Why? Usually the wariness isn’t rooted in doubting the power of social networks—clearly they are extraordinarily popular and have changed how we interact—but rather in concerns about whether social media spends actually boost the bottom line.
For a while these worries were valid, since social success was often measured by achieving vague goals such as building “buzz.” However, a few recent developments have transformed the channel and made it extraordinarily important for CEOs to both understand and engage with.
So what’s changed? Basically, two (really big) things:
1. Measurement Has Significantly Improved
Social media has always been measurable to some degree. After all, basic engagement numbers (likes, retweets, etc.) are easily accessible on most platforms, and for a while there have been deeper insights available about things such as reach.
What has long been a struggle is connecting these numbers to ROI. It’s great to know that a Facebook post got X number of comments, but what often really matters for a business is determining whether that effort created new leads and/or increased sales.
Thankfully, marketers have been making major strides in measuring the ROI of their social media spends by using new tactics (such as advanced tracking URLs/customized landing pages) and new products from the major networks (such as posts that include direct actions).
According to a recent report from Social Media Explorer, there has been a big increase in ROI measurability in the last year alone: 30% of marketers surveyed now agree that they can measure the ROI of their social spends, and 7% strongly agree.
While that number is by no means perfect, it represents an 11% jump in the last 12 months, indicating that the problem is (finally) being solved at a large scale.
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2. Social Media Has Become Highly Effective in Reaching, Engaging, and Boosting the Bottom Line
Measurability is great, but it doesn’t matter all that much if the underlying channel isn’t large enough, targetable, and effective. Luckily, social networks have recently made major strides in each of these areas, as well.
Unlike other some other channels, scale hasn’t been a problem for social media—a number of networks have been growing at mind-boggling rates for a number of years. However, what’s changed is that the platforms have introduced highly effective ways to target (and retarget) very specific audiences.
Thanks to new tools from a few of the networks as well as third parties, it’s now possible to not only reach certain basic demographic groups via social media, but also extremely niche audiences based on very well-defined interests, geographies, and Web behaviors.
Moreover, the rollout of new products (such as enhanced video and image posts) has made it possible to engage these audiences on a much deeper level and convert online conversations into real sales and/or sales leads.
Put another way, social networks now have enough users, data, and products to allow almost any brand to reach almost any audience at scale, over and over. That’s why advertisers recently rated social as the most efficient paid media digital channel in a recent Neustar survey, far ahead of portals, networks, and exchanges.
Ultimately, these two changes—increased measurability and effectiveness—are by no means separate developments. Both are rooted in the same trends: social media platforms are maturing and are offering more sophisticated products, and marketers are adjusting their tactics to better utilize the networks.
What’s important to note is that there is much more evolution to come. The social networks are just beginning to find ways to allow access to their huge segmented audiences, and marketers are just starting to truly master the channel. For CEOs this means that social media is likely to become even more measurable and effective in the future, and therefore even more important.
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