Business , chart , digitalmarketing , Social-Media
Social media. It’s a minefield of data. From likes to shares, pins to loves, celebrations, dislikes, retweets… the sheer number of metrics is overwhelming.
But every like, comment, share or retweet is a sign of how well your social media marketing activities are doing and proof of a strong return on investment, right? Well, no. Not according to the C-suite.
The board is becoming increasingly frustrated with meaningless metrics that don’t help to reach business goals or translate into revenue and it’s affecting their perception on the worth of digital marketing in general.
The harsh truth is that likes, shares and engagement rates don’t matter to the board. In the Bango Board to Death survey 76% of chief executive officers (CEOs) said they don’t care about retweets, 65% are not interested in likes and 76% said they don’t care about impressions.
Nearly half — 42% and 40% respectively — of CEOs surveyed saw generating new customers and increasing profits as the most important objectives of marketing. Despite this, 59% said that social channels don’t generate sales for their businesses and 77% don’t see digital advertising as a reliable source of new customers or sales.
Clearly social media marketing is failing to prove it’s worth to the people that matter. And with 62% of CEOs believing too much marketing budget is wasted on activities that don’t deliver meaningful results, it’s time for marketers to reassess their social media marketing strategies.
But the good news is, this doesn’t mean ditching social media altogether.
Why is social media success not translating to revenue?
Social media marketing campaigns can add value, but only when they are targeted at people who actually want to buy your product.
Most social media campaigns run on platforms like Facebook, Instagram and LinkedIn are targeted based on information such as age, job, gender, likes and even people’s search terms.
While this information may provide some insight into the kinds of things certain demographics are interested in, it’s not a big enough indicator of intent to buy. As a result, social media conversion rates are shockingly low.
For example, Instagram’s conversion rate is 1% and Twitter and Pinterest’s are at 0.77% and 0.54% respectively. Facebook fairs better depending on the vertical in question, with the fitness industry holding the highest conversion rate at just over 14% and education at just over 13%, but when it comes to the tech industry the average conversion rate is a dismal 2.31%.
Also read: The CEOs across the world reveals that they are speculating that digital transformation, AI tech and corporate engagement will stimulate a huge economic growth in 2021
With conversion rates rarely reaching double figures, it’s no wonder marketing professionals are falling back on engagement metrics to justify their activities. But with 77% of CEOs expecting marketing to have a measurable impact on their business’ bottom line, engagement rates are no longer going to fly.
However, if marketers can prove that their activities are more directly targeted towards those who buy, 71% of CEOs say that they would increase their marketing departments’ budgets.
So, the question is: how can digital marketers make sure their social media activities are having a positive impact on revenue?
It’s simple … Purchase behavior targeting.
What is purchase behavior targeting?
Purchase behavior targeting is a revolution for digital marketing and one of the best kept secrets in the industry. Rather than targeting at a specific gender, age group or profession, marketers can target campaigns at people who have spent their money on similar products and are therefore more likely to buy them again.
It removes the ‘guessing’ element of social media marketing and allows marketers to target campaigns directly at those who are most likely to purchase the product. No more convincing stakeholders of the benefits of high engagement or click through rates — just high conversion rates and more paying customers.
What does this mean for the future of social media marketing?
Purchase behavior targeting is not a new concept. In fact, Facebook has been offering their first party payment data to aid purchase behavior targeting of campaigns on its platform for years.
As with all targeting data is king, and the limitations of using only first party data meant that this form of segmenting demographics never really took off.
Now, with an emerging set of tools offered by ecommerce providers — who are analyzing third party data and payment insights from billions of pounds of consumer spending across major consumer platforms — marketers can direct campaigns more effectively, segmenting their ads to only target customers with the highest probability of buying a product
As these emerging platforms rise in popularity, marketers can expect conversion rates to rise and their impact on the bottom-line increase. Meanwhile, CEOs can breathe a sigh of relief that they no longer have to hear about the benefits of a Like and can be presented with meaningful results and a strong return of investment on their social media marketing spend.
By Anil Malhotra, CMO of Bango