IROI: Immediate Return on Investment
Monday, June 25th, 2012
This is the era of Social Media. With over a billion consumers offering opinions, sentiments, and insights online, Social Media has in a few short years eclipsed many traditional forms of expression in terms of volume and importance. As a result, the professional world is abuzz with discussion of this new form of communication and interaction, concentrating on its positive, even revolutionary aspects. However, there is still a lot of discussion by an alarmingly large group of pundits that social media lacks clear ROI. In my view since social media generates ROI more directly and with higher velocity than other forms of marketing. It’s the era of Social Media for a reason!
Media planning and buying is an area in which we see this social media-led advantage in bold-relief. In the traditional model, advertisers and media buyers make and execute buying decisions and then wait for the results to come in. It’s often hit or miss and mid-course correction is impossible. Nuanced feedback is virtually non-existent and when insights are generated they are delivered after-the-fact. Billions of dollars and thousands of people-hours are expended with little result to show. Of course, there are effective media buys but they are rarely driven purely by empirical or predictive data. While hits occur, the ratio of hits to misses is sub-optimal, a bitter pill to swallow in turbulent economic times.
Not so when media planning and buying is informed by social media. When it is, you benefit from immediate ROI and take the guess-work out of your decision-making. This is true for three core reasons:
- Social media provides real-time and contextual data
- This real-time data, when deciphered and interpreted, allows you to make data-driven decisions
- Social media is underpinned by technology which allows for speed; meaning you can measure and react with no delay
When these are combined with a team that is ready to hone and adapt quickly, media planning and buying can be taken to the next level.
A few examples are in order here.
Leveraging the social nature of TV
In the traditional model, a media buyer contracts to purchase spots based on imperfect knowledge of audience attitudes. The spots run and the buyer gets feedback three months later, well outside the window of possible action. With social media, you get feedback instantaneously whether on content, messaging or the theme of your ad; you learn what is resonating with the audience of a given TV program minutes after it airs! With that insight you can make changes on the fly and either avert disaster or further enhance an already-popular campaign. An engaged TV audience with spot on messaging gets more happy consumers, and is a profitable win-win that pays for itself quickly.
Optimizing media choices
In the traditional model, smaller companies with new and disruptive products and services are often locked-out of media buys because they lack the incumbents’ financial muscle. With information and insights derived from social media, these companies can find alternate and more effective channels to disseminate their messages in real-time and with high-fidelity to audience attitudes and behavior. Social media democratizes the playing field for small and medium companies for whom attention and exposure is priceless, and again generating an immediate ROI.
Perfecting product placement
In the traditional model, a media buyer spends valuable dollars to place an advertiser’s product in a media outlet. The decision about which outlet is made often with a gut decision based on limited information and the resulting uptake, or lack thereof, cannot be measured with precision. It’s a shot in the dark, which not only costs dearly but forecloses on other opportunities. With socially-informed buying, a buyer can test the potential reception of products in real-time and make data-driven decisions accordingly. This process leads to finding the most relevant audience and most relevant outlet, driving immediate ROI and allowing an advertiser to avail the best opportunity available.
In today’s world of media and marketing in general, ROI is not a luxury it’s a must. By informing your decision process and actions with the data from Social Media, you can guarantee the most you’re your marketing spend and in do so immediately generate what we call an IROI.
Paul Dunay is the Chief Marketing Officer of Networked Insights, a leader in social media analytics, and author of four “Dummies” books: Facebook Marketing for Dummies, Social Media and the Contact Center for Dummies, Facebook Advertising for Dummies and Facebook Marketing for Dummies 2nd Edition. You can learn more here.