Two years ago, a study by Duke University found that only 14 percent of chief marketing officers saw a quantitative return on their social media expenditures. The good news is, the tides are beginning to turn: A new survey by small business community Manta revealed that 41 percent of businesses in fact see a return on investment (ROI) for their social marketing efforts.
The bad news, however, is that almost 60 percent still don't. And of the businesses that do see a return, the dollar amount is relatively small: Most bring in less than $1,000 a month as a result of social efforts, and nearly half said they generate less than $100 per month.
Many businesses know that social media is practically a requirement for modern marketing success; in fact, 34 percent of respondents said they have increased the time they dedicated to social media since last year. But with so little money coming in from these time-consuming activities, how can businesses make it more worth their while? Manta CEO John Swanciger said businesses first need to stop focusing solely on revenue as their measure of ROI. [Social Media Marketing Solutions for Small Businesses]
"A return can come in many forms," Swanciger told Business News Daily. "That's why it's important to determine your overall goal for using social media."
The Manta survey asked small business owners to define their primary goal for using social media. Thirty-seven percent identified acquiring and engaging new customers as their top aim, followed by driving awareness and marketing (17 percent), and generating leads and referrals (15 percent). Just 8 percent said their goal was building community, which Swanciger said should be a priority for small businesses on social media.
"For a long time, the mantra was that social media could bring in new customers," he said. "In reality, social media is a community builder, and your biggest fans are your already-loyal customers. When small businesses treat social media as the new word-of-mouth community, the real return will follow."
One mistake businesses can't afford to make on social media is treating all platforms as if they are the same. Swanciger emphasized the importance of viewing each channel as its own ecosystem, and recognizing that the audience following your business on Twitter looks and acts differently from your audiences on Facebook, Pinterest and Instagram.
"Because the audiences behave differently, the metrics to be measured will be different," Swanciger said. "For instance, you want to track click-through rates on Facebook, re-pins on Pinterest and retweets on Twitter, and then use analytics to look at the unique visitors who come to your website from social links."
Swanciger also advised taking advantage of the channels, like Twitter and Facebook, that promote social commerce, which 53 percent of businesses cited as their biggest ROI driver.
"Social platforms have heard the woes of small business owners and are starting to pay attention to this segment's buying power," he said. "Twitter recently partnered with Stripe to add a buy button, which directly monetizes a social following. Facebook has been pay-to-play for a while and is now tweaking its ads and promoted posts to be much more cost-effective for small businesses."
Manta surveyed 540 of its small business members about their social media marketing efforts. For full results, visit Manta's website.