There are two ways that social media initiatives can directly benefit your business:
1 – By generating revenue
2 – By lowering existing business costs
For whatever reason, most of the ‘What is the ROI of Social Media?’ discussion focuses on the first area. But the 2nd area is just as important, if not moreso when it comes to social media initiatives. I’ve talked before about how companies can and ARE reducing their costs by utilizing social media.
When I was in Atlanta last week working with NCI, Adam shared a few case studies of how NCI’s clients had benefited from using social media, and I wanted to share one of them with you.
In late 2009, The Bainbridge Companies hired NCI to provide social media services for 21 of its apartment communities. Now several months into the program, Bainbridge was already seeing nice boosts in organic traffic to their property website (67% increase in total), and also was seeing the benefits from an SEO perspective. So much so that Bainbridge decided to completely eliminate its pay-per-click advertising by the end of 2010.
This will let Bainbridge realize a cost savings of over $100,000. In addition, Bainbridge reports a higher conversion rate from the non-paid, organic traffic that’s being generated by the properties’ social media efforts.
BTW one aspect that I thought was interesting was that several times during the last year, certain Bainbridge units have had to deal with severe weather issues from time to time. Since the units had a set of social media channels in place, they could communicate severe weather information to residents, who were very appreciative of these efforts. This is a classic example of how the potential of social media as an instant connection tool can improve customer satisfaction.
The arm of NCI that handled these social media initiatives for Bainbridge was Community Sherpa, and you can learn more about them here.
Just curious, has your business noticed a cost savings from using social media? If so, what areas were affected?
This is a very perfect case of costs saving, but sometimes the immediate saving or revenue increase isn’t always measurable, which is in my opinion what really prevents businesses from considering social media somewhat credible. This doesn’t stop my company but I see it as a problem especially in so to say, “old school management clubs”.
Hi Gabriele! I think the bigger problem that many companies have is that they don’t measure their results BEFORE launching a social media initiative, then don’t track results AFTER.
For example, let’s say in the above example that the company was tracking its search traffic and knew with its $100K annual budget that it could expect to get X number of visitors from search each month to its website. But after launching the blog, the number of search visitors rose by 300 in the 1st month, then 600 in the 2nd, and 1,000 in the 3rd. If the company is actively tracking its volume of search traffic, it can see almost immediately that the blog is generating search traffic organically.
Again, you can’t measure a return until you first START measuring. Too many companies just throw up a Facebook page and start a Twitter account then 3 months later decide it’s time to have the ‘is this stuff working?’ talk. Each company needs to know what ‘success’ will look like for its social media efforts BEFORE they start. And that ‘success’ needs to be guided by a solid strategy and set of goals for social media usage.
Yes you’re right Mack, now that you mention it I can think about cases like that even in my own experience.
Big claim. Not enough details to back it up that the total amount saved is attributed only to social media.
SEO,alone can save businesses a lot on money in PPC costs. So I’d like to know exactly what percentage of traffic was attributed to their social media efforts v traffic which came from their SEO efforts. Is there a full case study available for this?
Kristof, the savings is coming from the fact that Bainbridge is going to eliminate a budgeted amount equal to over $100,000 that it had set aside for pay-per-click advertising. So obviously, the growth in organic traffic and search traffic that Bainbridge is seeing from its social media efforts are enough for it to make this budget move.
I’ll talk to Adam and see if they have more information available on this case study.
I understand how the number was derived. My question stemmed from the headline which leads a reader to believe the 100k savings was directly attributed to social media — and nothing else. Your reply to Gabriele makes a great point that a baseline needs to be established *before* any new SEO or social media initiatives are started. Hopefully Adam has more details. Thanks
Kristof,
Your question is right on. I also wonder about these things and need some validation. It often amazes me how the creation of content on a business blog can have such dramatic impact on website traffic.
We do have a fuller case study (see release here: http://www.network-communications.com/news/Aug02.2010.html) that showed a number of things:
-The number of keywords that organic web visitors used to find Bainbridge’s website increased at the same rate, almost double, as the web traffic post social media launch
-The newer set of keywords used to find the website were the same keywords that we were seeing develop at the blog. This was accomplished with a simple comparison of both sites’ analytics
-There was no other tactical steps take during this period by Bainbridge, besides the social media program, to change organic traffic patterns in any substantial way
We have seen this with almost all the clients that have shared their own website analytics with us to compare with the blog analytics we track and analyze for them. It is pretty amazing. And we have discovered that the blog does not need to be part of the company’s main website structure…we set them up primarily as sub domains. We have even seen in some cases where the blog is not mapped as a subdomain that we can create the same increases in organic web traffic to the company’s main site. It continues to amaze us how powerful this whole thing can be.
I hope this answers some of your questions. If you would like me to get you copies of the fuller case studies, then please send me your email at [email protected] and I will be sure to send it along. Your questions are completely on target and are of the most logical form or curiosity around these substantial ROI claims.
Hi Adam –
Thanks for the reply.
The reason I’m interested in the actual breakdown is because the entire 100k savings is being attributed to social media when, in fact, there’s a blog component generating traffic via search — which are two separate things. I’ll send you an email for the full case study. It will be nice to see the delineation of traffic (and savings) from Search v Facebook v Twitter.
“The reason I’m interested in the actual breakdown is because the entire 100k savings is being attributed to social media when, in fact, there’s a blog component generating traffic via search — which are two separate things.”
Kristof I am probably confused, but are you attempting to say that a blog is NOT social media? If the blog component is generating search traffic which results in the company dropping $100K it had budgeted to getting paid search, then it’s fair to say that the blog was the catalyst for that cost savings, right?
Again, I fear I am missing something.
Let me first say that no matter how or where the increase in traffic came from, a 100k saving is a huge achievement.
In regard to how they’re attributing traffic — no, a blog should not be lumped into “social media”. Granted, if a blog has a sharing mechanism (Tweet This, Facebook “like” buttons , etc.) and/or comments are enabled, it can have a social component. But it shouldn’t be defined as social media because the traffic it generates comes from different sources.
The CommunitySherpa marketing program consists of three elements; Blog content, Facebook and Twitter. So traffic will stem from two core sources; search traffic and social (shared) traffic.
Search traffic is generated from search engines indexing the content (including comments), listing the site/pages in the SERPs, and people clicking through. This is the basics of SEO — creating content built around designated search terms to achieve higher rankings. And a website can achieve increased traffic without the use of social sharing. You just need some quality content and basic SEO knowledge. And sometimes you don’t even need the SEO.
Social traffic is generated from people sharing content — whether it’s from links shared via Twitter or Facebook, bookmarking on Delicious, Favoriting via StumbleUpon, etc.
The problem is that CommunitySherpa measured incoming traffic but, according to their case study, didn’t delineate it by source. All their statistics are about “search traffic”, keywords, links and search engine optimization, but they’re calling it all “social media”. And that’s the disconnect; traffic from Twitter and Facebook is not search traffic. So a claim that social media alone saved their client 100k is very misleading.
Yes, they got their client results: increased traffic which will save a huge sum of money. But, IMO, for the case study to have any weight at all in the social space, it needs to segment the statistics to show traffic based source — specifically social media.
Kristof there’s a comment from Adam that I think ties back to your comment that’s relevant here:
“There was no other tactical steps take during this period by Bainbridge, besides the social media program, to change organic traffic patterns in any substantial way”
So the plan was initiated, and from the results achieved via the plan, the company was able to realize a $100K cost savings.
Again, the company employed three social media tools, to achieve these results. If you want to say that it’s ‘very misleading’ to say that social media caused this, then I don’t know what else to say, other than we see things a bit differently. Which is fine.
Not to belabor the point, but I will anyway 😉
Their SM program includes blogging which can drive traffic by itself. That alone skews the results.
I think it’s also important to note the case study only measured search traffic. If they were to include traffic directly attributed to Twitter and Facebook, I think they’d find the total traffic increase was even greater. So I feel it would benefit their case study by clearly defining results for each type of traffic.
Kristof the blog is a social media tool. It is part of the social media program. Therefore it doesn’t skew the results from that social media program, it helps create the results.
Just the simple fact that a company can market without paid advertising, a marketing firm, graphic design firm or other traditional marketing resources is a huge benefit of social media. My new and small ecommerce site would be absolutely invisible on the web were it not for social media. Instead of paying for monthly ads to run I pay an SEO expert (Matt McGee) to help me target key words in my blog content and I get real ROI. I’m also taking a social media course with Laura Roeder which is building even more skills to engage in the conversation that is social media. Both of these experts are helping me develop my own important skill-set to support my own social media activities instead of just paying for a static ad to sit somewhere. Interestingly, the two traditional and expensive ads I did run on other sites yielded no traffic. (I do get traffic from facebook ads though) Overall, my SEO and social media investment has been money well spent and is minimal compared to a traditional marketing budget. I’m in a very competitive market niche (skin care) and I’m actually making inroads all because of social media.
Cynthia I like that you are spending money to get results, but to also get training so you can be more self-sufficient, moving forward.
And while I am not familiar with Laura, I can say that Matt is an SEO genius and a helluva nice guy, to boot! Money well-spent there.
This study has been a great one to follow and what has been more encouraging is other major significant multifamily brands who are doing the same thing and seeing wonderful results. There were those who jumped in without knowing what they were doing or who had no comprehensive plan and they jumped back out. Its posts like these that make me reflect a little over a year ago when many voices in multifamily were declaring social media a failure. Those voices are gone. Thanks so much for the post Mack
I think the most telling data is not so much the traffic quality but the traffic quality. Traffic quality can make a dramatic impact. I recently spoke with a group who gets 500 registration online per month (forced registration to view real estate properties). They share that their conversion rate were terrible 2% to 4% or so were serious. I asked them to quantify the loss attributed to the 96% to 98% of registration and it was a big number. They would have been better of letting people browse and create good calls to action. Social Media creates a good first traffic filter and it great to see the data that came out of this project.
Mack,
In the study of social media, so much of it is based on conjecture, but rarely does anybody attribute any hard numbers to the equation. Thanks for sharing the article, b/c no matter how much companies want to be involved in social media, they will restrict their spend unless they see some financial benefits. Oftentime those are difficult or impossible to derive, but this is a great example.
Yep, we disagree.
I feel some of this comes down to how we define certain terms. But even so, the proliferation of social and sharing tools is creating a convergence where everything is becoming social and/or sharable — regardless if the original content/site offers those features. And this is quickly causing the definitions themselves to change.
That said, I’ll stick to my point that traffic derived from search engines can be accomplished without the use of social tools. And that’s why I feel that those results shouldn’t credited to social media.
Mack and Kristof,
I really hesitate to weigh in on this definition of terms and social media platform definition. I completely understand where Kristof is coming from and there is a large subset of people using social media tools like blogs, facebook, twitter, stumbleupon, digg, and the list goes on, that focus their thinking about social media in a specific way and subset of all these platforms. NCI uses them all, and while the semantics don’t really keep us up at night, the combination of all the tools we use for our clients create a better outcome than just deploying one or the other.
Kristof, you are right, we based the case study on driving leads to the client based on creating content on a blog and distributing it through FB and Twitter to ramp SEO and visitors. It is all that really matters to our clients….driving business results and web leads. The service is powerful as a result, but if someday you create a groundswell of people that dismiss blogs as social media tools, we can consider renaming the service to whatever the world is more comfortable describing it as at that point. For now, based on the vast majority of people we come into contact with every day in all corners of the social media space, it feels acceptable to include blogs in the scope of social media platform definition. But, again, I get where you are coming from, just do not agree with it nor is it relevant to our clients.
We have to drive measurable results to local businesses. We are really providing a results oriented internet marketing service that simply leverages social media tools. So, we tend to use blogs as the main social media tool in our content marketing service, and use facebook and twitter as distribution channels for the blog content. We know from experience, that using FB and Twitter creates referral traffic that appears to drive page rank and seo for our clients. We see FB and Twitter as newsstands for content distribution as much as we see them as networking platforms. Using this content created on the blog keeps the social networking at a high level and current and fresh with new content all the time. Sharing links from the blog into clients’ FB and Twitter communities for networking purposes accomplishes goals of driving web traffic and community networking all at once. Our success with our clients and ability to keep pricing realistic for small companies is based on producing social content for networking and increased web traffic simultaneously.
In the year and a half of watching “experts” debate the efficacy of social media as a business tool, this is actually the first time I have heard anyone doubt that blogs are not part of the social media landscape. Congrats to Kristof for adding this new layer of complexity to the debate. I don’t agree with Kristof, but that does not really matter because businesses driving results don’t really care about semantic squishiness regarding their social media program definitions so long as it is driving business outcomes for them.
Just sharing another point of view, and happy to let everybody’s definition of what is or isn’t social media rest peacefully if they work for them and produce the outcomes they are looking for.
Thanks Adam.
Social Media is a great way of getting your business known out there! It’s easy, quick and fast.. No cost involved therefore you are making no losses, also I’ve read many comments on here about SEO – I agree with those who say this also aids to save you alot of money.
Mack I would like to thank you for your great work! And also appreciate everyones comments on this post. It truly has inspired me… Look forward to your latest post.
Great point and case study RE: looking at ROI from a proper perspective, Mark. I believe lowering business costs is a very tangible, quickly-realized benefit, in addition to other positive results with longterm effects on the bottomline.
Mack,
Using Inbound Marketing has kept my marketing budget within budget and then some. No more nasty arguments with the CFO!
Hi Mack,
Indeed, The most important sentence you said is in your response to Gabrielle : “you can’t measure a return until you first START measuring” .
From experience, I can see that setting a baseline is one “problem” area in achieving real opportunities in social media,
Well done!
great information. thanks for it. keep doing good job!!