Professional Documents
Culture Documents
Increase in Return on
Investments (ROI)?
Kate Colosimo
MMC 4420
Abstract
Social media marketing is becoming crucial for any business. However,
most marketers report to be frustrated with their social media. They feel it is
ineffective because their social media strategies are disconnected to their
business objectives including a measurement system that can correlate their
social media to an increase in financial ROI. The purpose of the project is to
interview several individuals, who use social media, over the course of one
year. These interviews aim to demonstrate and measure engagements in
social media that can be undeniably linked to business outcomes such as
increases in revenue. Candidates will be chosen based on a released on
social media discussing social media habits. The final data will be analyzed
by trained coders using emergent coding methods to categorize the results.
Introduction
The roles of both the consumer and the company are changing. Social
media and viral marketing are the cause of this conversion. Whereas,
traditionally, companies were in control of their messages and the shaping of
the brands, customers now have a great influence on a companys
promotion, reputation and overall brand. Viral marketing has created
possibilities for information to be quickly dispersed and can influence a large
number of people. Social media is being used by most companies to increase
the companys reach and impressions at an alarming rate. These trends
create some definite complications. One main theoretical issue is it is difficult
to measure social media ROI. Many companies are concerned that the time,
money and manpower that is put into their social media are not translating
into increasing their profits despite the companys exposure.
With social media being such a prevalent force in everyday lives, it is
important for companies to know that their exposure can turn into profits
both on- and offline. Continued research is necessary to guarantee that the
time and money spent on social media does lead to an increase in ROI. With
this guarantee companies can feel safe continuing to invest into their social
media accounts.
There have been several articles and books written about profitability
in social media, but many times the objectives that are measured are only
the companys reach, engagement, brand mentions and sentiments.
Literature Review
Viral marketing and social media are important for the growth of any
business as of recently. However, there has been some major challenges with
the use in social media. Although most companies use social media many
feel that they are not gaining the most possible. Marketers understand there
are benefits, but are unaware if simple impressions and engagement are
turning social media into sales.
Wilson (2000) defined viral marketing as any strategy that
encourages individuals to pass on a marketing message to others, creating
the potential for exponential growth in the message's exposure and
influence. He continued, Like viruses, such strategies take advantage of
rapid multiplication to explode the message to thousands, to millions.
There is no doubt that when people talk of viral marketing they are referring
to the Internet especially social media. Kimmel and Kitchen (2014) confirm
this trend, although WOM is as old as the oral tradition, it has gained new
prominence today, in marketing and other areas, as a result of the greater
connectedness of people via social media and the considerable speed with
which interpersonal messages can spread. (pp. 5)
Most businesses incorporate social media into their marketing
strategies because they understand the attachment that people have to
social media. There is a substantial interest in marketing about social media
because of that connection. VanMeter, Grisaffe, and Chonko (2015) discuss
the potential for incredible ROI for a company if there is a correlation
between peoples strong attachment to social media and a positive WOM
dissemination about a product/ company amongst those social media
platforms. In short, Marketers sense that social media is a catalyst to
capitalize on customer generated word-of-mouth.
However, this presents a difficulty in measuring the ROI of social media
and viral marketing. Many studies and articles have discussed this obstacle.
There are several factors that influence social media and viral marketing
statistics such as likes, shares and retweets, but is unclear how to determine
if those impressions turn into definite measureable revenue. (Cronin, 2014).
Drell and Davis (2014) researched that over half of marketers said that they
felt like there social media campaigns were ineffective due to the incapability
of linking social media to business outcomes. Some researchers states that
family. However, 50% of the candidates followed blogs and articles to keep
up with emerging trends, and 50% said for entertainment value.
The online purchasing habits showed some interesting trends as well.
All candidates admitted to regularly buying products online. The younger
generation said they would browse through social media to get ideas for
purchases. Even two older candidates admitted to purchasing items via
Facebook within the last six months. One interviewee said, I used to always
ignore the advertisements because they were always like Lose 15 pounds by
not eating these five foods. But now I noticed more and more the
advertisements relate to me.
The second round of quantitative research involved a web based
survey. The goal of this survey was to get a more in-depth understanding of
how different people use the Internet and the ways this usage can increase
revenue for companies via online advertising. Moreover, this survey was
collected to see if this rising trend of social media can combat data overload
to help companies achieve profits. The following questions help drive the
survey: does being connected to social media help create online purchases,
and can we use peoples preferences for what drives them to the Internet to
produce advertisements and social media campaigns that will yield clear
financial return on investments?
There were some significant trends in the findings. Everyone had
access to the Internet and used it daily. Although most were connected
Data Analysis
Data will be collected and stored online. For the qualitative research
emergent coding will be used. There will be categories that measure both
business outcome metrics and engagement metrics based on the preliminary
survey. Coders will be trained to have specific and mutually exclusive
categories to assign answers. Every three months or so the data must be
analyzed and the coders will use the Holsti Reliability formula: Reliability=
2M/N1+N2 where M is the number of coding decisions on which two coders
agree and N1 and N2 are the total number of coding decisions by the first and
second coder, respectively. (Wimmer and Dominick, 2014, pp.175). The
results can lead to molding the questions to attain more consistent and
detailed results. Additionally, at that point it can be determined if the
questions are still valid to the subject or if they need to be revised.
References:
Berger, R. (2000, August 14). Money talks: New streams of revenue spark
new argot.
Electronic Media, 19, 12
Cronin, J.J. (2014). Teaching ROI Analysis in an Era of Social Media. Journal of
Advertising
Education Advertising
Education,18 (2), 28-35.
Going Viral is Infectious. (2015,July 31). Slogan, 20(7). Retrieved from
http://go.galegroup.com.dax.lib.unf.edu/ps/i.do?id=GALE
%7CA423528504&v=2.1&u=jack91990&it=r&p=PPCM&sw=w&asid=8
596a0455d03bd532076244a5d8e6917
Kimmel, A., & Kitchen, P. (2014). WOM and social media: presaging future
directions
for research and practice. Journal of Marketing Communications,
20, 5.
Littlewood, K. K., & Bick, G. G. (2015). Developing the Social Media Value
Chain: A Conceptual Framework for the Measurement of Social
Media. Proceedings Of The European Conference On E-Learning,
297-305.
Powell, G. R., Dimos, J., & Groves, S.W. (2011). ROI of $ocial Media : How to
Improve the Return on Your Social Marketing Investment.
Singapore: Wiley.
Wilson, R. (2000, February 1). The Six Simple Principles of Viral Marketing.
Web Marking Today, 70. Retrieved from
http://crmodyssey.com/Documentation/Documentation_PDF/Principles_viral_
marketing.PDF
Wimmer, R.D. & Doiminick, J.R. (2014) Content analysis. In Lyn Uhl (Ed.),
Mass media research (pp.159-176.) Austrailia: Wadsworth
CENGAGE Learning.
Appendix:
Quantitative Survey Question Example
2. Why do you most often go to a companys social media account for the
first time?
3. Will describe why you engage with specific companies on social media?
4. What type of engagement do you most commonly preform?
The coders will use be educated to group specific responses into categories.
Once every three months the coders will meet to quantify finds and check
validity and reliability using the Holsti Reliability formula: Reliability=
2M/N1+N2 where M is the number of coding decisions on which two coders
agree and N1 and N2 are the total number of coding decisions by the first
and second coder, respectively.