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7 reasons you don’t need to justify ROI for Social Media Advertising

Submitted by Clyde DeSouza on Monday, 11 January 20106 Comments

Social Media ROI and socialnomics

Traditional Media Advertising is out; Social media platforms are in:

If you are one of those in Media and Advertising, having a rough day at the morning breakfast brainstorming sessions in your corporate boardroom or agency “creative den”, trying to convince the “suits” that they need to undo past thinking and make way for the revolution in how advertising and marketing will be done (pause for breath)… then take heart!

Here are 7 reasons to give them something to think about, when your asked that well rehearsed question: “What about ROI? how do we measure and justify ROI on this new fangled social media advertising thing”.

1) ROI becomes a need for justification when spending on Billboards, TV and Print than when signing up a Twitter account or starting a FB page. The investment for this is already part of the salary for one of the junior staff.

2) Does every penny have to count? When budgeting for traditional media, there is always unaccounted funds allocated as “misc”. The entire exercise of starting a social media campaign is LESS than the misc expenses.

3) ROI needed to be shown on traditional media, because of the amounts involved in creating it and the additional amounts needed if it was to be replicated. ie. the consumer cannot not replicate a newspaper… to spread the advert. All this has changed, Social media allows the consumer to “be” the advertiser in a huge peer-to-peer network. So why the insistence on ROI justification for something that you did not spend much on yourself, besides the effort to initially send out the tweet and create a templated FB fan page?

4) Take the latest success story of Social media. It is said to be the reason AVATAR crossed the 1billion dollar mark so fast. What did they do differently other than tweet, open an FB page (and some webcasts of interviews on the page) . Even a webcast is now less than the cost of a print ad in a national newspaper. Take a nokia / iphone and webcast for free on services such as Qik or Ustream.

5) A single employee with the help of  semi automated Twitter and Facebook posting software is all it takes to keep a social media campaign alive. The biggest thing to keep it successful is feeding regular tidbits and answering questions now and then to the fans online.

6) ROI is needed to be calculated and factored in, for PASSIVE media advertising and marketing. For Social media the rate at which a brand message spreads (viral) is the ROI.

7) The most important reason that ROI does not need to be justified – Each and every Social Media Campaign that has been started, can live FOREVER on the Internet, all it takes is a “re-tweet” to go viral again. Never before in the history of advertising was this possible.

This is where traditional advertisers and marketing people unfortunately (and I do get chastised a lot for saying this) have to re-learn all they know, and re-write the text books on advertising. It’s not only advertising and media platforms that have been disrupted (cliche)… other areas where marketing and advertising agencies have missed the boat is for example the missed opportunity for 3D ads in Cinemas, prior to the start of a 3D blockbuster. You have a captive audience, with glasses in hand, and no 3D advert playing.! It goes to show that there is a big gap between where the world is heading (the new generation) and where “established” methods of thinking and media is still at.

Advertising will be about convincing a few people (the niche) and letting the virus spread from there. We have to realize that 100 years of advertising and marketing has to be undone. Why? because in the past 100 years there was no dynamic media delivery platform as versatile as online Social networks. Take a page out of Dell’s book on how to treat Social Media. Advertising was always a passive medium. Today the audiences ARE the advertisers.

Socialnomics:

Socialnomics is something that was not on ANY economics or MBA course that was taught during this past decade. This is testament to the reason that some of the foundations of thinking, on advertising and marketing needs to be rewritten from 2010 onwards.  This short video introduction is worth watching, for every traditional advertising executive, account manager and marketing head who is questioning  or resisting change.

If you do have more reasons to NOT have to justify ROI on social media campaigns, please send them in below via comments.

  • http://www.swixhq.com/ Jad

    Great post! In your 6th reason, you mention that the rate at which a messages spreads is the ROI. If it's traditional ROI that we're talking about (not to say that non-financial returns don't matter), isn't it important to link social media metrics to conversions (like sales on a landing page)? We do SM ROI, feel free to check us out at http://www.swixhq.com/.

  • clydeD

    Jad, thanks for dropping by. You make a good point. I took a brief look at your website, and the video. I like the clean look of the application that is featured. Will certainly bookmark and look at it in-depth. It is a worthwhile product.
    Wish you the best!

  • http://www.swixhq.com/ Jad

    Thanks a lot, we'd love to hear more of your feedback when you get a chance to take a closer look at the app. All the best!

  • http://ww.netcarnation.com/ Rajesh

    Interesting post, Clyde. ROI is always a tricky issue. I always wonder how those signboards on the way to airport justify ROI for brands? Is n't that simply branding which cannot be measured tangibly?

    Thanks for sharing valuable insights.

  • clydeD

    Thanks Rajesh! Your right about those outdoor billboard, virtually useless unless your stuck in traffic!

    On one of the LinkediN forums there is an active debate going on about the logic behind Pepsi's move to pull out of the SuperBowl ad and dedicate efforts and resources to a Social Media driven campaign instead.

    I copy ad-lib, my take on it below, trying to explain what SM is and what it is being confused with:

    * The problem I see with traditional marketers and advertisers is that they are looking at this whole SM thing myopically, that is why the resistance, and it seems to go against what has already been established for all these 100 years as the definition of “media”. SM is not media in the traditional marketing/advertising sense… SM is “part” of a new media platform called Digital Media.

    * What pepsi is doing is actually SWITCHING platforms from traditional media (video billboard at Superbowl) to Digital Media!

    * Digital Media is a beast to understand, but here's a simpler way of looking at it. It seems complicated to comprehend because never before in the history of advertising has a Media platform been so versatile – It can reside as a tangible entity (such as a video billboard driven by Digital content), it can be intangible such as floating out on the internet “cloud” ..ready to become tangible again in the hands of a user with a smart phone.

    You see the chameleon like possibilty of advertising this way? Social Media is just a “Skin” ..one of the “skins” for presenting Digital Media advertising.

    It goes deeper, Yes it is about creating a buzz, with the SM route that Pepsi is taking, they have the capability of turning EVERY blackberry and smart phone “billboard” in the hands of consumers into a miniature SB digital screen.

    the only thing they are doin is not paying the “premium” of renting physical space on the main SB billboard.

    Someone said earlier said in this thread ….”Conversations. I know this comes out of CRM to imply interactivity. But, there really isn't much conversing going on. As one example, in Twitter, the average user has posted ONCE in their entire time on Twitter. That makes it a broadcast medium. How many times does the average Facebook “friend” of a commercial FB profile send TO that friend? I'll be it's similar to Twitter (with a few exceptions). “……..

    The beauty of these Digital media “skins”, FB, Twitter, SM as a whole is that you don't need to “keep” on broadcasting.. That's the old advertising mentality… that it will die out. In Digital Media advertising, once is enough, per person… it carries on as this is the only media platform in the past 100 years that has the capability of making the Audience the advertiser . It is a huge peer-to-peer network. Even if they posted once (that's exactly how i started) the platform is there to return to, within a week, a month. or a year . NOT so with traditional media platforms. It gets rented out and the “slot” is taken.

    Finally the biggest thing about SM / Digital advertising… to replicate, i.e do a re-run in traditional media, it will mean re-budgeting the whole damn thing, buying media space etc…

    In Social Media or digital media.. it's a “Re-Tweet” to go viral again.

    * edit ******* lol, Brian, I think we posted at almost the same time!

    Kind Regards
    Clyde

  • Anonymous

    Thanks Rajesh! Your right about those outdoor billboard, virtually useless unless your stuck in traffic!

    On one of the LinkediN forums there is an active debate going on about the logic behind Pepsi’s move to pull out of the SuperBowl ad and dedicate efforts and resources to a Social Media driven campaign instead.

    I copy ad-lib, my take on it below, trying to explain what SM is and what it is being confused with:

    * The problem I see with traditional marketers and advertisers is that they are looking at this whole SM thing myopically, that is why the resistance, and it seems to go against what has already been established for all these 100 years as the definition of “media”. SM is not media in the traditional marketing/advertising sense… SM is “part” of a new media platform called Digital Media.

    * What pepsi is doing is actually SWITCHING platforms from traditional media (video billboard at Superbowl) to Digital Media!

    * Digital Media is a beast to understand, but here’s a simpler way of looking at it. It seems complicated to comprehend because never before in the history of advertising has a Media platform been so versatile – It can reside as a tangible entity (such as a video billboard driven by Digital content), it can be intangible such as floating out on the internet “cloud” ..ready to become tangible again in the hands of a user with a smart phone.

    You see the chameleon like possibilty of advertising this way? Social Media is just a “Skin” ..one of the “skins” for presenting Digital Media advertising.

    It goes deeper, Yes it is about creating a buzz, with the SM route that Pepsi is taking, they have the capability of turning EVERY blackberry and smart phone “billboard” in the hands of consumers into a miniature SB digital screen.

    the only thing they are doin is not paying the “premium” of renting physical space on the main SB billboard.

    Someone said earlier in this thread (on LinkediN )….”Conversations. I know this comes out of CRM to imply interactivity. But, there really isn’t much conversing going on. As one example, in Twitter, the average user has posted ONCE in their entire time on Twitter. That makes it a broadcast medium. How many times does the average Facebook “friend” of a commercial FB profile send TO that friend? I’ll be it’s similar to Twitter (with a few exceptions). “……..

    The beauty of these Digital media “skins”, FB, Twitter, SM as a whole is that you don’t need to “keep” on broadcasting.. That’s the old advertising mentality… that it will die out. In Digital Media advertising, once is enough, per person… it carries on as this is the only media platform in the past 100 years that has the capability of making the Audience the advertiser . It is a huge peer-to-peer network. Even if they posted once (that’s exactly how i started) the platform is there to return to, within a week, a month. or a year . NOT so with traditional media platforms. It gets rented out and the “slot” is taken.

    Finally the biggest thing about SM / Digital advertising… to replicate, i.e do a re-run in traditional media, it will mean re-budgeting the whole damn thing, buying media space etc…

    In Social Media or digital media.. it’s a “Re-Tweet” to go viral again.

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