.

Another 47% cited moves towards "conversational" marketing, 46% thought customers "expected" a social presence or that this approach offered cost benefits, and 45% sought to connect with new demographics.

Some 91% of organisations are active on Facebook, falling to 77% for Twitter, 68% regarding LinkedIn, 61% for YouTube and 15% for location-based services like Foursquare.

Two-thirds of the sample hoped to drive website traffic via social media, while nearly half wished to generate leads and sales or identify and address brand "fans", the top three scores in this area.

For 29% of enterprises, the goal was to encourage opt-in to targeted messages, alongside 27% that desired to monitor brand reputation, and 26% seeking to secure greater numbers of followers.

However, only 47% of firms were "somewhat effective" at measuring results, and 40% were either "not very" or "not at all" effective. Moreover, 52% of the panel agreed it was "hard" to calculate ROI.

When ascertaining success, 60% of brands look to the number of fans they have amassed, 39% prioritise viral behaviour, 35% assess qualified leads and 30% turn to the dwell time recorded by their social content.

Just 25% track the incremental sales delivered through social media, and 18% conduct surveys covering brand awareness and favourability.

In a sign of social media's rising importance, a 14.7% share of inbound web traffic to official websites is now attributable to these platforms, up from 6.7% last year.

Data sourced from Chief Marketer; additional content by Warc staff