With the holiday shopping season officially over for a few weeks now, I am surprised I have not seen many pundits trying to determine whether social selling actually works. This recent AdAge article however caught my attention. It cites a study conducted by the e-commerce analytics company Custora that found social media yielded just 2% of online holiday retail sales. The study looked at how many social posts with a ‘buy now’ call-to-action were clicked by consumers. Do you see the issue with this premise? What about the customers that interacted with your brand through organic search, your ads, banners, social posts, etc. and then decided to purchase your product?
Marketers call this ‘last-click-attribution’, and while straightforward to explain, it can be extremely misleading. Attribution theory in marketing is not new and has its roots in psychology. It was first developed by Fritz Heider in the early part of the 20th century and according to Wikipedia, “The purpose of marketing attribution is to quantify the influence each advertising impression has on a consumer’s decision to make a purchase decision, or convert”.
Don’t get me wrong. The convergence of paid, owned and earned media is making attribution of social media to sales very hard. As a matter of fact, according to this Forrester Research study from last summer, 38% of marketers still struggle with measuring ROI from social media.
So what you should do if you are a marketer investing significant resources and need to demonstrate business value to your CFO or CEO? These are 3 principles that have served me well over the years:
1. Think marriage, not a one-night-stand: This was the title of a post I wrote back in 2010 and it is as true now as it was back then. You need to think about how to build relationships with your prospective customers. Stop looking for a magic bullet to magically solve your lead problem by posting social ads. I firmly believe that while consumers do express intent in social media, that number is minuscule as compared to the opportunity this medium presents to nurture relationships that will ultimately convert to sales.
2. Stop thinking social (only): Social media is a means to an end rather than an end in itself . Unfortunately too many marketers still view social as a silo and are focused on the vanity metrics of fans, followers and likes with no understanding of how social media can further #1 and ultimately their revenues. If you are still treating social as a silo, now is a good time to break down these walls. Go talk to your colleagues in marketing communications, PR, product marketing, or alas your marketing campaigns team. Ask them what problems they are trying to solve and work together to help them. You ‘d be surprised at the opportunities you might find to truly influence your business.
3. Think big, start small, fail fast: Yes this feels trite and obvious, but it is also true and under-appreciated. They key is to experiment and fail fast but always keep the goalposts (i.e., strategy) in sight. Don’t try to ‘embed social media across marketing’ initially. Instead focus on one specific problem your colleagues are trying to solve and help them. For example, help with a new product launch, leverage social media for one of your customer events, or add social media into the mix of one of your marketing campaigns. By the way, you will fail and that’s OK since that’s how most of us learn. I can go on with all the mistakes I have made, but that’s probably left for another post.
What has worked for you in the past? As always I look forward to your thoughts and comments.
P.S. If you are interested in learning more about attribution theory, I recommend reading either this post by Avinash Kaushik or this one by Michael Wiegand. Not for the faint of heart, but definite must-reads if you are facing challenges trying to measure the ROI of your multi-channel campaigns.