The True Value of Social Media
By Stevi McCoy Co-founder, Revel Experiences | June 2015
Over the past ten years, social media has gone from "probably a passing fad" to a strategic imperative. Brands are dedicating significant resources to cultivating a rich online presence and every year, marketers invest more and more in their overall social strategy. The hotel industry has been particularly active in the social media space, using this digital channel to not only engage with existing customers but also capture the attention of prospective guests.
Yet despite its growing popularity in marketing strategies, social media – or rather the value of social media – remains elusive. Unlike traditional media that, for the most part, delivers quantifiable ROI, social media's effectiveness is correlative at best. What metric is most effective? Should brands count "likes," "tweets," or "posts?" Do these actions translate into sales? How do marketers know that their investment is actually growing their bottom line? Even independent surveys and studies on the subject seem to contradict each other. In a 2013 study, Forrester Consulting found that people who engaged daily with a brand on social media were likely to make twice as many purchases with that brand as someone who only engages monthly. Yet according to a Gallup survey, 62% of U.S. adults who use social media say these sites have no influence on purchasing decisions.
This lack of consensus leaves many marketing execs skeptical about just how much they should allocate to social media. Some view it as a necessity, while others wonder if they aren't throwing money into the wind. And yet, despite this confusion on true ROI, very few brands chose to completely ignore social media. Quite the contrary. Most big brands realize that this is where their customers are and every year, allocate more and more resources to their social media efforts. They substantiate their investment with claims that social media drives soft returns like "heightened brand awareness" and "brand loyalty." In lieu of formal analysis on economic return, many marketers simply measure activity on the specific social media applications, but fail to connect this behavior to tangible market outcomes. They keep track of their "likes" and other measurable data, but have difficulty correlating this metric to bottom line performance.
What makes social media so much harder to measure than traditional channels? Advertising has never been an exact science, but the variables inherent in social media confound even the most adept marketers.
The Quest to Monetize Tweets
Luckily, as digital and social media has evolved, so has technology aimed at quantifying its worth. Fairmont Raffles Hotels utilizes such analytic technology to help maximize return and drive site traffic via their Twitter campaigns. To maximize their spend, Fairmont's Twitter activity must do more than simply generate online buzz – it needs to accurately identify and track website traffic generated by their tweets. Solutions such as campaign tracking allow Fairmont to tag links so that their analytics tool can recognize and measure the campaigns that brought visitors to the site. These tags can be used to track paid search and display campaigns, e-newsletters, social media campaigns and more.