ROI is one of the most overused buzzwords every Client facing role faces. As of the last 5 years or so, calls about the ominous 'Social ROI' have been getting louder and louder. As if on the hunt for the Holy Grail, agencies and advisories build models to deliver - at a premium charge and rarely ever accurate (let alone standardized).
Sure, you can measure impressions. But what does that tell you, other than that clickbait and your adwords strategy work? Likes / favorites: Similar story. If every 'like' cost consumers a dollar, I'd be poor. Shares and pins...maybe you're getting warmer. But having an item or service on an inspiration board still doesn't mean that person is going to make a purchase.
So, what is a marketing manager in charge of a budget and tasked with 'improving ROI' to do?
Well, let's see what has 'worked' in the past: A snail mailer with a custom discount code - about as accurate a tracking mechanism as one can get. Radio: Not in the age of the internet and one's ability to just google the best discount out there (which may be radio). TV: Oh come on. So you measure who watches what - but you don't have a clue what these people actually do during commercial breaks. If anyone watched TV ads, DVRs wouldn't be nearly as popular as they are. I can tell you, if I can't skip ads, I will go out of my way to not watch TV spots, unless it's the Superbowl. And even then, I may DVR and skip to the 'best of' that about a thousand people have already tweeted about. So if TV is your benchmark, I'd say to you 'welcome to 1985'. Emailing codes may be the 2015 version of the good ole snail mail code, but let's face it - people are in email overload, so your offer may drown amidst the noise that is most people's inbox. And please, for God's sake, don't even try telemarketing. We have 'do not call lists' now - and people use them!
Hyper localized and targeted offers may be the way of the (foreseeable) future - if a prospect or potential Customer meets your criteria (based on Klout score, age, gender, geography, social activity, demonstrated loyalty, etc.), serve up a targeted discount code. If it gets used, you could argue your strategy paid off. And yes, the same could be said for conversion tracking in the digital channel. Deploy social network specific promotions (and don't make the CTA 'use code 'twitter' at checkout'), measure your exposure relative to use of the code and calculate your ROI from there, perhaps even check in app / network purchases if applicable. Opt in text messaging may be another option, depending and market and geography.
'What about A/B tests' you may ask...and boy, don't get me started on that! While I don't favor this for design / UX purposes, I could see a world in which you offer incentive 'A' via one channel (say your beloved TV) and incentive 'B' via another channel, say social - and see what happens. On a side note, if you were to spend even half your TV budget on social, I'd be willing to bet you money that social would dramatically outperform TV. I'd say this for most consumer and CPG products - anything in the premium or luxury segments would be the exception to the rule. For those, I could see social as a way to create interest - but ultimately it'll likely be a showroom/ boutique visit that will seal the deal.
If you're still reading (thank you!), here's a treat - a one liner 'so what’ of all of the above: If a company were to spend half their TV advertising budget on social, I'd bet that social 'would work' and likely outperform TV for most consumer goods.
Thank you for your time!