Inc. 500 ROI

Inc. 500’s Social Media Conundrum: is the ROI There?

Despite its growing adoption by the Inc. 500, social media still confounds companies that are struggling to determine whether the ROI is worth their investment of time and money.

When asked to indicate their concerns about social media, respondents said their biggest worry is return on investment (59%) a 23% jump from last year, according to the University of Massachusetts’s Social Media and the 2016 Inc. 500 study.

This annual study by the school’s Center for Marketing Research analyzes and evaluates social media usage among the fastest growing small companies.

Is the ROI There?

Of those using social media, LinkedIn remains the most popular platform for the fifth consecutive year with 94% adoption. The second most utilized platform is Facebook (88%), a 6% increase from 2015. Twitter remains at 79% adoption for the third consecutive year.

The most notable change from 2015 is the rapid increase in adoption of Instagram, which jumped from 32% in 2015 to 46% in 2016, making it the fastest growing social media platform among the Inc. 500.

The study also indicates that companies are limiting their use of social platforms and choosing the ones that work best for them.

“Whenever we ask about ROI or effectiveness of social media, we get mixed messages,” according to study co-author Nora Ganim Barnes, Ph.D. “I think we still lack good metrics when it comes to the relationship between online efforts and sales. There is definitely the feeling that social media helps get the word out and increases brand awareness.

“When it comes to sales, we hear some say that social networking sites (mostly Facebook) drive purchasing. In the absence of the long awaited ‘buy buttons,’ it’s hard to know.

“Everything I’m seeing suggests that there will continue to be a lack of differentiation between major platforms with all facilitating picture sharing, video, messaging etc. That will probably result in some focusing on fewer platforms. It looks like Facebook will be a winner in that movement, while Twitter may be one of the fatalities.

“If businesses do not see the value for branding or sales and can get more ROI from Facebook and Instagram, you may start to see that movement. The politics you see on Twitter right now may scare some businesses away. The question becomes what is the liability when a business is attacked by a politician via a tweet? We’ve seen stock prices drop, sales impacted….it’s become a messy playing field since its use by politicians,” she said.

Key Highlights

The study found that:

  • 94% of the Inc. 500 have a LinkedIn account, 88% have a Facebook account (up 6%) and 79% have Twitter accounts.
  • Use of blogs increased for the first time since 2013, currently at 42%.
  • 50% of Inc. 500 companies have a written social media policy incorporated into their business plan (up 17%), 21% have a stand-alone social media policy, (up 9%).
  • 39% have a strategy in place in the event of an online crisis/firestorm, (up 12%)
  • Instagram is the fastest growing social media platform with a 14% increase in adoption in one year.
  • The top 3 concerns regarding the use of social media are the return on investment, time allocation and resources devoted to social media. The top benefit is building brand awareness.

Inc. 500 social media usage 2016

The dramatic increase in the adoption of Instagram suggests that businesses are still exploring new platforms while holding onto all previous accounts, according to the study.

Companies may be entering a period of great reflection, reevaluation and realignment of how new communication tools enhance not only brand awareness but sales. They will consider consolidation of accounts to enhance ROI.

With the ability to target using platforms that attract either mass markets, or niche markets, according to the study authors, social media efforts can become more efficient and possibly more effective in generating sales or easing concerns about the return on investment.

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  1. It’s been a while since I’ve work on something like this for a company, Regardless, I found it interesting. The hardest thing for a company is to find and see the benefit in developing and using social media in an effective ways. Then how it can contribute to the bottom line.
    Susan Cooper recently posted..Homemade Butter: #RecipeMy Profile

    • Susan — unless you’re selling direct to consumers online, it’s tough to evaluate the ROI. Even before the Internet, B2B companies, where I toiled, never quite believed in advertising for brand building. They couldn’t see the value — I know, as I tried hard to convince my CEO and wasn’t very successful.

    • Emily — We live in a visual world and Instagram enables you to edit your images before you post them, so that only enhances your brand even more.

  2. In my opinion the most important for Fortune 500 companies is to use social media platforms that their customers use. Their online brand is another issue they should take into account but reaching their customers should be their main priority. B2B companies need to have different strategies to B2C companies.
    Catarina recently posted..Renaissance for Muslim women?My Profile

    • Catarina — good point about hanging out where your customers are. I worked mainly in the B2B space and, for example, professional services firms only used Facebook for recruiting. LinkedIn, especially writing narrative posts and participating in Groups, is a more appropriate platform.

  3. I use Facebook, Instagram and Twitter. I find Twitter does not work for me as I do not have a big enough following. I am not active enough on Twitter so am literally non existent. Facebook and Instagram generate responses for my blog and make up business.

    One needs to spend time to understand how best to use social media to better promote their business. I am still in the process of learning and am enjoying it!
    Phoenicia recently posted..How often do you delegate?My Profile

    • Phoenicia — it’s true. You have to try the different platforms to see what works best for you. You already know that Facebook and Instagram generate responses, so maybe that’s where you should focus your efforts. We don’t have to belong to every social network.

  4. At least Fortune 500 companies can afford to invest in social media and hire experts. I too often feel like I’m shooting fish in a barrel. It’s a good thing I enjoy online interactions because I know many freelancers and writers view it as a pain. I recently joined Instagram after years of not being on there. It’s for personal use, not to promote editing services. It’s like a breath of fresh air given how politically torn FB can be at times these days.
    Jeri recently posted..#AuthorInterview: Bruce BallengerMy Profile

    • Jeri — if it makes you feel better, I don’t think a lot of the Fortune 500 companies have it figured out yet either. That’s the issue: is the ROI worth the time and money they are putting into it. At least we independent entrepreneurs are using our own sweat equity.

  5. Very interesting statistics Jeannette! I personally have started using Instagram a lot more and Facebook a lot less. However these two social media remains my top 2 most used ones. I do have a Twitter account too, but definitely less active there. It’s interesting to see how the other social media platforms stack up against each other. Thanks for sharing!
    Rosary recently posted..[comic] – the answer is appleMy Profile

    • Rosary — you may know that when you post on Instagram there is a place to check if you also want your post to appear on Facebook (which owns Instagram). That way you can kill two birds with one stone!

  6. Superb post, Jeannette. Having been out of corporate life since 1993, I find it amazing that most companies have social media strategies and plans! I’m thrilled that Instagram is becoming so popular. I love it as I am a highly visual person, and my brand (chocolate travel) is a highly visual activity as well, so Instagram is a terrific fit.
    Doreen Pendgracs recently posted..exploring Hato Mayor in the Dominican RepublicMy Profile

  7. Very interesting Jeannette. I’m little puzzled by Nora Ganim Barnes’ reference to the “long-awaited buy buttons” because FB pages have featured CTA buttons for some time. Otherwise, I think anyone who works online can appreciate the challenges you’ve outlined for us in this article and I don’t see the challenge changing much anytime soon. Thanks!
    Marquita Herald recently posted..Problems: Love ’em or Hate ’em, We’ve All Got ThemMy Profile

    • Marquita — true about FB, should have caught that. But, on the whole, I think her targets are right on target.

  8. Currently, of all the social platforms I am on, touchwood the most engagement I have experienced on Instagram. After I opened my account from mid-January this year my following has increased from two-digit to four. Also, undertaking certification for Marketing and Social Media Marketing helped me brush up the basics which one tends to forget and complicate things up. Loved the way you have presented the stats.
    Thanks for sharing 🙂
    Sushmita recently posted..How to become a True Entrepreneur, the journey from a Wisher to a Doer!My Profile