Recently, the Baltimore Chapter of the AMA surveyed its members on key movements within the marketing industry to see how Baltimore marketers are adjusting to the industry’s evolution. The survey resulted in 128 responses from area marketers and paints an interesting picture.
When asked what the biggest challenges Baltimore marketers face in their jobs, responses showed that measurement was leading the pack. However, measurement was broken into a few categories as you can see below.
Biggest Challenges Faced in Jobs
- 54%: Measuring effectiveness of marketing/market research
- 37%: Social media ROI
- 30%: Emerging technologies
Measuring the effectiveness of marketing and social media likely comes as a result of the changing economic climate and pressure from the C-suite to make cuts in the “right area.” The addage that says ’half of your marketing spend is waste, but no one knows know which half’ just isn’t funny to today’s marketers who are grappling with measuring their own value to the firm. It’s realistic to believe that large brands have been doing this for a while, but for small to mid-size companies the technology requirements for accurate measurement are a large barrier.
From the social media perspective, measurement has been a hot topic nationally. As of today if you search in Google for ‘Social Media ROI’ it returns over 2.8 million results. Most of these results contain theories rather than hard methodology. This is likely because in order to accurately measure ROI it requires systems integration that begins with accurate tracking of the referring source (where the lead came from) through the CRM system, the sales pipeline and down to the sale. And it costs big bucks that many small to medium size firms aren’t able to invest until the ROI has been proven. Wow, it’s a never-ending cycle isn’t it. When you add in doing “feel good” online relationship management into the mix it becomes even more difficult.
We know that Baltimore marketers aren’t alone in their quest to the holy grail of social media ROI, but how does this challenge stack up nationally?
MarketingSherpa NationalReports
- 42% responded that the inability to Measure Social Media ROI is the most significant barrier to social media adoption
While there is some variation in the way the question was asked the two groups it is clear that there is a concern over the ability to track social media to revenue. MarketingSherpa did a fantastic job in their analysis and this is a great report to have on your shelf and recently they released the 2010 version of the report.
They stated that “Social media measurement is one of those topics about which opinions vary dramatically. Like any tactic that is more aligned with PR than with direct marketing, results are difficult to measure quantitatively. What marketers can do is measure the value of the resulting conversations and relationships qualitatively, and not focus on the moment-in-time transactions, such as traffic, hits, etc. Marketers obsessed with tracking social media results quantitatively miss the point. They may find themselves employing much less effective social media tactics for the sake of measurability.”
Their is certainly truth to the statement, however that doesn’t offer much help for those dealing with clients and executives breathing down their neck and questioning where resources are being spent. So here are a few articles that may help you in your quest for measurement.
HOW TO: Measure Social Media ROI
Creating a Social Media Value Index
Defining Social Media ROI Once and For All
By: Nichole Kelly, AMA Baltimore Chapter Vice President of Communications
Nichole is the Director of Social Media for CareOne Debt Relief Services. She also blogs about social media and marketing innovation at nicholekelly.com
<!–[if gte mso 9]> Normal 0 false false false MicrosoftInternetExplorer4 <![endif]–><!–[if gte mso 9]> <![endif]–> <!–[endif]–>
Biggest Challenges Faced in Jobs
- 54%: measuring effectiveness of marketing/market research
- 37%: social media ROI
- 30%: emerging technologies
marcidevries
nkelly0623
dovhoffman
Tonya R. Taylor
8 comments
Comments feed for this article
December 28, 2009 at 9:14 pm
AMA Survey Shows Baltimore Marketers Challenged By Measuring Social Media ROI « NicholeKelly.com
[...] This post was written as a guest poster on the AMA Baltimore blog. Click here to see the full post. [...]
December 31, 2009 at 4:28 pm
Marjorie Valin
Great commentary, Nicole. Like all things with measurement, the hardest part is to define what you want to measure. Sales? Awareness? Influence? Social media guru Chris Brogan talks about ROI as Return on Influence and how much easier it is to influence a stakeholder when there is a relationship.
It’s also easier to measure the value of social media when you compare it against your current marketing investments. For example, if you’re spending $40,000 in advertising to drive awareness and online conversions, compare Web spikes and conversions against the salary of social media staffer to expand relationships, followers, and brand awareness.
If you want to learn more, I’d recommend signing up at hubspot.com and enrolling in their free, online social media university. Each “class” is a 1/2 hour recorded webinar you can listen to at your leisure.
January 1, 2010 at 7:25 pm
Mike Harris
I disagree with Chris Brogan’s ‘return on influence’. It would seem that this is more of the same old marketing mumbo jumbo that’s been trotted out for decades to justify marketing’s inability to measure its contribution to the corporation. Marketing return on investment is very easy to measure.
Orientation
Did you know that ROI can be calculated on email blasts, promotions, price changes, print ads and tradeshows? With or without campaign management software, calculating ROI is an easy and often overlooked best practice that reaps benefits in bottom line performance, improved overall marketing skill sets and marketing team morale.
Remember, models such as this are only models and are not always black and white. They are meant to help marketing people focus on what they are spending for communicating results to senior management and others in the organization.
To calculate the ROI, fill out the three boxes below, then click the “Calculate ROI” button. Refer to the key on the left for input information.
Total Campaign Cost1:
Total Responses2:
Cost Per Response:
Total Campaign Revenue3:
Revenue Per Response:
ROI = Total Revenue – Total Costs
Percentage ROI: (ROI minus total costs of campaign) divided by (Total costs of campaign)
Conversion Ratio:
Conversion Rate Is Affected By:
A. The ease with which respondents can complete a purchase.
B. The attractiveness of the offer
3. The stimulus of the presentation.
Key
1 Total Costs
Includes most costs of offering the campaign. These costs include advertising, promotion, co-marketing costs, plus any variable cost that is associated with putting the campaign in front of an audience such as email blast services (Blue Hornet is an example.). This does not include the cost of fulfillment, giveaways such as all expense paid trips, freebies such as keychains & mousepads, free dinners, etc. (see Total Revenue Per Campaign). The example shown was an email blast sent to about 40,000 customers, which cost about $100 with the client’s email blast vendor.
2 Total Responses
The number of click-throughs, postcard returns, sweepstakes entries, inbound phone calls, etc., generated by the campaign.
3 Total Revenue Per Campaign
Total revenue per campaign is total revenue generated by the campaign (commissions, fees, product sales, etc.) minus the total cost of trip giveaways, freebies such as key chains & mousepads, free dinners, etc., used to generate the response.
4 Conversion Ratio
(ROI minus total costs of campaign) divided by (Total costs of campaign)
Other Definitions
Cost Per Response: Total costs divided by total responses.
Revenue Per Response: Total Revenue Per Campaign divided by Total Responses.
ROI: Total Revenue minus Total Costs
ROI Percentage: (ROI minus total costs of campaign) divided by (Total costs of campaign)
January 11, 2010 at 2:10 pm
nkelly0623
Thank you for your comments Marjorie and Mike. I think most would agree that the formula to measure ROI is straight forward, however agreeing on what the inputs are is where a lot of disagreement comes into play.
Here’s an example of a challenge I recently had with measuring ROI. You are active on Twitter, LinkedIn, and your blog. You get a ping back on an article from another blogger who you begin having casual dialogue with on Twitter as well. A few months later you get a referral from the said person.
Now obviously you would want the ROI of that referral to be credited to the blog, where the conversation originated, right. But was it the blog itself, or the sum of all of your efforts on Twitter and the blog that built the relationship to the point that the person wanted to refer someone to you? It is likely the latter.
So say that you decide you are going to attribute ROI to all social media channels rather than each individually. The question still becomes how do you “track” the lead from inception through completion in a way that clearly identifies that they came from social media.
For companies that have robust IT teams, this can be done with some reasonable effort. For those who don’t, it is far more difficult.
February 17, 2010 at 6:33 pm
Five Catagories Of Social Media Measurement | Folk Media
[...] of Social Media for CareOne Debt Relief Services and Vice President of Communications for the Baltimore Chapter of the American Marketing Association. She also blogs about social media and marketing innovation [...]
February 21, 2010 at 4:33 pm
5 Categories of Social Media Measurement «
[...] of Social Media for CareOne Debt Relief Services andVice President of Communications for the Baltimore Chapter of the American Marketing Association. She also blogs about social media and marketing innovation [...]
March 30, 2010 at 1:04 am
Take the Mystery out of Social Media Measurement: Interview with Amber Naslund «
[...] of Social Media for CareOne Debt Relief Services andVice President of Communications for the Baltimore Chapter of the American Marketing Association. She also blogs about social media and marketing innovation [...]
May 19, 2010 at 8:30 pm
How Does HootSuite Measure Social Media? Ryan Holmes Shares «
[...] of Social Media for CareOne Debt Relief Services and Vice President of Communications for the Baltimore Chapter of the American Marketing Association. She also blogs about social media and marketing innovation [...]