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RSSThe problem with the comparison between social media and TV is threefold: 1. No marketer making this claim dedicates resources to social media in anywhere near the scale they dedicate resources to television, which makes it very difficult to measure social media impact at the macro/brand level (where it needs to be measured). 2. The spending of money against social media is in most cases wildly inefficient. 3. Very few, if any marketers, look at the full value of the research, CRM and message reach that their social media investment returns.
I believe this strongly enough that I am willing to issue a challenge to any marketer willing to, over a given period (minimum three months), spend an equal amount through social media and any "traditional" media outlet at scale (minimum of $1 million on each): If the ROI from social media is not equal to that from traditional media, my company will deliver free media until the difference is made up. This means, if you were planning on spending at least $2 million in media next quarter, this would be a potential no-lose situation and a great social media experiment. In addition, I would even be willing to pay for the research, up to an agreed-upon cost. Here are the ground rules:
1. Agreed-upon third-party measurement firm and methodology to measure impact on brand attributes (awareness, purchase intent, offline sales impact).
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2. Agreed-upon attribution of value to customer research and lifetime value of customers self-identifying to receive future messaging (new fans on Facebook).
3. The cost of creative production and materials is included in the resource allocation against the platform. If any creative is shared, cost can also be shared.
4. For both traditional and social media executions, creative concepts and resource allocation to be agreed upon upfront.
Why am I so confident that the ROI of the social media campaign will deliver? Because CPMs are a lie. If you take a $30 CPM rate for television, factor in TiVo and people who aren't paying attention, then factor in a rate of message waste (males watching tampon ads), the true CPM is much, much higher.
Whereas you can measure, and pay for, only active attention in social media. And you can deliver a variety of message experiences, from deep engagement and interaction (which can deliver a more lasting impression), to passive message reception. And when you add in the value of customer research and relationship management, it tips the scales in favor of social media. Yes, buying $10 million in television sells product and drives up in-store foot traffic at a macro level, but so would any other source of media if bought at equal scale and effectiveness.
One more main reason why I know social media ROI would outperform when purchased and delivered at scale is that the competition for consumer attention among marketers is not efficient in social media, whereas in traditional media, the market has priced up the cost of media to an "efficient" cost. Simply put, the ratio of "total resources vs. total consumer attention" is much greater in traditional media than it is in social media, which alone provides a huge opportunity for marketers.
I don't expect anyone to pick up the gauntlet I am laying out here (although to be clear: I am fully willing to hold up my end), but I do feel that the measurement of ROI on all media spending should be considered on even ground in order for marketers to maximize their allocation of resources.To see the presentation that actually got me to finally offer this challenge, which I had been thinking about for a while, check out The Brand Builder Blog: "Social Fresh, good friends, and the definitive Social Media ROI presentation."
Okay, anyone want to step up? Anyone think I am wrong? @ me www.twitter.com/joemarchese and share your thoughts in the comments below.
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With regard to your savvy proposal: the one thing you can't pay back is time lost on a faulty experiment. Think media mix, and you'll have plans and better sales.
With the rise of social media, and the promises made of it, these traits have become even more resoundingly driven home (indeed, your article makes the case by pointing out TV is even more expensive than people believe, which implies online is even cheaper than anyone imagines - and therefore even easier to "prove"). But who wants to put the effort into proving it? Nobody has ever really "proven" that TV works - there are alot of studies that can show it has a degree of efficiency, but the claim that "half my ad budget is wasted I just don't know which half" remains intact today.
I think the challenge you've posed may clear up some misconceptions about not only social media, but online in general. However, I think in the end we may find that there are only minute differentiations rather than large ones.
This would help online and social media immensely - it would prove it's just as valuable, at the very least. I hope that it proves much more. But based on my own utilization of online and social media advertising, I remain skeptical that it is more powerful in any statistically meaningful way.
I'd love to see otherwise.
(p.s. your sites registration process is a huge barrier to submitting comments, please remove or replace with FB connect...)
@Stephen - I think you meant "huevos" or perhaps it's primo "cojones".
TO'B