Marketing taken seriously?!
Current perception of marketing all too often is inextricably linked to advertising, branding and creativity. For marketing’s declining reputation to be improved, it increasingly needs accountability and a closer link to tangible business benefits and financial objectives. This was the key finding of recent award-winning research by Verhoef and Leeflang of Groningen University, the Netherlands.
As new, promising kid on the marketing block, social media need to be accompanied by tangible ROI to be taken seriously by senior decision makers. As Calibrero’s Ewald Jozefzoon illustrates, sometimes ROI in social media seems to be replaced by eg ROE. Return on Engagement is defined as “the measurement of involvement in social media based on online interactions and relationships.”
Hard or soft ROI
It’s better, ‘cause it’s new. Isn’t that almost how some fast movers promote their new toothpastes, washing powders and detergents? As new element in the marketingmix, web 2.0 or social media are receiving an ever-widening audience and bigger attention. And a lively discussion is emerging as to how to measure their actual business benefits.
Tech Crunchies take the softer ROE stance, emphasizing the need for social media engagement and relative lack in control of who one reaches, when. In a recent blogpost they do include a handy overview of ‘All Social Media statistics and Facts’ that, quite consistently, largely falls in the ROE segment as well.
Even @equalman | Erik Qualman, emphasizes the value of Socialnomics predominantly in terms of means or inputs rather than business and monetary ends. He thereby confirms that social media in essence embody a new, highly successful channel, intelligence and communications instrument with a phenomenonal penetration speed.
Value of social media
Don’t get me wrong. I love social media as – depending on the time of day – the digital 2.0 equivalent of an inspiring newspaper or an Irish pub. I equally welcome trials and experiments in social media to separate best from worst practices and to refine its discipline. From that perspective, I’m inclined to supporting the notion by @MktgROIorDIE that “many of the activities of creating soft ROI are often stepping stones in achieving hard ROI.”
Over the next months and moving into 2010 I will be trying to uncover best practices in B2B, resulting in a tangible, measurable financially-sound ROI. I will also be keen to jointly discovering new insights to properly/ best (re)defining the return of social media. This might refer to either improving a company’s bottomline by leveraging cost efficiencies or its top line growth. And, with the relatively smaller customer base in B2B, what tangible contribution is the adoption of social media bringing to enhancing customer lifetime value? Your feedback, suggestions and experiences are highly appreciated!
Paul, this is a great blog. Already got me an email subscription… I fully concur with the conclusions in the Verhoef and Leeflang research you mentioned (do you have access to the full paper?). Innovation and Accountability are absolutely key to marketing remaining (or becoming) a sustainable commercial force.
Social media offer marketers plenty of opportunities for innovation today. From my personal experiences I can say that social media offer new and exciting ways to effectively reach and engage with very focused target audiences – both in terms of cost and efforts.
There are two points I’d like to make in response to this blog:
1. Let’s not exaggerate the importance of social media to the point that we see them as a substitute for traditional offline and online media. Remember Volvo’s expensive lesson back in the days that online advertising was the “new promising kid on the marketing block”: Around the beginning of this millennium, Volvo launched their ‘ReVOLVOlution’ campaign. In developing this campaign, Volvo was the first company ever to roll out a webvertising-only campaign, which ultimately failed dearly. For maximum marketing impact and effect, social media should be complemented by other media (offline and/or online) as part of an integrated strategy.
2. Just because you can track all responses and behaviour in full detail doesn’t mean that social media are the answer to Verhoef and Leeflang’s second key marketing challenge – accountability. The accountability that is required from marketers should address the return on marketing investments – Marketing ROI. As I say in many of the articles I’ve published, ROI is an accounting valuation method. Therefore, marketing ROI should produce a monetary value. ROE is a great method to measure and monitor the occurrences and qualitative data related impact and effect of social media. In itself, this data provides no insights in the monetary value being generated. Therefore, let’s not confuse ROE with ROI.
Paul, I welcome your keenness to a healthy exchange of insights and practices related to these topics. And I’ll reciprocate where possible. I look forward to your next posts.
Paul, this is a great blog. Already got me an email subscription… I fully concur with the conclusions in the Verhoef and Leeflang research you mentioned (do you have access to the full paper?). Innovation and Accountability are absolutely key to marketing remaining (or becoming) a sustainable commercial force.
Social media offer marketers plenty of opportunities for innovation today. From my personal experiences I can say that social media offer new and exciting ways to effectively reach and engage with very focused target audiences – both in terms of cost and efforts.
There are two points I’d like to make in response to this blog:
1. Let’s not exaggerate the importance of social media to the point that we see them as a substitute for traditional offline and online media. Remember Volvo’s expensive lesson back in the days that online advertising was the “new promising kid on the marketing block”: Around the beginning of this millennium, Volvo launched their ‘ReVOLVOlution’ campaign. In developing this campaign, Volvo was the first company ever to roll out a webvertising-only campaign, which ultimately failed dearly. For maximum marketing impact and effect, social media should be complemented by other media (offline and/or online) as part of an integrated strategy.
2. Just because you can track all responses and behaviour in full detail doesn’t mean that social media are the answer to Verhoef and Leeflang’s second key marketing challenge – accountability. The accountability that is required from marketers should address the return on marketing investments – Marketing ROI. As I say in many of the articles I’ve published, ROI is an accounting valuation method. Therefore, marketing ROI should produce a monetary value. ROE is a great method to measure and monitor the occurrences and qualitative data related impact and effect of social media. In itself, this data provides no insights in the monetary value being generated. Therefore, let’s not confuse ROE with ROI.
Paul, I welcome your keenness to a healthy exchange of insights and practices related to these topics. And I’ll reciprocate where possible. I look forward to your next posts.
Ewald, thank you for your comprehensive comment – much appreciated. By email I’ve sent you more background on the Verhoef/Leeflang research. For more information on #CIC, see http://ow.ly/MYmD
Hi Paul, we are engaged in a B2B Social Media Campaign with tangible ROI goals, and on a no cure no pay basis. I would be willing to share and exchange experience and knowledge. let me know.
greetz, Hans
Thanks Hans, I appreciate your suggestion – I look forward to sharing insights and experience and will be contacting you shortly.
Ewald, thank you for your comprehensive comment – much appreciated. By email I’ve sent you more background on the Verhoef/Leeflang research. For more information on #CIC, see http://ow.ly/MYmD
Paul – I think “soft” measurements of ROI or ROE create endless debate with regards to reality and helping the bottom line. We must have real, tangible relationships between effort and result. Take a look at “Social Media Conversion and the Social Media Marketing Funnel” at http://bit.ly/dsPrq and instead of drawing a relationship of social media effort to sales (after all roi = (sales-investment)/investment), look at the tangible result of social media for each step through the social media marketing funnel. These are real, tangible parameters that can be measured.
Social Steve
Paul – I think “soft” measurements of ROI or ROE create endless debate with regards to reality and helping the bottom line. We must have real, tangible relationships between effort and result. Take a look at “Social Media Conversion and the Social Media Marketing Funnel” at http://bit.ly/dsPrq and instead of drawing a relationship of social media effort to sales (after all roi = (sales-investment)/investment), look at the tangible result of social media for each step through the social media marketing funnel. These are real, tangible parameters that can be measured.
Social Steve
Hi Paul, we are engaged in a B2B Social Media Campaign with tangible ROI goals, and on a no cure no pay basis. I would be willing to share and exchange experience and knowledge. let me know.
greetz, Hans
Thanks Hans, I appreciate your suggestion – I look forward to sharing insights and experience and will be contacting you shortly.