August 12, 2010

Social media’s return on investment

social_media_monopoly
Image from Bite Daily.

 
Ayelet NoffHow do you measure the ROI of social media? This is a question that we are often asked by companies that want to enter the social media realm but are afraid or unsure of how to prove its success to their superiors. Want to show your bosses that social media works? Below is a great video from Erik Qualman (@equalman) at Socialnomics that showcases several social media ROI success stories.

Here are the top 10 facts you should remember from this video:

1) Gary Vaynerchuk grew his family business from $4 million to $50 million using social media.

2) Wetpaint/Altimeter found companies that widely engage in social media surpass their peers in both revenue and profit. (See Ranking the Top 100 Global Brands — PDF.)

3) Lenovo has experienced a 20% reduction in activity to their call center since they launched their community website for customers.

4) Burger King invested  less than $50,000 in their Whopper Sacrifice Facebook application and received an estimated return of over $400,000 in press/media value. They received 32 million impressions as a result of this campaign.

Ford-Fiesta-RS5) Blendtec quintupled sales with its “Will it Blend” series on YouTube.

6) Dell has already made $3 million in sales via twitter (I’ve heard this number has already increased to $6.5 million).

7) Only 18% of traditional TV campaigns generate a positive ROI.

8 ) 37% of generation Y heard about the Ford Fiesta via social media before its launch in the US. 25% of Ford’s marketing budget is spent on digital/social media. They are the only US auto company that didn’t take a government loan.

9) Naked Pizza set a one day sales record using social media: 68% of their sales came via Twitter and 85% of their new customers.

10) Software company Genius.com reports 24% of social media leads convert to sales opportunities.

Here’s the video:

As Alex Bogusky, Co-Chairman of CP&B says: “You can’t buy attention anymore. Having a huge budget doesn’t mean anything in social media…. The old media paradigm was “pay to play.” Now you get back what you authentically put in. You’ve got to be willing to “play to play.”

71% of companies plan to increase investments in social  media by an average of 40% because:

1) It’s low-cost marketing

2) Getting traction

3) We have to do it

If you don’t do it, you can be certain that your competitors will.

“Think of Twitter as the canary in the coal mine” — Morgan Johnston, JetBlue Airways

“Our head of social media is the customer” — McDonald’s

The time for social media is now.

Repubished from Blonde 2.0.Ayelet Noff is a partner in Socialmedia.biz and founder and Co-CEO of Blonde 2.0, an award winning digital PR agency with branches in Boston and Tel Aviv. Contact Ayelet via The Blonde 2.0 website , email, or follow her on Twitter and Google Plus.

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  • Great examples. While many people can get paralyzed by worrying about ROI, it is nice to know there can eventually be some.

  • Bigbang

    Does anybody has other examples ? It seems like it's always the same that are used to illustrate the ROI of social media …

  • I want to tell you My favorite Warren Buffett quote is this: We simply attempt to be fearful when others are greedy and to be greedy only when others are fearful.