Social Matters Insiders: ROI of Social Media Marketing

Once a fringe phenomenon, social media has been quickly integrated into the core of digital marketing. However, the same top level queries endure: How to use the medium most effectively and efficiently? How should brands account for the return on investment (ROI) in social and digital marketing? How much does content strategy factor into successful social marketing? These questions were the focus of a recent Insiders Roundtable discussion held as part of Social Matters in Hong Kong.

Hosted by the Financial Times and Branded, the Insiders Roundtable saw senior marketers from prominent global brands share their ideas in a frank debate encouraged by the organiser’s pledge of anonymity for the participants. With names, formalities and affiliations left at the door, the discussion quickly honed in and three major insights emerged.


1. Define how you will calculate ROI internally

Increasingly, marketers are asked to account for their spending and investments in social media and digital marketing. For those who question “what is the ROI?”, one needs to define the metrics to measure the results.

The regional marketer of a leading car brand suggested proving the ROI of social marketing internally by defining “how much our company wants to spend to keep someone’s attention. This metric can be used to compare the value of viewership, across traditional paid media and online.” Therefore when mapping the value of digital vs traditional media spending for stakeholders internally, digital and social media spending become very valuable as marketers are able to capture someone’s attention for a similar amount of time as a TVC, but at a lower cost.

In addition to this viewpoint, the Head of Marketing at a leading bank told us that they question whether social media needs to have an ROI. “Social media is ‘free’ compared to conventional advertising, the investment is much lower therefore any return is a plus.” She went on to point out that at the bank, they “look at social (media) uniquely and we don’t think of it like every other advertising spend”.

From an agency perspective, one participant argued that “it is impossible for social media to have an ROI in isolation. It needs to be part of a wider marketing ecosystem and the greatest strength of social media is establishing relevant conversations with customers”. This unique aspect of social media adds value for marketers, since it enables brands to turn viewers into fans and advocates.

For some brands, digital and social marketing is used for increasing brand awareness and for others, it is to increase positive sentiments. Therefore defining the metrics that matter to your brand, using KPIs that internal stakeholders understand will enable you to gather support to “prove” the value of social and digital initiatives.


2. Make content that is tailored to the platform

Consumer consumption habits are changing: social now resides on smartphones and videos are watched on the go. When creating content, brands need to take into account how your content is going to be viewed.

Audiences may be happy to watch a 10 minute story on TV or at a desktop, but similar content viewed online or on mobile would need to be much shorter and the production quality need not be as high. One marketer from a major American news organisation was “excited by having a cheaper way of producing breaking news stories” compared to typical multi-crew professional set-up used for TV.

All of the participants agreed that on digital the expectation is for content to be entertaining and educational. “It requires a different quality from conventional TVCs” suggested a leading mobile device marketer. Social media platforms enable brands to have a widespread distribution channel to engage with new audiences. Short-form videos enable brands to create “stories and visuals that can be shared”, said one major global publisher.

Fast moving brands are creating content that fits with their brand identity, cheaply and quickly. A value-add for brands to create videos is the data that the video provides regarding its viewers. Brands are able to analyse data about its audience as a route to creating relevant content, allowing brands to discover what consumers want and what they care about. A senior member of the content creation team for an auto manufacturing company suggested that “viewership data has informed our social content strategy”.

All participants agreed that if integrated in an overall marketing strategy, short-form videos and user generated content can be a hugely beneficial outlet for customer engagement.


3. Pay attention to your fans

For many industries such as alcohol, tobacco and NGOs, there are strict regulations around marketing. For brands that are restricted on mainstream media, social media has become a valuable listening tool to understand more about its consumers.

For a senior marketer in a major tobacco company, “most of our activities are in social media listening instead of creating content. This type of listening enables us to gather insightful information about what people think of our brand”.

Additionally, a leading beer brand suggested that they focus on “food and wine pairings” and a great deal of their content is created by the consumers. Further, they have seen consumers build online communities and forums around their favourite alcohol brand, “those in the communities are very loyal, these are the people that give you a lot of sales – proving the ROI of social media marketing”.

Further, even though NGOs do not have the same legal restrictions on marketing compared to alcohol/tobacco brands, they navigate a tricky social media landscape. Increasingly, Facebook and Twitter accounts that are personifying animals are being shut down. A member of the digital marketing team in a charity asserted that “we want to move away from the traditional ways of getting donors and into online. But we have received a lot of backlash from this”. They suggested that the NGO has learnt a great deal about what works for them, based on the instant feedback from social media.

It is clear that for certain brands, social media has opened up new opportunities to gain feedback from fans. It has also opened up ways of monitoring brand sentiments and cultivating loyal fans to drive ROI.

The questions of value and ROI will be resolved—there’s too much at stake for them not to be. Clearly, social has brought challenges as well as many opportunities for innovation. The brand or agency that figures out how to measure and prove the value of social media across all sectors and audiences will enjoy a significant victory.


If you would like to be part of our the next invite-only “Matters” InSights series roundtable, please email Kelly on