Social media marketers have heard this question before: What's the ROI of social media?
The best answer is actually a follow-up question: As Gary Vaynerchuk once said, "What's the ROI of your mother?"
Vaynerchuk's intention was to highlight that social media is a lot like relationships you have with your family and friends. It's tough to pinpoint a singular action that your parents committed which directly resulted in you having some sort of personal growth or success. Instead, it's a series of actions over time that creates that impact.
The same can be said about social media. It isn't one tweet, Instagram post, or Facebook status update that is going to lead to direct ROI. It's the culmination of building a following, creating engaging content, and connecting with your customers over months and years.
The ironic part about this discussion is that some companies don't ask the same ROI question of other traditional advertising methods. How many sales did that billboard ad produce? How many customers did that magazine ad attract? If there's anything to say about ROI of social media versus traditional advertising it's that social media is more targeted, engaging, and - the best part - way more affordable.
Comparing Social Media Ads to Traditional Ads
If you look at the data on how much it costs to reach 1,000 people per media platform, you'd be surprised by the numbers.
Here's a graph detailing the average cost of each channel:
How Targeted Can You Get?
When it comes to targeting, Facebook's ad platform is as robust as it gets. The amount of data Facebook has accrued over time from user profiles, their behaviors, and 3rd party data is impressive, and they leverage those data stores to enable advertisers to narrow down their message to very specific audiences and market segments.
For example, let's say I'm a real estate agent in Miami and I want to reach prospective home buyers - Facebook Ads will let me target "people in the market for a first home" in any given geographic location, of a certain age, certain income bracket, and certain interests. This is just one of many examples proving how specific you can get with your targeting, which is an element that traditional advertising doesn't offer. It doesn't even come close.
The choice is clear when it comes to setting a marketing budget for your company - social media should be an essential consideration as part of your marketing mix. And it's not only because its cheaper, social advertising also helps you reach your target audience with more accuracy. Think of it as a sniper rifle while traditional media is more of a shotgun.
That's not to say traditional advertising is obsolete - far from it, and it can work well in tandem with social and digital campaigns as part of a comprehensive marketing strategy. But don't neglect the power of social media when making your media planning decisions.