What’s the ROI of Digital Marketing? [Infographic]

Image courtesy of Occam’s Razor

As you see above, defining the ROI of digital marketing is a challenge.

Measuring it is easy, once you have the right definition.

What’s a Tweet worth?

People ask me all the time: What’s a social post worth?

My answer?

Likely NOTHING!

Yeah, I know. Lots of folks disagree with me, but, as noted in the infographic below, the answer is — it depends.

Does that mean digital marketing doesn’t work?

Absolutely NOT!

The value of digital marketing

First, the value of a Tweet or Like or Pin depends on the size of your network — the larger the network, the greater the value of a social post. A network of 16,000 Twitter followers requires only 6 Tweets to return a value equal to the average US car payment– $450.

But the story doesn’t end there.

Size is only one element relevant to the value of digital marketing. Engagement is a much bigger reflection of value. A highly engaged network shares much of what you post across social networks. All those Likes, RT, Re-Pins, etc add up to huge amplification of your message. Thus, a single Tweet, Post, Pin gets magnified to a much larger audience than the original network.

Owned versus earned media

In digital marketing, we refer to this as owned versus earned media. Owned media belongs to the brand and represents their Facebook pages, Twitter accounts, etc. Earned media represents the amplification you earn through motivating followers to share your posts.

Engagement comes from posting the “right” content — content your followers find valuable. Valuable content:

• Solves a problem
• Entertains
• Respects your followers

In addition, the right content is posted on a consistent basis when your target audience is likely online. Earned media is likely the most valuable media and much cheaper than paid media (online advertising).

Why is earned media so valuable?

Earned media has so much value because it has the appearance of objectivity. Think about it, we’ve all become so jaded by advertising we barely listen when brands tout their benefits. But, when friends tell us something, we believe them. A Tweet from a friend we believe.

When your followers share your content, they not only amplify your message, they de-commercialize it — make it more believable because it comes from friends rather than the brand. The value of earned media is so valuable, Facebook even use it to support sponsored posts by showing you which friends like the brand.

So, it’s not just the size of your network, it’s how engaged they are.

Influencers

Some brands pay influencers by offering money or free product (hence the offers made to influencers with high Klout scores). I personally think paying influencers is a bad practice as it calls their motivations for sharing content into question and, if used frequently, dilutes their value. I’d encourage brands to develop relationships with influencers rather than paying them.

But, putting the motivation issue aside, evaluating influencers needs more than just assessing the size of their network, and evaluating how well they do in terms of engagement.

Building engagement

If engagement is more valuable than the size of a social network, an important question is: How do you build engagement?

Valuable content

Again, the best trick to building engagement is producing valuable content on a consistent basis. Value comes in the eyes of your target market. Sometimes that’s creating content that solves a problem — like this. In other cases, content that’s interesting, unusual, funny, surprising, or emotionally charged drives engagement.

My advice to new clients is to try various types of content, then see what works best with your target audience by monitoring both reach and engagement for each post. Likely, some combination of entertaining and problem-solving content works best.

Be sure to avoid over promotion. A recent guest post argued for the 80/20 principle where content is concerned — 80% valuable, 20% promotional . I actually try for something closer to 10% promotional content.

2-way conversations

You need to engage with followers if you expect them to engage with you. Thank them when they share your content and when they say something nice about your brand.

User generated content

Treat your network as a valuable part of your social network and get them to generate content.

Ask their opinions about your brand, hold contests to encourage them to generate content about your brand, provide tools to create a true community around your brand.

Engage employees

Employees are likely the best advocates for your brand. Not only can they act as evangelists, they can share unique perspectives about your brand that consumers find engaging. For instance, someone working to make the product might share a typical day at work, a buyer might talk about how he/ she builds relationships with suppliers, a sales person might share about interactions with retailers.

Sharing insider knowledge makes consumers feel like they’re getting a backstage tour of your operation and makes them more engaged with your brand.

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How Is UGC Changing Content Marketing?

Consumers find the word-of-mouth nature of user-generated content to be particularly trustworthy, which has resulted in a surge of popularity comparable to that of influencer marketing.

"User-generated content" (UGC) may have become a clichéd marketing buzzword, but it's still one that resonates enough with consumers to have shifted the nature of content marketing.

According to digital think tank L2, 55 percent of consumers trust UGC over other types of marketing. Coca-Cola for example, attributed a 2.5 percent quarterly sales increase in part to an Instagram gallery centered on the massively popular "Share a Coke" campaign from last summer.

Why is UGC so popular with people? Authenticity, according to Tessa Wegert, communications director at digital agency Ensighten. 

"Brands are producing more content than ever, and consumers are starting to feel overwhelmed," Wegert says. "There's the potential for native ad and brand content blindness, particularly if the content doesn't ring true to the viewer, but UGC can combat that. We all know the power of word of mouth, and there's an element of that with UGC. Consumers are seeing their peers speak favorably of products and services. It's trustworthy and it's visual, and those are powerful things."

The visual nature of UGC makes it particularly popular on Instagram. Hyatt uses location tags to incorporate Instagram photos into its email marketing, while Sigma Beauty, for whom Instagram has become the top source of referral traffic, curates 16,000 user photos each month.

"When I have an army of 16,000 marketers [marketing] for me, it's a far more cost-effective, timely way for me to produce marketing content for my brand," says Matt Langie, chief marketing officer at Curalate, the visual and analytics platform behind #SaksStyle. Also known as "the shoppable selfie," #SaksStyle is a hub made up of pictures users have shared from Facebook, Twitter, Tumblr and Instagram.

"The smart brands are the ones going, ‘We're seeing behavioral changes; how do we connect that with a sale?" Langie says. "What's interesting to me is that this is really becoming a conversion of social, content and commerce where consumers are sharing what they're doing on social and brands are developing more and more authentic imagery. The missing link has been connecting all this to commerce."

The way Wegert and Langie speak of UGC is parallel to the sentiment toward the growing trend of influencer marketing. According to content and influencer marketing firm IZEA, more than half of digital marketers invested in paid social influencer endorsements last year. For example, Michelle Phan, whose beauty tutorials have helped her accrue nearly 8 million followers on YouTube, was recently featured in a Diet Dr Pepper campaign.

For brands, the idea is that regular people see Phan as more relatable than someone like, say, Gisele Bündchen. According to Langie, the same principles apply to UGC.

"[Consumers are] tired of the manufactured image. They want something that's authentic to a consumer who looks just like me: maybe a little heavyset, maybe a little too skinny, maybe not handsome," Langie says. "Everyone has their own shortcomings and at the end of the day, I'm not buying a product because I want to look like Gisele. I'm buying it because it makes me look good."

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