Social Media ROI

60 years ago some thought TV commercials were a waste of time and money. Is history repeating itself with social media?

I know comparing commercials to social media is not apples to apples but its close enough for my purposes. Flash forward to 2011: with over 300 million Twitter users, it offers an even bigger audience than TV did back in the day.

So why isn’t everyone advertising on social media? The reasons range from lack of staff or time to lack of analysis or return on investment (ROI).

1. Let’s tackle a commercial’s ROI
As humans, we are generally skeptical of new things. No one believed that advertising on television would be as successful as it is now, nor did the Internet grow by leaps and bounds when it first started. Advertising on social media (e.g., Twitter, Facebook, etc.) is relatively new, but it is no more an instantaneous lift than a burger commercial: no one runs out to buy the burger right then.

Like planting a seed, one must wait for social media advertising to grow and mature. Unless your product, service or advertising sucks, you will realize traffic, and in turn sales. Do not become a slave to the peaks and trends of your Twitter analytics. Instead, use your energy to establish yourself.

2. Have a strategy
Gather a strong group of followers by posting for a few weeks before you start selling yourself or your product, and repost subject matter that interests you. You now have a foothold to build on, and should learn from mom-and-pop stores:

a) Treat each customer with respect and you can count on their return business.
b) Show you have nothing to hide and your honesty by settling complaints immediately and publicly.

Track your social media efforts with tools like Google Analytics Social or Twitalyzer. Paid versions are available, but if you are a small business why spend money when it’s not necessary?

Tools like Crowdbooster will tell you the best times to post or tweet to increase engagement. What you post is up to you, but ensure it is not garbage that leaves readers wanting more (you know what I mean). If you present yourself in a professional manner, respect others, engage and share great content, you won’t have any problems attracting followers and making sales.

If you follow thousands, have thousands of followers without sales, you made some errors in judgment on who to follow; you need to find your target audience.

3. Did you do your research?
No way, research!?
Yes, way. Topsy, Kurrently and even Twitter have sentiment search capabilities: see who comes up in a search for your service and/or product, and follow or engage them.
Snow shovels don’t sell in Florida, so don’t follow ‘robots’ and expect to run up your sales. Be logical and market smart – if you have a niche, follow it. Analytics, search sentiment, good curation of relevant stories to share and timing may be the difference between open for, or out of business.

Bottom line
Consider what was going through Joseph Bulova’s mind when he signed a contract for the first-ever TV commercial. Did people think he was wasting his time? Bulova went on to become a household name and the man himself was considered a great business mind…

Be a pioneer – do not let lack of ROI stop you when you see potential value, but always do your homework. The great ones always had a well thought out business plan even when the value was unknown.

Think of those who, at the time, reached millions through little-known channels like billboards, magazines and direct mail. Look at Jay Baer and Peter Cashmore, who make great livings from advertising on relative newcomer social media. I am sure they both would say they treated social media as a business capable of great profits because they saw value.

Thank you for your interest, please keep in mind the above article is comparing analysis of social media now to television commercials 60 years ago, I AM NOT comparing it to our ability to run analysis on commercials today.