A week or so ago The CMO Club published a short whitepaper titled CMOs on Social Media Plans for 2011. The report is a continuation of research begun in 2009 and gives a longitudinal view on how marketing leaders are thinking about Facebook, Twitter, LinkedIn and the rest.
So, what's the Cliff Notes summary? The research is a classic example of a glass half-full or half-empty, depending on your preconceptions. Take the question “What social marketing activity brings you the highest return on investment?” The glass half-full answer is that for most social media tools, the percent of CMOs that believe they provide “average to significant” ROI has more than doubled. In contrast, the glass half-empty answer is that well over 50% of CMOs either don't know or see no ROI for the vast majortity of social media activities.
What explains this? Certainly not a lack of data on which to draw an ROI conclusion – under 20% of CMOs have no way of measuring the value of social marketing. But the majority are measuring activities rather than outcomes, by which I mean things like site traffic, number of mentions, or number of posts. This is the More School of Marketing, who's thesis is that if we do more things, and we see more things happen, then we must be doing more things right. This is, or course, wrong.
Only a small minority of CMOs report measuring increased sales, or order size, or reduced call volume – all things that can be tied directly to a real ROI. Why so few? Because it is so hard.
Despite the abundance of data that comes with much online-based social media, there's very little insight into how social marketing really impacts the bottom line that isn't anecdotal. Take the example of a typical corporate blog: it is trivial to measure-to-death the traffic on the blog, and even to understand visitors feelings and dispositions. Blog comments and the migration patterns of visitors might give you richer insights. But unless your Zappos selling shoes or Amazon selling books, its tricky to equate all this traffic to a purchase, a sales problem solved, or a repeat buyer. For most of us in marketing, the trail from social media activity to eventual ROI is convoluted, long and indistinct.
Despite this, my glass remains half full. Saying that social media has value to marketing is like saying the sky is blue; saying that social media has ROI for business is hardly controversial either. What is difficult is quantifying where the value emerges and how much value can be gained. This is what CMOs want to know. The report is silent on these questions, and for most of us the answers will remain elusive.