After a decade or more of investing in social media, the bloom is off the rose of social media for the Inc. 500. Companies are asking, “Where is the ROI?”
According to the 2017 Inc. 500 & Social Media study by U-Mass, almost all respondents pointed to building brand awareness as the most effective use of social media.
Social media ROI is a central concern among CEO’s with more than half reporting some degree of concern about resources devoted to this channel, and if the returns warrant the effort.
“Executives told me that social media is good for building brand awareness, but not so good for increasing sales,” said Nora Ganim Barnes, Ph.D., head of the school’s Center for Marketing Research, and the study’s co-author. “I have never heard this so clearly before.” Some actually used the word “ineffective” for ROI, she said. “To me that is very strong language.”
Whereas before, companies would put extra money into hiring a social media person, now they are investing that money in their corporate website, Said Dr. Barnes.
Email Marketing Works
Executives were asked which channels and strategies they felt held the most potential for increasing sales. Email marketing was the most popular response followed by Google AdWords. The least effective options included instituting loyalty programs and using traditional print or broadcast media.
That’s bad news for the advertising industry. WPP, for example, the world’s largest advertising conglomerate, is in a slump.
A recent Wall Street Journal article that revealed allegations of impropriety by its founder, Martin Sorrell, also said, “In recent years, though, traditional ad-industry players have come under considerable pressure from companies such as Google and Facebook, which dominate the roughly $230 billion global digital advertising market. The tech giants have the ability to work directly with advertisers, cutting out agencies.”
Social Media Usage
Once again, LinkedIn, was the most used channel followed by Facebook and Twitter, while Instagram recorded the biggest jump in usage year over year.
The study found the following:
- 92% of the Inc. 500 have a LinkedIn account, 90% have a Facebook account and 79% have Twitter accounts.
- LinkedIn and Facebook are reported as their most effective social media platforms while Twitter and YouTube are ranked among the least effective platforms for these companies.
- Use of blogs increased for the third year in a row, currently at 55%.
- 50% of Inc. 500 companies have no written social media policy.
- 30% have a strategy in place in the event of an online crisis/firestorm, (down 9%).
- Instagram continues to grow in adoption with 49% now using the platform.
Only 38% have a social media plan incorporated into their marketing/business plan (50% in 2016).The excitement of social media has dwindled. It appears that dedicated social media policies are still not the norm.
What the Future Holds
Social media may not have turned out to be the silver bullet for businesses, according to the study. It appears to be time for reevaluation of the role of social media in business. Where do these tools fit in the marketing mix?
Which accounts should be supported and which should be closed? Social media deserves a seat at the table, but ROI can only be realized if businesses invest in what works and move away from what does not.
Have you re-evaluated your use of social media?