Social Media – Worth a Shot?

I read an interesting article in the Wall Street Journal last week entitled “Entrepreneurs Question Value of Social Media” by Sarah Needleman. The short article discusses the spectrum of social media marketing success and failures across small businesses. In particular, a survey conducted by University of Maryland’s Smith School of Business and Network Solutions LLC regarding the business impact of social media found that:

53% broke even

19% lost money

22% made a profit

There is no question that social media is still an evolving world – no one really has a “magic formula” to drum up business. By definition, “social media” is a platform for brands and companies to have a much more personal interaction with the world and, as such, some brands, products and companies may just have a better story tell or more interesting product that attracts more attention. There is no question, that some common sense principles apply to successful social media (which I would argue apply to almost all forms of advertising):

1. Planning: put in the time to plan strategically upfront – what do we want to accomplish and how will we measure success?
2. Frequency: the more you broadcast your message, the more likely it will be seen and have an impact
3. Engagement: if people engage/respond, you need to do the same
4. Create value: no one likes to be spammed (and no one responds to an ad that doesn’t do anything for them) – understanding your audience and what they find valuable is critical
5. Multi-platform interaction: if your customers consume it, you should create it: photos, videos, blog posts etc.

But common tenets aside, what I find interesting is the simple fact that these businesses could report so specifically about returns/losses on social media efforts! The best part about online advertising still also seems to be its Achilles heel – its innate wealth of data and information means that it can be scrutinized extremely closely. And those interviewed in the article certainly do so – attributing their personal analyses directly to increases/decreases in online sales.

For traditional media, then, where are the same metrics? At a minimum, the fact that online (and social media) advertising is so accountable must inevitably create significant advantages for business owners in terms of understanding returns on invested marketing dollars.

For our part, we’ve seen social media produce financial returns on investments for our clients – it’s all about installing the right tracking mechanisms and following the simple tenets of social media marketing. By no means is social media immune to failure but, given the ease of analysis, it’s something I believe nearly every business should at least try.