The chart above states ’social media… will be the hottest’ area of growth for ‘online advertising’. Whilst I agree with the first half of the statement, I’ve two concerns with the ‘for online advertising’ part:
CONCERN #1) some marketeers may interpret this as a new place for them to heavy-handedly paint their marketing messages
–> For me, the increased investment should be in (a) analytics engines, not advertising engines; (b) human-led interaction, not machine-led interaction.
CONCERN #2) whilst the SoMed advocates talk about ‘major growth’, Traditionalists see the investment/return as a small fish in a big ocean and therefore put a lower priority on it
–> To change this we need to change the way we look at ROI. Many companies attribute marketing success based on its conversion to purchase (revenue). My belief is that success needs to be looked at from the more granular level of conversion to following life-cycle stage. Let me explain…
EVERY consumer goes through the customer lifecycle (Awareness > Consideration > Inquiry > Purchase, etc, etc); though each at varying speeds, each using different tools & touch-points [physical & digital] and each having varying levels of influence for each of these.
The top-level view compares activities based on their financial benefit to the business; regardless of whether that activity is an Awareness generating activity, a Consideration generating activity or a Purchase generating activity. Of course, when comparing these, the latter will always appear the most effective as the customer’s decision is 90% there already. Take the earlier activities away though, and watch its conversion rate plummet.
The granular level ROI then, measures success based on the objective of that activity. Awareness:Consideration conversion, Consideration:Inquiry conversion, Inquiry:Purchase conversion. This way you can compare conversion rates fairly, at an objective level; pick the success and the failures; and refine your marketing activity more effectively.
What’s this got to do with Social Media? In general, my view is that Social Media’s core objectives lie in the pre-Inquiry stages*. So whilst commercial gain at the top-level may not appear life-changing, it’s the impact from its growing influence at the earlier stages that will affect conversion rates (online AND offline) later down the track.
*I say ‘in general’ because, to my earlier point, it’s important that you understand it’s role & influence level in the life-cycle stages of YOUR target personas.
Right, I’ll jump off the soap-box now. (Passionate? Moi? ;))
Written in response to this blog: http://is.gd/ui4L