The Return on Social Media: Elusive and Difficult to Measure


In addition to asking respondents to quantify what their companies would spend this year on social media, we asked a related question: Have their investments to date in social media paid off? Did they have a positive or negative return, or did they not know the return on social media?

We found that there were more than twice as many respondents with positive returns (38%) as ones with negative returns (18%). Also, 32% hadn’t measured the return but planned to, and another 12% said they had not measured ROI and had no plans to measure it. (See Exhibit II-9)

Exhibit II-9: How Many Consumer Companies Have Positive Returns on Social Media Investments?

Exhibit 2-9: How Many Consumer Companies Have Positive Returns on Social Media Investments?

By region of the world, the picture of ROI varies markedly. Asia-Pacific respondents lead the pack in the likelihood to report positive ROI: 55% claimed they had gained, whereas there were only 35% of North American and 29% of European respondents with positive ROI. Asia-Pacific respondents were also less likely to have negative returns. (See Exhibit II-10)

Exhibit II-10: Asia-Pacific Companies More Likely to Get Positive ROI

Exhibit 2-10: Asia-Pacific Companies More Likely to Get Positive ROI

Believing we would find many companies that hadn’t been able to measure the returns on social media, we asked another question to assess the value of social media activities. We had respondents rate on a scale of 1-5 (1= not at all, 2= minor, 3= moderate, 4=high, 5=very high) the degree to which their social media activities had improved 15 items in four areas of performance:

  • Brand and consumer awareness related: Awareness, brand affinity, how consumers view the brand and reduction in consumer attacks on the brand
  • Improvements in customer-facing processes: Marketing campaigns, customer service and revenue
  • Innovation (both product and process): The identification of new product/service opportunities and new trends
  • Cost reduction: In sales, service, marketing and product development

(Note: Respondents could choose another category and measure its benefit on the same 1-5 scale.)

The average rating on these 15 items was between 2.95 (reducing new product development costs) and 3.67 (increasing consumer awareness). (See Exhibit II-11) This shows that across the 15 items, social media had a moderate but less than high impact. It’s important to note here that lower ratings were attached to goals related to reducing costs.

Exhibit II-11: The Impact of Social Media on 16 Areas of Performance

Exhibit 2-11: The Impact of Social Media on 16 Areas of Performance

These numbers were largely consistent across all four regions.


 


Mastering Digital Feedback – Findings: Regional
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