Social Media Makes Zero the Best ROI Number Ever

“Almost overnight, the Internet has gone from a technical wonder, to a business must.” –Bill Gates

“Today’s businesses can’t just use social media; they have to become social businesses, inside and out, from top to bottom.” –Paul Rand, Author

October 20th. Does that day hold any significance for you? Go ahead, think about it….

What holiday falls between Columbus Day and Halloween?

In the Philippines, it’s National Thank You day.

When “Reader’s Digest” revealed the Philippines as one of the least courteous countries in the world, Toblerone chocolate saw an opportunity. The company launched a campaign on social media to spread the word that on October 20th, they needed to say “thank you” to people they saw during the day. Subtly, Toblerone branded itself as the “thank you” chocolate, but in reality, the company just pushed an idea. And when that idea spread, Toblerone was naturally brought into the forefront. Sales in the Philippines increased 132 percent over the course of the campaign and now, the island nation is the largest market for Toblerone chocolate in Asia.

Recap:

  • 132 percent increase in sales
  • Philippines Number One Market in Asia for Toblerone Chocolate
  • Legislation passed declaring Oct. 20th, “National Thank You day”

Too bad such a successful campaign had an ROI of zero…

How about Network Solutions? The web hosting company recently took advantage of a slip up by competitor GoDaddy. GoDaddy CEO, Bob Parsons, posted a video of himself shooting, killing, and butchering an elephant in Zimbabwe. This outraged the social media world. In response, Network Solutions sent out a simple tweet:

“If you’re looking for a new web domain host now, Network Solutions is willing to help. Use coupon code “elephant” and receive a domain transfer for $6.99”

That’s it. One hundred and twenty-seven characters. More than 1,000 people responded and switched to Network Solutions. Unfortunately, like the Toblerone campaign, this move also weighs in at a whopping zero on the ROI scale.

Why? How could these two overwhelmingly successful campaigns be zeroes?

Because the social media moves didn’t cost anything. And anything divided by zero is still zero.

In a world driven by return on investment, social media offers little mathematically. ROI was developed on the assumption that success cost money. Social media turns the theory on its head. At the cost of 12 seconds and 127 characters, Network Solutions received more than 1,000 new customers overnight. At the cost of an idea spread through the Internet, Toblerone increased sales 132 percent and started a new holiday in a nation of 96 million people.

Social media is powerful. So powerful in fact, it can transcend ROI.

cadburys-facebook_2114799iCadbury launched a social media campaign in 2012 to build its previously non-existent online community. The company dedicated itself to quality content, and before long its Facebook community was nearing 1 million. In order to celebrate its 1 millionth fan, the company built a giant “like” sign out of its flagship, dairy milk chocolates. The photo received just enough likes to push the community over the million fan mark.

But was that campaign “worth it?” Or was it just a waste of a lot of good chocolate? How do you measure the value of those fans?

A study done by marketing software company Hubspot, found that for every 1,000 followers a company gains online, its web traffic increases by 400 percent. Run these numbers through your website’s conversion rate and then you have a rough measurement of the power of your community.

Of course, measuring only immediate website sales is only scratching the surface of the power of social media communities.

“The No. 1 most credible source of [online] recommendations is YouTube,” Paul Rand said, “but a friend liking a brand page and sharing that is now considered the second-most prominent form of recommendation, and third is online brand reviews.”

So a company’s brand image is reinforced every single time someone clicks “like,” “follow,” or “share.” In marketing, quality of contacts matters infinitely more than quantity of them—this is the very essence of niche and target marketing. With the power of the social media community, an organization’s online fans are literally inviting their friends to be part of the target market! Social media is credible, powerful, self-sustaining marketing.

When building an online community though, it’s important to remember the word community. Social media fans are more than just a mailing list; they’re people. These are people who can be motivated to be brand evangelists at the drop of a hat if they are treated as friends.

Take the story of Laura Ellen. If you don’t recognize the name, don’t feel bad, she’s just a normal Twitter user—well, she was, until Kit-Kat and Oreo changed that. Laura once tweeted this:

 

What makes this a story worth telling, is the response by Kit Kat:

 

 

Oreo, not wanting to miss a chance to build community (and apparently not the most confident of tic-tac-toe players), responded with this:

 

 

As of the writing of this article, Kit Kat had 69,000 followers. Oreo had 295,000 (part of the extra Oreo followers are due to a fantastic tweet during the Superbowl last year). These are communities that support these brands and pledge loyalty to them publicly.

This set of tweets earned both of these great brands new followers as well. According to our formula, Kit Kat’s web traffic should be increased 27,600 percent over pre-social media levels and Oreo, 1,118,000 percent over the pre-social media site levels. Assuming a conversion rate of even 1 percent, we’re talking mega bucks. Of course, the ROI is a different story. These tweets cost what…..a few minutes at best? Probably an ROI of zero again.

Anything divided by zero is, in fact, zero.

Is that point made clear yet?

In running an organization’s social media, remember, setting up a Twitter Feed, a Facebook Page, or a YouTube video is simply not enough. As Mike DiLorenzo, social media director for the National Hockey League, said:

“Social networks aren’t about the sites. They’re about the experiences.”

Social media is a game of giving your fans the feeling of being part of a thriving community: an open exchange of ideas, regular communication, and chances to rally around a shared interest—the brand.

The real question agencies and marketing departments face today is not whether or not to use social media, it’s how to convince the decision makers to go along with it.

The business world today is focused on measurable results and ROI. As Tim Williams, founder of Ignition Consulting Group said:

“Clients don’t care about the labor pains; they just want to see the baby.”

If that baby is ROI, then even the savviest of social media marketers may struggle to give a monetary value to their efforts.

When you ask the advertising department how much it cost them to acquire 1000 new customers, they’ll quote to you a cost in the tens or hundreds of thousands for a commercial produced (millions if the commercial is going to a primetime slot). When you ask Cloris Leachmann how much it cost her to acquire 1000 new customers for Network Solutions, she’ll tell you 127 characters and about 30 seconds.

Too bad the ROI for her campaign is still zero.

By Adam Durfee

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