Ben Cathers just posted a piece entitled: "Why you can't calculate an ROI in social media -and that's okay." I would argue, if you can't calculate an ROI for Social Media, you shouldn't be participating.
Let's go back to the basics.
Companies advertise to sell products/services. Period. Metrics like brand affinity, brand recall, etc. look great on paper. But you can revel in secondary metrics all day long, as long as you didn't increase sales of your product/service, your advertising/marketing has failed. Social Media should be treated the same way.
All divisions of your brand spend 100% of their time to generate revenue: Call Centers, R&D, Sales Department, Marketing, PR, Accounting, Advertising, PR. Each resource has a specific cost, each resource yields a specific result. Spending time on Social Media for any of these departments might cost you immediately in efficiency and productivity. As a CFO, you would be a fool to allow any division to spend productivity time on Social Media if it decreases your bottom line. A Social Media budget doesn't just show up, it has to be funded by investing less in other areas of the enterprise. That's the reason why each brand needs justification to invest in Social Media.... Read more
How Science Started to Dominate Advertising
In 1926, President Calvin Coolidge pronounced a benediction on the business of advertising:
"Advertising ministers to the spiritual side of trade. It is a great power that has been intrusted to your keeping which charges you with the high responsibility of inspiring and ennobling the commercial world. It is all part of the greater work of regeneration and redemption of mankind."
Between 1926 and today, we proceeded dealing with advertising as if it was more science than art. Reach and frequency were introduced, new metrics like GRP and TRP started to dominate the language of the business and now we measure our reach in terms of impressions. Coolidge's idea of inspiration and spiritual redemption through advertising was replaced by spreadsheets, perspiration and a dominance of left-brain thinking.
Is Advertising Art Or Science?
If advertising is a matter of data and science, why do we remember an Apple commercial from 1984 that ran once? And why do I get so annoyed when I see the same, mediocre ad over and over again, behaviorally targeting the hell out of me and perfectly aligned with reach and frequency formulas? I would argue, there's an advertising world outside of science. It's called creative... Read more