Social media effectiveness measurement and spend doesn’t reflect the ROI potential

Social media effectiveness measurement and spend doesn’t reflect the ROI potential

Two new research pieces have been released lately: one showing how organisations are measuring social content effectiveness; and one looking at social media budget spend in social media channels.

Previously, research from ShareThis and the Paley Center with Beresford Research, was the first study of its kind to apply scientific, statistical methodology to the problem of determining the actual monetary value of a social share.

It is an interesting piece of work that an evidence-based model has calculated value.

With the new research on effectiveness and spend, there are some interesting analogies that can be drawn when we also attach monetary value evidence.

The Ipsos OTX study from April 2014 shows 80% of marketers measure social media effectiveness, with only a few attributing a monetary value to that effectiveness: 89% measure effectiveness on a “like”, with only 22% measuring ROI or conversions.

It is an anomaly for effective measurement as a “like” is no indication for a successful outcome or further engagement.

Ad Age and RBC Capital Markets polled 1682 marketing, agency and media executives on their opinion on You Tube, Facebook and Twitter. The spending increase in these social media channels is moderate and is generally still a very small slice of the budget. 45% said they were only spending 1-10% of their budgets on social. 40% said spend was dedicated to brand awareness, with a tiny 16% citing driving traffic to a website.

Organic reach in Facebook, according to the report, was in dramatic decline; most have now been paying for Facebook ads (83%). However, Twitter seems to be grabbing back some attention, with 44% having increased their spend on Twitter in the last 6 months and 63% expecting to invest more in Twitter ad products over the coming year.

Promoted tweets was most favoured, however, it will be interesting to check the growth in Amplify as a second screen for TV marketers.

Only 50% surveyed invested in YouTube and, of those, 30% reported no spend on ads.

When cross referencing these research findings back to the research from ShareThis and the Paley Center with Beresford Research, there could be smarter ways of measuring and of social media planning. The budget could be/should be directed in to a recommendations-based strategy that impacts on revenue and propensity to purchase.

  • Sharing and recommendations influence consumer buying decisions more than brand or price.
  • A recommendation can motivate consumers to spend 9.5% more for a product or service.
  • Ratings generate 6% additional value.
  • Reviews generate 7% additional value.
  • In-person recommendations generate 10.6% additional value.
  • Professional reviews generate 10% additional value and intent to purchase.
  • An online share has a value of between $0.33 for a brand or store recommended by a stranger, and $1.33 for brands recommended by friends or family. Mobile accounts for twice as many shares as desktop.
  • Champions are over 40% more likely than average to trigger others to look up information on products/brands, 90% more likely to convince others to choose a certain brand and 1.5 times more likely than average to make them buy or try a certain brand.

Social media is an important proven channel for creating brand buzz, word of mouth recommendation, etc, but research (iTV Survey 2013) shows that these conversations only equate to a proportion of brand conversations, with many more others (65%) triggered first via face to face, or by email, or on the phone.

For me, this validates my view that the trigger is advocacy and champion ambassadors, based on a personal journey. A positive conversation trigger about brands and products creates positive advocacy, drives purchase intention and increases lifetime value beyond the “a-typical” view of social media WOM / buzz.

(US data only, as there is limited in-depth data of this type specifically on Australia.)

Fi Bendall is the managing director of Bendalls Group, a team of highly trained digital specialists, i-media subject matter experts and developers.



Notify of
Inline Feedbacks
View all comments
SmartCompany Plus

Sign in

To connect a sign in method the email must match the one on your SmartCompany Plus account.
Or use your email
Forgot your password?

Want some assistance?

Contact us on: or call the hotline: +61 (03) 8623 9900.