Tweak Your Biz » Marketing » Social Media Marketing: Is There ROI?

Social Media Marketing: Is There ROI?



It is official, Social Media Marketing has been proven to deliver an ROI. So says the 2012 LoyaltyOne Social Media Transaction Impact Study. This report provides the missing link, proof that Social Media Marketing campaigns actually affects buying behaviour and increases sales as a result.

The jury has been out on the Return on Investment (ROI) issue for some time. Now thanks to Canada’s Air Miles Reward Program, operated by LoyaltyOne, we have conclusive proof. The methodology of the research is sound and the results compelling.

social media marketing

This study shows:

• When properly designed and executed, social media engagement provides long-lasting returns that are both significant and measurable. (In the case of the study, this engagement was prompted by online events and contests.)

• Social media initiatives create a long-term improvement in customer engagement, markedly improving the value of customers involved in the effort.

• The impact of consumer engagement is evident at all levels of the marketing dialogue with customers – from the initial outbound contact all the way through to customer response.

• The biggest lift created through social media engagement is found in high-potential customers who are not yet fully engaged with the brand.

What is the Canadian Air Miles Reward Program?

This is a hugely popular program in Canada with 70% of all households actively participating. Air Miles allows people to earn reward miles from everyday shopping at more than 220 brand-named partners. Since 1992 over 50 Billion reward miles have being redeemed by Air Miles members. It has over 10 million members and is ranked as one of the first and largest such coalition loyalty programs in the world. So the sample size is without question.

Why is this land mark research?

In 2010 a DMA-Colloquy study, two thirds of marketers answered “don’t know’ when asked to identify the most important measure of Social Media. In 2012 a Deloitte and MIT Sloane Management Review asked 3,748 executives about Social Media metrics. The number one answer was “do not measure”. This lack of measurement is puzzling, without measurement how are you going to know if your campaigns are working or not?

If you Google ROI and Social Media you will find a large amount of studies, reports and surveys all trying to prove the link between Social Media and ROI. This is by far the most comprehensive report proving the link and they used two campaigns to prove the theory.

Campaign One

Showed an impact over the course of the ten weeks surrounding the events – benchmarking participants’ transactions over the entire period against an indexed performance baseline of 100 for non-participants’ transactions. Members, who participated in the events by responding with their thoughts about the AIR MILES brand and what it brought them in terms of benefits, became much better customers.

In the eight weeks after the events, participants increased their transactions with the AIR MILES partner companies by, on average, 15-30% over the performance of the non-participants in the control groups. These aggregated general results were consistent with the specific findings of each of the three individual events – significant lift in post event transactions for participants that persisted for the two months following the event.

One inescapable conclusion from the study is that the greatest mistake in marketing via social media is employing it only as a means of communication—to tell the customer something. Instead, initiatives must offer customers opportunities to participate in ways that reinforce the brand value for themselves. Our findings indicate that successfully prompting dialogue triggers brand engagement, and engagement drives subsequent transactions.

Campaign Two

The smallest improvement in customer participation was among the heaviest users of  AIR MILES. Those people were already spending at a high level to collect the currency, so it’s likely that they were participating as much as they could. Therefore, social media interaction can be a tool for lifting the transaction value of lower-volume consumers with high potential, who have more room to increase their spend. The spending of the low-volume consumers increased between 20% to 35% in the eight weeks proceeding the start of the campaign.

What have we learned from this brilliant report?

Some of the knowledge imparted in this report we have seen before.

  • Peer to Peer marketing works
  • Selling directly via social does not work
  • You have to stimulate the engagement by your community in an engaging way
  • Measure the engagement levels that your campaign evokes

Most importantly we have learned that a solid, well executed, social media strategy will raise the engagement within your online community. In the two cases quoted in this report, this led to increased sales. Can your company get the same ROI? Yes is the answer.

I would like to acknowledge the work of Neil Everett and Jim Sullivan in writing and researching this report. I have quoted from the report liberally in my post.

Did you like this article?  

Tweak Your Biz

  1. Please share it with your network, we’d really appreciate it! 
  2. Would you like to write for Tweak Your Biz? Or sign up for our RSS?
  3. An outstanding title can increase tweets, Facebook Likes, and visitor traffic by 50% or more. Generate great titles for your articles and blog posts with the Tweak Your Biz Title Generator.

Connect with Tweak Your Biz on:                      

Images:  ”Social Media Marketing  / Shutterstock.com



Sponsored Content

The Author:

Co-Founder at the Ahain Group. The first blogger to name the MDEC Model. A social business enthusiast and looking to learn something new every day. Which is not difficult to find online. Keen golfer and Munster Rugby supporter. http://www.ahaingroup.com

Add Your Comment

  • http://tweakyourbiz.com/ Niall Devitt

    Hi John, these are very interesting results indeed and further proof, if needed that social media can and should be measured. While there are many ready to knock social media and many who promote it, the hard facts are ultimately what will decide at the end of the day.

  • http://www.ahaingroup.com/ John twohig

    Yes Niall, great research by the lads at Loyalty One. The campaigns where very effective measurements of engagement post campaign

  • http://about.me/Lindeskog lyceum1776

    One question, asking from a perspective by a “devil’s advocate”: isn’t social media beyond marketing campaigns? Isn’t a never ending activity?! ;)

  • http://www.ahaingroup.com/ John twohig

    Hi Martin, if that never ending activity does not have a clear goal or business result than the answer is no, it shouldn’t be. Yes it is ongoing, community building, never stops but how do you build that community, campaigns. These campaigns need to be measured and their effectiveness judged on results. Your strategy for content marketing should also have a goal or business objective, so it is all interlinked. “A circle of life kind of thing”:)

  • Christina Giliberti

    John, I love these case studies, as they do prove that social – if done well – meets (and exceeds) business objectives. Objectives can change, but ROI needs to always be measured to assess results.

  • http://SMMInsights.com/ Jason HJH

    Extremely interesting article. It’d be awesome to hear more details about the 2 campaigns. Could you share them?

  • http://www.ahaingroup.com/ John twohig

    Hi Jason, if you click on the link at the start of the post, that will bring you to a landing page that allows you to download the full report, this carries all the details of the campaigns, some excellent info-graphics.

  • http://www.ahaingroup.com/ John twohig

    Thanks Tina, the report explains a really great piece of research undertaking by the guys at LoyaltyOne.

  • http://SMMInsights.com/ Jason HJH

    Great, thanks :)

  • John Twohig

    Thank you Liza, it was interesting to research and write.