Social media marketing accounts for a respectable slice of total business spending. Our survey of 500 B2B CMOs and marketing managers found that businesses allocate on average 36% of their revenue toward marketing activities. Of that, 39% is allocated specifically to social media marketing activity.
We also found that on top of the resource needed to set up and manage social media channels, on average, B2B businesses spend £12,862 on LinkedIn advertising per year, £12,524 on Instagram advertising, £12,254 advertising on Facebook, and £10,840 to advertise on Twitter. That’s a serious commitment – so what value are businesses getting in return?
Our data shows that B2B businesses believe social media helps them achieve goals, including:
- Increasing brand engagement (51%)
- Generating brand awareness (46%)
- Driving website traffic (41%)
- Generating leads (38%)
- Increasing share of voice (33%)
- Keeping internal audiences up to date on activity (33%)
- Supporting recruitment (33%)
- Demonstrating company culture (31%)
- Sourcing data (27%)
Some of these are straightforward to quantify, but most aren’t – and that’s the crux of the issue. B2B social media marketing is a time- and cost-effective way to achieve complex goals, but this doesn’t always translate clearly into metrics.
As a result, a quarter (25%) of CMOs and marketing managers think that social media marketing isn’t valuable, and one in five (22%) think that it’s hard to demonstrate return on investment (ROI).
What is ROI?
Return on investment (ROI) is discussed so frequently that it has become a buzzword. Fortunately, it’s kept firmly grounded in reality by its simple definition:
(Value achieved – investment made) / investment made X 100 = social media ROI %
Value achieved: in a traditional last-click attribution sense, to work this out you need to know how much traffic your social campaign has driven, how much of that traffic has converted and how much of the converted traffic has been closed by your sales team.
Investment made: the cost of the investment can include lots of elements that make up a great social media function, including:
- Content creation (videos, gifs, graphics, photography, copywriting etc.)
- Posting and community management (engaging with followers or those who like, share, comment, or based on insights gained through social listening)
- Advertising spend
- Products or tech (like scheduling tools and social listening platforms – more on that in our guide to social media listening)
- Expertise to develop and execute strategy (agency or in-house)
However, how do we calculate value? The value of the investment is simply leads, conversions or sales, right? Wrong.
Sure, these metrics are part of it, but that doesn’t paint an accurate picture of the true value of your social media efforts. Taking that ‘last click’ approach to social media ROI massively undervalues the effect of quality engaging B2B content and fails to account for some of the most pressing B2B social media objectives e.g. increasing brand awareness, capturing share of voice etc.
The whole is definitely greater than the sum of its parts – and therein lies the problem for marketers.
It’s not that social media activity doesn’t offer ROI, it’s that it becomes difficult to really calculate since social media offers lots of different returns for your investment, depending on what you put into it and what you want to achieve. And a lot of it is really, really hard to measure.
If not leads or sales, then what?
Placing value only on leads, conversions and sales from your activity devalues the effort and expertise required to run successful social media channels. Investment in social media will also help you with customer retention, reactivation, upselling and cross selling – all revenue generating activities and all potentially very valuable – but not accounted for in the traditional, narrow definition of value of investment.
Social media also helps generate the brand awareness and word of mouth necessary to achieve sales success, through thought leadership and paid acquisition. It helps in the recruitment and onboarding process with customers and talent and provides an avenue for customer support.
Is it really possible to measure all of that value? We can develop attribution models, sure, but again, that doesn’t really quantify the value of all the things social media does for your business. Sometimes you need to trust your gut, like Rand Fishkin, founder of Moz and cofounder and CEO of SparkToro said.
So how do we know social media is generating ROI?
We start where we always do – at the end. As we’ve talked about before in our B2B social media guides to LinkedIn and Instagram, it’s super important to understand what you want to achieve with social media and set a strategy to get there. Be sure to set SMART objectives – Specific, Measurable, Achievable, Relevant, Timely – so your KPIs mean something.
Get buy in from your stakeholders so you can really show progress. It should be possible to draw a clear line from the objective itself to the business’s success – but that doesn’t always mean the objective needs to be qualified leads or sales.
Create useful, entertaining and eye-catching content that serves various audiences at various stages in the funnel, and you won’t go far wrong. An approach that grows impressions, reach, content views and engagements will always deliver B2B social media ROI, even if you can’t directly attribute it to revenue generation at this moment.
At BrightonSEO in October 2022, Tim Soulo from Ahrefs shared insights from his experience. The Ahrefs YouTube channel had 338k subscribers and some of its videos upwards of one million views.
But, the organisation had no idea how many customers it gained from its YouTube content.
In the usual understanding of value, where value is leads, conversions or sales, Ahrefs didn’t know the value of its investment here.
No doubt Ahrefs has a slick process for creating video content, but it will involve a lot of resource. We’re talking about time and people to develop strategy, content ideation, research, scripting, SEO, filming, editing, reviewing, approvals… the list goes on. You could work out the cost if you really needed to.
So, value of investment? To go down the leads, conversions, sales route, Ahrefs asked sign ups to its platform where they first heard about the platform. An impressive 30,000 users said YouTube. Now, that doesn’t mean YouTube was the channel that made them convert, or even their last touchpoint with the brand before they bought – just the first. How important is it on the way to conversion then?
We don’t know.
What we do know is that the ratio of channel subscribers vs platform sign ups who heard about Ahrefs via YouTube is over 11:1. We also know one video (out of hundreds) has been viewed by 1.3 million users. It’s probably been useful to a significant percentage them. Those users – potential customers – perceive Ahrefs as a dependable adviser, an expert authority. They trust what Ahrefs has to say, but not all will buy from them.
Should we discount their value from a calculation of B2B social media ROI then?
It powers ‘word of mouth’. Social media marketing, using the right channels to disseminate this content and engage with audiences as an authority, also builds trust. And trust is one of the most important elements needed to sell.
So, when it comes to understanding B2B social media ROI, there are many metrics that matter. How many impressions, views, clicks, engagements are you generating? How many of your customers first heard of you via your social channels? How many new recruits heard of you via social, or used it to understand your business and culture? How many customer queries did you solve on these channels? How does that impact the lifetime value of your customers?
Those things still have to do with revenue generation, and businesses would be foolish to discount them. In short, there’s nuance in understanding the true value of social media beyond lead generation and sales.
Work with us
Now that you’ve seen the light, it’s time to get to it – top-notch social content doesn’t generate itself! One way that many businesses make their cost of investment go as far as possible is by bringing in an expert B2B social media agency like us! We have the tools and experience to help you craft a social media strategy that delivers ROI no matter your objective.
Talk to our social media team to learn what we can do for your business or click here to get back to the top of the page.
Written by: Lou Watson-Dowell, PR & digital strategy director at Definition.