Social media marketers have heard this question before: What is the ROI of social media?
The answer to that is actually a follow-up question: As Gary Vaynerchuk once said, “What is the ROI of your mother?” His purpose was to prove that social media is a lot like relationships you have with your family and friends. It’s tough to pinpoint a singular action that your parents committed which directly resulted in you having some sort of personal growth or success. Instead, it’s a series of actions over time that creates that impact.
The same can be said about social media. It isn’t one tweet, Instagram post, or Facebook status update that is going to lead to direct ROI. It’s the culmination of building a following, creating engaging content, and connecting with your customers over months and years.
The ironic part about this discussion is that some companies don’t ask the same ROI question of other traditional advertising methods. How many sales did that billboard ad produce? How many customers did that magazine ad attract? If there’s anything to say about ROI of social media versus traditional advertising it’s that social media is more targeted, engaging, and – the best part – way more affordable.
If you look at the data on how much it costs to reach 1,000 people per media platform, you’ll be astonished at the numbers. Here’s a graph detailing the average cost of each channel:
When it comes to targeting, Facebook’s ad platform is as robust as it gets. The amount of data Facebook has accrued over time from user profiles, their behaviors, and 3rd-party data is impressive. They leverage that data for advertisers to narrow down their message to a very specific audience.
Let’s say I’m a real estate agent in Miami and want to find prospective home buyers, Facebook Ads will let me target “people in the market for a first time home” in a given geographic location, of a certain age, certain income bracket, and certain interests. This is just one of many examples proving how specific you can get with your targeting. That’s something that traditional advertising does not offer – it doesn’t even come close.
The choice is clear when it comes to setting a marketing budget for your company. Social media should be an essential part of your marketing mix, not only because its cheaper but because it helps you reach your target audience with more accuracy. Think of it as a sniper rifle while traditional media is more of a shotgun. That’s not to say traditional advertising is obsolete – it can work well in tandem with social and digital campaigns as part of a comprehensive marketing strategy. Just don’t neglect the power of social media when making your media planning decisions.
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