Evaluating RoI of social media

There is a lot of debate lately about which social network is more valuable for business owners to undertake brand promotion, Facebook or Twitter. The talk revolves around Twitter followers and Facebook fans. As advertising budgets remain conservative owing to the aftereffects of recession, finding an answer to this question, in a way, represents the Holy Grail to evaluating the return on investment (RoI) of today’s all powerful social media.

Here are some interesting facts in this regard:

  • A recent study done by Forrester upended the conventional wisdom by pointing out Twitter followers perhaps have the potential of becoming more valuable than their Facebook counterparts in the future.
  • Though it is not easy to precisely quantify either follower or fan with an absolute value (though many experts and analysts have tried the same), the research has confirmed that Twitter users are more likely to buy products/services from brands that they follow (37% versus 21%), and also recommend them to friends (33% versus 21%) as compared to Facebook fans.

Facebook offers a great advertising opportunity

The above two aspects are the key yardsticks by which a majority of social media branding campaigns and their effectiveness are measured. However, the fact still remains that Facebook advertising opportunity is unparalleled for brands. Here is why?

With nearly 550 million users across the world (out of which nearly 165 million are in the US alone) the network is indeed a powerhouse of customer connectivity where content and ideas can be shared and circulated fast.

In fact, word of mouth has been considered the most powerful form of advertising for long. Right now, there is hardly any other platform – on or off the Web – for people to share ‘brand sentiment’ as rapidly or as effectively as on Facebook.

Brands realize this as well. For instance, Bing employed Zynga, a social gaming network, for building a Facebook fan base for its launch. It offered Farm Cash rewards to a massive base of ‘FarmVille’ fans. Although such one time pushes can enhance Facebook fan base, they also tend to degrade the very value of that base. This is because the offer is a bit disconnected from the brand.

Twitter: A ‘pull’ medium on its own

On the other hand, Twitter is leveraged and utilized as a ‘pull’ medium. Twiter Followers are more likely to start conversation, thus seeking out certain brands to either compliment or even complain. While this mode of outreach can be initially negative, it offers brands with the great opportunity of engaging in the moment to remedy an adverse situation and to enhance brand loyalty.