Social Media ROI and the Junk in My Garage

Thomas Marks brings years of marketing experience to his blog "It's All About Content" as the President and Managing Partner of TMA+Peritus. Prior to starting the agency in 1983, Tom was the VP of Marketing and Advertising for Bally Corporation in Chicago. He was also President of Bally's multi-million dollar in-house ad agency FFC Advertising.

Every spring I make the pilgrimage to our garage — well, not exactly a pilgrimage as much as a walk through the door — to take inventory of the massive amount of junk that has accumulated over the years. Amid the motor oil from the last century and trimmers and hedgers that haven’t seen a blade of grass in years, there they were. Four different saws. The last thing I remember sawing was the base of a Christmas tree, not exactly a job fit for four saws, and hardly falling into the logger category of work. In fact, the only logs I saw are the kind when I’m horizontal on the hammock.

But they did remind me of one of my favorite adages. A saying that rings true in just about anything we do. Measure twice, cut once. I’m not sure who said it, most likely a carpenter or a surgeon, but one thing’s for certain — it doesn’t apply to social media where we’re more prone to saying, “Just keep doing it, don’t worry about measuring it.” But all that has changed in the blink of an eye. So, if you’re a CFO, an analytics geek, or a marketer trying to grapple with social media and ROI, your ship has come in. And the captain of that ship is none other than TV ratings behemoth Nielsen Corporation who led the study in tandem with Facebook.

The report, titled “Advertising Effectiveness: Understanding the Value of a Social Media Impression,” essentially states that there is quantifiable lift when social media is used in conjunction with advertising. This was no slouch of a survey; it analyzed data from more than 800,000 Facebook users, 125 ad campaigns and 7 different brands. The study is quick to point out that advertising needs to be viewed in both a “paid” and “earned” context, which explains why the report begins with a listing of where respondents trust their selected sources of information. Not surprisingly, the top of the list at 90% is friends and peers, followed by consumer opinions posted online and brand websites at 70%, then editorial content at 69%, brand sponsorships at 64% and TV at 62%. Newspapers (61%), magazines (59%), radio and billboards (55%) are others on the list.

The study was based on the three different types of Facebook paid ads in an effort to measure recall, awareness and purchase intent. The three ads are:

  • Lift from a standard “Homepage (Engagement) Ad”
  • Lift from an ad that featured social context or “Homepage ads with Social Context”
  • Lift from “Organic Ads,” news-feed stories that are sent to friends of users who engage with advertising on a brand

Here are the results when paid ads were used in conjunction with social media, as opposed to just placing a paid ad or message: For the homepage ads, there was a lift in recall of 10%, in awareness a lift of 4% and in purchase intent a lift of 2%. For the homepage ads with social context, recall was up 16%, and awareness and purchase intent up 8%. Finally, in the category of organic ads, recall was up 30%, awareness up 16% and purchase intent up 8%.

The takeaway is this. Don’t just advertise and don’t just do random acts of social media. Concentrate on a blend of paid and earned media because both are measurable. And by the way, what ranked lowest among respondents’ trust in selected forms of information? Text ads on mobile phones at 24%.