According to the Nielsen Community Engine 2011 Social Media Business Benchmarking Study, the majority of organisations surveyed, who already use the social media, claim they will dedicate a greater proportion of the marketing budget to it in 2012. Attitudes are changing towards social media with more businesses embracing it in their marketing plans. Firms are increasingly sensitive to the power of the social media in promoting their products and brands, but are not always confident about how to use its power, or how to direct their budgets to maximise their returns.
Similar to traditional PR activities, it can be difficult to measure the impact of social media investment on revenues and profits. Finance directors when evaluating investment choices want to know what the Return on their Investment (ROI) is likely to be, and expenditure on social media is no different. However, more firms are reporting that social media campaigns are beginning to deliver solid, proven ROI. For instance, the 2011 Social Marketing Benchmark Report from MarketingSherpa found that the overall average social media ROI was an impressive 95%. That’s a dramatic shift from MarketingSherpa’s first benchmarking report in 2009, when soft marketing objectives, such as building customer awareness, was the key priority and marketers were finding it difficult to demonstrate any ROI from social media.
Three quarters of the companies surveyed by Nielsen last year have set aside more than 10% of their 2012 marketing spend for social media activities and are increasingly shifting from branding to building customer relationships and engagement. Through social media, businesses are able to create an emotive link with consumers and build a two-way relationship with them in a way they have never been able to do before.
The following McKinsey videos identify the role of the social media in purchase decisions and present case studies of companies using social media to tap into the interest in their brands and create communities. The videos outline the ways in which companies can use social media to learn more about their customers and foster brand loyalty.
An excellent presentation by McKinsey examines the role of the social media in the customer purchase decision. You can view this by following this link.