Monday, March 21, 2011

How Spanish companies measure ROI on Social Media

TerritorioCreativo's study, Marketing in Social Media: How Spanish companies use blogs and social networks, looks at, among other things, how Spanish companies measure ROI on Social Media efforts. I recently posted about ways in which companies measure the 'value' of a fan or follower. Defining the measurement \by which you determine a satisfactory ROI is important. However, many compaines are still measuring simple stats such as the number of fans or followers, instead of more advanced statistics such as conversion rates or participation.

2011 is predicted to be the year when mesuring ROI of Social Media becomes more scientific. In 2010, Spanish companies used the basic measurements to determine what I call "perceived ROI". "Perceived ROI" is focused on 'brand awareness' rather than quantifiable 'return on investment' in a monetary sense. That's not to say it's an incorrect measurement for some companies, but it's not a complete way to determine ROI.

TerritorioCreativo's study found that:
  • More than half of companies evaluate the effectiveness of Social Media by the number of visits, fans, followers or subscribers
  • 8 out of 10 companies believe social media is effective to achieve brand awareness.
  • 75% of companies using social media are satisfied with the results of SM activities

ROI Social Media - TerritorioCreativo

Quantitative data, such as visits or the number of fans, followers or subscribers achieved, are most commonly used to measure the effectiveness of social media. More complex aspects of assessment such as customer loyalty and reputation or brand awareness are measured by 45%+ of the companies. 12% of companies do not measure the effectiveness of social media at all.

Regarding investment in social media, within the total marketing budget, most companies using social media spend less than 10% marketing online. 

  • More than half of firms indicated that they would increase their online marketing budget
  • Most companies that perform social media marketing also invest in SEO, SEM and email marketing
  • A significant increase is expected in the number of companies investing in social media marketing, SEM, online video affiliate programs.

investment social media
ROI Social Media - TerritorioCreativo
This survey data shows that Spain is still catching up with the way other countries such as the USA use social media. In some ways, Spain is ahead of the US (smartphone adoption, for example), but widespread and sophisticated use of social media by companies, along with measurement of ROI is still lagging.

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