November 16, 2009How to increase your social media ROI

ROI (return on investment) = (Payback – Investment) / Investment

It’s simple. Spend less money.

But hang on — if you spend less, won’t your payback fall too? Couldn’t your ROI actually fall if you stop spending money on social media marketing?

Of course it could. But that’s where most people are missing the point of social media. I don’t think there’s any specific correlation between the size of your investment in social media and the returns you get. Of course, if you spend more money putting your face out there, the chances are you’ll get noticed more. But it’s just that — a chance.

So what you need to do is find a way of spending less while still getting the same returns.

It’s difficult to measure social media ROI. But one thing’s for certain:

Increasing your chance of getting noticed isn’t the same as increasing your social media marketing spend. There is little to no correlation between the two.

Social media acts differently to traditional advertising mechanisms in that you, yourself, aren’t doing most of the marketing. What’s more important to you? That you have a regularly updated twitter feed or facebook page, or that you have a thousand followers? You can pay someone to regularly update your twitter feed. But you can’t pay a thousand people to follow you. Well… you could… but you’d be missing the point!

Unlike traditional advertising, where the more you spend, the more “airtime” you get, the bigger your advert or the longer it runs, etc, the point of social media is that people do your marketing for you.

So how do you get noticed?

The only worthwhile investment targeted at social media is good creative.

If you want people to blog about, tweet about, or simply share your message, you’ve got to give them an incentive. Only a good creative can come up with an inspired idea for a video that goes viral. Only a good copywriter can come up with a message that people want to pass on. Only a good designer can come up with an image that sticks in people’s minds.

If you spend thousands promoting yourself via social media, think again. Sure, you need to spend some money promoting yourself, getting your face, your name — your brand — out there. But the less you spend actually marketing yourself, the better. Good creative will provide you with a message that your customers will pass on to each other. It’s the only worthwhile spend there is.

So by all means cut back on your social media budget. There is, after all, good evidence that social media isn’t all it’s cracked up to be. But it’s not just a case of investing less. It’s a case of investing smart. Creative is the way to do that.

A strategy for success:

Produce less content. Spend less time actively marketing it.
Spend money creating content that actually gets people talking.

Good content will market itself.

Simplify your online presence. Invest in good creative.

I’ve blogged before about how the forthcoming election will represent a paradigm shift in the advertising industry. Elections influence the advertising world for years to come, in the same way that wars create demand for new weapons… election campaigns force us to regularly re-evaluate marketing strategy. It’s a compressed period of time, a testing ground where we can quickly figure out what works and what doesn’t. The forthcoming election will be almost entirely about digital media. Whoever comes up with the most rebloggable, retweetable, viral content will win the advertising war.

Political blogger Iain Dale seems to think so too. His comment about Labour’s new poster campaign being almost totally irrelevant says it all:

No political party worth its salt spends any money on poster campaigns any longer. They don’t need to because the marketing can be done virally, for free.

It’s those last four words that count.

Marketing can be done virally, for free.

When it comes to social media, the only worthwhile spend is on good creative.

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