Social media projects suffering from ROI and feedback shortcomingsby
While the majority of brands are still failing to prove a link between their social media efforts and top line growth, the main shortcoming is the failure to obtain consumer feedback on how to improve their business, according to a report.
A study of chief marketing officers undertaken by online community platform provider Bazaarvoice revealed that only two out of five respondents were able to measure the return on investment of their social media activities last year.
The key problems they faced were linking social initiatives to conversion rates and sales metrics, determining what the right metrics were in the first place and how to track them as well as gaining chief executive buy-in on suitable measurement criteria.
Other challenges included finding enough staff resources to focus on measurement activity as well as being able to implement such metrics globally.
The single largest measurement gap was in measuring sales conversions, followed by boosting revenues via social media and, as a result, it was in these areas that most CMOs were keen to focus over the year ahead.
But the report indicated that, while the biggest impact of social interaction with consumers came from generating real-time, trend-based insights that could help brands to improve their businesses, many CMOs and other senior managers were failing to realise it.
Despite this situation, some 89% of CMOs used some form of user-generated content to inform their product and service decisions last year, with 93% planning to do so in 2011. Customer stories were the most popular medium (59%), followed by product suggestions or ideas (54%), polling (49%) and customer reviews (47%).
As a result, the report predicted that ROI in a social media context would expand to include more than just increased conversion rates over time. "Companies will look to the customer engagement social media provides to help guide overall improvements in the way they market, build products, support customers and more. This will continue to evolve as investments in new media continue to challenge the status quo," it said.