Re­turn so­cial me­dia in­vest­ment

Finweek English Edition - - INSIGHT -

sti l l fairly new. How­ever, t here re­mains a lot of con­fu­sion about how to ef­fec­tively har­ness the power of so­cial me­dia and how to find out the im­pact that it has on your bot­tom line.

The beauty of so­cial-me­dia mar­ket­ing is that with new tech­nol­ogy, we now have ex­cep­tion­ally de­tailed data and an­a­lyt­i­cal i nfor­ma­tion that we can use to track, am­plify and lead con­sumer be­hav­iour bet­ter than be­fore and in real time. This is why com­pa­nies are al­lo­cat­ing hefty bud­gets and hir­ing so­cial me­dia mar­keters to gain bet­ter in­sight into their con­sumers’ be­hav­iour pat­terns.

As a re­sult, com­pa­nies of­ten feel the need to con­stantly seek out ev­i­dence of fi­nan­cial re­turn in or­der to jus­tify that mar­ket­ing spend. “So­cial me­dia, and dig­i­tal com­mu­ni­ca­tions in gen­eral, can be scru­ti­nised a lot closer be­cause we have the abil­ity to an­a­lyse traf­fic sources and – us­ing tools such as Google An­a­lyt­ics – in­ter­ro­gate how a con­sumer ar­rived at our prod­uct or ser­vice,” says Mike Shar­man, owner of Retro­vi­ral Dig­i­tal Com­mu­ni­ca­tions, whose clients in­clude Nando’s and SABMiller. “That be­ing said, com­mu­ni­ca­tion can only sup­port busi­ness ob­jec­tives, not lead them.”

The truth is that it is ex­tremely dif­fi­cult to put a mon­e­tary in­di­ca­tor on the re­turn on in­vest­ment (ROI) of so­cial me­dia be­cause if you’re look­ing at ROI in the tra­di­tional sense ([earn­ings – cost of in­vest­ment]/cost of in­vest­ment) it’s hard to de­ter­mine. To quote a re­port is­sued by McKin­sey & Com­pany in 2012: “There is no

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