In this post we will cover:
- Why marketing budgets are increasing for social media spend, but not getting a measurable ROI
- Why gaining more fans on Facebook & Twitter is not the big opportunity for impacting the retailer's bottom line
- How bringing social networking into retail sites is changing the future of online shopping
According to a survey of marketing execs by Ad-ology, social media spend holds the largest budget increase of all marketing channels:
However, only 36% of marketers saw Social Media ROI as an important factor to pay attention to. Here are a few possible reasons why:
- There's no easy way to measure social media ROI given the landscape of current solutions. Efforts like creating Facebook Pages and Twitter accounts have primarily been used for branding and customer service purposes.
- Most marketers are still trying to find ways to gain and engage with more fans and followers, not tracking how those users are converting to actual sales.
- Like the wild, wild west days of the "dot con" where companies would spend blindly without business models, retailers are spending blindly on acquiring users on Facebook and Twitter without looking for measurable ROI.
- The explosion of social CRM solutions is confusing to most marketers, who don't know what tools they need or which metrics they can realistically track.
- Lastly, marketers are mystified in determining the ROI of social media efforts, but they are forced to rapidly expand budgets and lay out strategies. Retail marketers can't be blamed for going down this rabbit hole- it's up to technology innovators like Twig to pave the way.
We don't believe that the future for online retailers lies in turning Facebook pages and Twitter accounts into landing pages
With all the noise about Facebook and Twitter's skyrocketing growth, marketers are getting blinded into rapidly expanding budgets for their Facebook and Twitter presence - without measuring the ROI of their investments. By now we've seen plenty of examples by now of big named brands investing hundreds of thousands into creating applications and fan page tabs on Facebook, all with scarce adoption from their fans.
Consulting firms and Dev shops are taking advantage of this opportunity and cashing in big on the Facebook and Twitter hype by selling apps, widgets, and Social CRM tools for Facebook pages and Twitter accounts - all at the cost of inflated marketing budgets.
Expanding marketing budgets towards Facebook Pages and Twitter accounts shouldn't be driven by hype. While these strategies are working for the purposes of communicating with fans, branding, and customer service (to a much lesser extent), this is still a version of the traditional one-to-many marketing strategy like email marketing, banner ads, etc. We don't believe this strategy is the big breakthrough in leveraging social media.
Retailers can leverage their customers by enabling social activity on their site, allowing customers to be their mouthpiece
Social media is about platforms that make it easy for people to connect with each other and see real-time activity.
Retail sites can leverage social media by making it easy for customers to connect and communicate with each other around products using their Facebook and Twitter identities. Customers' activity gets distributed in the real-time streams on Facebook and Twitter, and their friends & followers click back to the retail site.
In turn, shoppers are able to satisfy their curiosity by discovering real-time activity of what others are shopping for.
This way, retailers leverage their own customer base to disseminate product links amongst their networks, rather than depending on building Facebook and Twitter accounts as another one-to-many marketing channel with no clear ROI. Since the links distributed on Facebook and Twitter lead directly back to the reatil site, retailers get significant measurable ROI - nothing mysterious or immeasurable.
Curious to what we're doing here at Twig? Ping us! We'd love to talk to you. bizdev@intwig.com
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