The Cost of Not Entering into Social Media – How it Hurts Your Company (Part Four & Final for Now…)
February 11, 2009
In wrapping up our discussion on the cost of not entering into Social Media – How it hurts your company, we want to discuss something that every CEO and CFO can appreciate – ROI, or in the case of Social Media – ROP (Return on Participation).
At best, the tracking of traditional media – PR and advertisements being tied to audience numbers has always been sketchy at best.Traditional media campaigns rely on the amount of people who actually see the ad. Think about the companies that buy a full page spread in The Wall Street Journal or N.Y. Times. What do you think that costs? According to information provided: a full page ad in The Wall Street Journal costs around $175,000 (according to www.wsj.com). A 30 second commercial costs around $350,000, Billboards are around $25,000/year and Radio ads run around $5,000/week (according to a Clear Channel sales rep). Note: rates based on date of this posting and may be subject to change.
So how do you measure the success of these massive costs? Traditional media relies on one way communication with as many people as possible, but then what? Our attention is decreasing, now, more than ever, it’s easy for us to ignore ads. Your TV commercial is only good if it isn’t Tivo’d out.How do you track the impressions of your full page ad in the paper or magazine?You can try to fudge some circulation numbers into a pseudo-percentage that you can hope is close, but there are still no tangible numbers, unless you tie it to an action.
Social media platforms themselves do not charge you to become a user (for the most part). In social media, here are some of the things we can measure. The majority of the cost falls under “time” or participation (unless of course you are building a micro-site or some sort of customized social media platform/game/etc.). Here is a list of some of the things we can measure:
1.SEO & traffic to a site, there are many ways to measure this i.e. referral sites, organic listings, inbound links to pages or sites, etc.
2.The amount of conversation/number of comments that you receive
3.You can track your overall brand image and work to change it if need be.
4.You can see the amount of times something is opened, shared with, or forwarded to other people
5.The number of sales or increase in revenue, you can track this by using analytics programs and setting up funnels/goals to track conversion points.
6.The number of dedicated subscribers/followers/people that want to engage and interact with you or your brand
Another thought – the real problem is that we measure traditional marketing programs the wrong way. Almost everything in traditional measurement programs is customer transaction-based – how much will it cost to get a customer to buy, once based on viewing a traditional media piece. What we really need to measure is the customer’s life-cycle value.This includes any repeat purchases, his/her ability to influence others in making buying decisions, and the value of their extended network.
Finally, most traditional media measurement analytics – is based upon reactive activity, rather than predictive. Too many companies are not measuring their customers to determine where their business is going, or how successful new product or service offerings will be.
So, after all of this, is your company still on the fence about engaging in social media?Why? Leave a comment and let me know.If they still are on the fence, I’m more than happy to come over and have a chat with them!