Influence Marketing Will Be the Tipping Point in Social Media ROI

Influence marketing bookThe issue of marketing accountability and social media return on investment (ROI) continues to make “front page” news at marketing conferences and across  the blogosphere.

ROI is the herpes of social media; just when you thought you got it cured, it boils up to the surface again.

In my last post for Sensei Blogs, I highlighted this ongoing feud between proponents of brand marketing and performance marketing, which seems like a never-ending story.

The debate festers because most marketers claim that you can’t measure the ROI of social media marketing or that ROI should never be the goal in the first place.  Marketing is a business function and as such, must support the business’s goal of generating a profit.

However, marketing efforts developed with a focus on generating profits often fails to consider the customer experience and ends up negatively impacting the generation of revenue and/or profit.   And so you end up back at square one.

There’s growing evidence that executives continue to think of the marketing function as an expense rather than a profit center. When revenue dips and economies suffer – just as the businesses need to drive more lead generation and conversion – marketing budgets get cut. In fact, marketing is often the first budget to get cut in tough economic times.

The only way to reverse this trend is to prove that marketing efforts offer a return on investment.

Influence Marketing Will Be the Tipping Point in Social Media ROI

In our upcoming book, Influence Marketing: How to Create, Manage and Measure Influence Marketing in Social Media Marketing, Danny Brown and I put forth a model that demonstrates how the growing practice of influence marketing can measurably impact purchase decisions instead of simply driving brand awareness.

Based on the interviews we’ve conducted with brand executives, there seems to be a growing sentiment that influence marketing might be the tipping point where marketers and business leaders finally connect the dots between social media engagement and that elusive return on investment.

Instead of identifying influencers with the biggest reach and activity on specific themes, imagine an influence marketing model that identifies how consumers make purchase decisions and then reacts in such a way as to favorably impact those decisions.

Influence decision process

Properly executed, our influence marketing strategy supports both brand marketing and performance marketing by monitoring and measuring both social media engagement and the resulting activity to a single customer profile, which, when mapped to the lifetime value of a customer, highlights the overall impact on the business’s bottom line.

Marketing As A Sales Function

Influence marketing for general branding and product awareness to large masses of people can be helpful as a supporting strategy, but without a sales acquisition and conversion effort, results are hard to measure.

Just as the practice of influence marketing must shift towards measurable lead acquisition, nurturing and conversion, the entire practice of social media marketing must integrate with other business functions such as sales, customer service, and so on.

It’s a basic idea but one that seems to have eluded businesses and marketers that still gravitate towards social media networks, tools and strategies that isolate online engagements from business goals.

Ultimately, the true measurement for marketing is its contribution to the CLV or Customer Lifetime Value. In isolation, marketing departments will struggle to connect the dots from effort expended to bottom line results generated., and will continue to be the first on the chopping block when budgets are cut.

My next post in this series will delve further into CLV and why we must re-connect sales & marketing into a cohesive business function instead of standalone operations.

And if you’re ready to take the jump into the next wave of influence marketing and where it sits in the ROI and CLV funnel, make sure you pre-order the book using the details in the box below this post.

In the meantime, join the discussion: What are your thoughts on influence marketing as a sales tool vs. a marketing tool?

Image Credit: Pixabay, Licensed via Creative Commons

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About Sam Fiorella

Sam Fiorella is a Partner at Sensei Marketing, a consulting and technology firm focused on aiding global companies grow their business value through improved customer experiences. Sam is also the co-author of Influence Marketing: How to Create, Manage and Measure Brand Influencers in Social Media Marketing. He's the founder and moderator of Twitter’s first weekly debate, #bizforum, which debates hot business trends and practices each Wed night at 8 PM Eastern.

37 comments
OpEdMarketing
OpEdMarketing

Having followed Danny for a long time, I'm looking forward to the book.  That being said, I'm also skeptical.  For one, I'll need a very precise definition of what "influence" is in terms of a metric (is it a Klout score? Is it how popular you are? How many followers you have?), as I don't know how it can be measured effectively.  Second, leveraging influencers to help promote a brand/product sounds a lot like affiliate marketing under another name, and this is the perfect example of when it goes wrong via Rainn Wilson (http://abcnews.go.com/blogs/entertainment/2011/10/paid-to-tweet-rainn-wilsons-del-taco-promo-controversy/).  The concern, of course, is Social Media morphing into another platform for advertising, and there's nothing very social about that.  Not trying to stir the pot, but hoping the book will help address some of these concerns, as I expect it will.  Cheers, Robert

Glen Wilson
Glen Wilson

Just found this website, looking forward to getting the book.


seftonmedia
seftonmedia

Marketing has to generate a better bottom line or there is no point doing it. Bringing social, sales team and the influencers together is where businesses need to focus on. I feel the people who say you can't measure ROI on social either needs to learn it or stop kidding on they know how to do it.

pierreloic
pierreloic

Great post, Sam (and great title :)!

I'm glad you're (re)connecting the dots between marketing and sales. Our customers measure the success of their influencer campaigns in leads and revenue rather than likes and followers. Presenting influence marketing as a sales function is a very interesting jedi mindtrick to change expectations and behavior. I'll have to try it...

amanswellbhive
amanswellbhive

@BillCrosby Thank you Bill for the heads up. Trying to explain ROI to potential customers is sometimes a headache.

samfiorella
samfiorella moderator

@ArtsandClouds @amanswellbhive yes, with great responsibility comes great power...or so my Uncle Ben told me once. 

There's great power in the collective voices of our social graph; properly swayed, it can propel business to new heights, mismanaged and it can sink it. The trick is knowing how to sway those voices or, more specifically, how to influence the purchase decisions in your favor. 

Danny Brown
Danny Brown moderator

@OpEdMarketing Hey there mate,

Great questions, and ones that the book definitely adresses (and offers a true business framework for). The simple answer - no, influence is not measured by followers, Klout score, popularity, etc. That's today's model - we're taking it to the next wave of influence, and moving the focus back onto where it should be.

Affiliate marketing and influence marketing are completely different beasts. In fact, a lot of affiliate marketing (when done correctly) is closer to advocacy marketing, since you're signing up to promote products you already use and like, and now are being rewarded for that.

Our methodology drives customer loyalty, understands the purchase life cycle, where customers are in the decision-making process, and how brands can utilize that information to be more effective and successful, not only for themselves but their customers.

in fairness to the last point, social media has always been advertising - except people call it "sharing content". But you use social to connect and learn about customers, learn about competitor flaws, promote products, etc. It's no different from any other medium when used as part of an integrated approach to marketing - it's just bad approaches that make it seem non-social.

Cheers for the thoughts, mate!

samfiorella
samfiorella moderator

@McCollinsMedia I aim to please. ..Thx @DannyBrown

samfiorella
samfiorella moderator

@seftonmedia  At some point, businesses and marketers/sales/PR teams will stop treating social media as as experiment. The buck will stop somewhere. Executives are already squawking about the need for ROI in marketing and soon they'll be demanding it or the plug will be pulled. Thanks for joining the discussion.

Danny Brown
Danny Brown moderator

@pierreloic Hi there mate,

I hear there's a book coming out in about 5 weeks or so that shares how to exert that very Jedi mindtrick... ;-)

Latest blog post: Homepage Top

OpEdMarketing
OpEdMarketing

@Danny Brown The concern is that companies are going to start targeting influencers and rewarding them for promoting their products (thus alleviating neutrality).  Call that influence, referral, or affilate marketing - for me it's just a new twist in online marketing.  But like I said, hope to read more in the book, which I truly am looking forward to.  Cheers, Robert

janlgordon
janlgordon

@CogentCoach Lots of sun and being with friends is wonderful - hope you have a good evg. and that we talk soon!

seftonmedia
seftonmedia

@samfiorella Hey Sam, I don't understand why marketers/sales/PR teams are still trying to experiment. I thought by now they should be taking action towards business goals. Maybe the business goals aren't laid out correctly. I don't know, it just seems to me they all need to wake up and move on from dipping their toe in the water and jumping in at the deep end and moving towards Gold Medal Success at the Olympics. @seftonmedia 

samfiorella
samfiorella moderator

@pierreloic @OpEdMarketing  Pierre-Loic - exactly. I hated myself for using the term "tipping-point" as I knew it would result in another round of buzzword bingo. (today, I'm not sure there is any word that's not a buzzword!) However, it was the appropriate word.

No, influence marketing is not the magic bullet to all things ROI and marketing but it's the first time - when done right -  that I've been able to connect dollars out with ACTUAL dollar in.  


thanks to both of you for joining the conversation.

samfiorella
samfiorella moderator

@OpEdMarketing  if we do our job properly, once you've completed the book, you'll understand that influence marketing  it's not about incentivizing broadcasters but understanding how consumers make decisions (and what impacts those decisions). Moreover, influence marketing will become about managing influence paths that allow  natural conversations and recommendations to hit their mark without the gamification and ego-laced games.

In fact, social scores are one of the obstacles that impact a recommendation from exerting true influence: purchase decisions.

pierreloic
pierreloic

@OpEdMarketing @pierreloic @Danny Brown I guess we all have to give a $1 to M. Gladwell every time we mention "tipping point". It's unfortunate because I agree with Sam that influencer marketing is an actual tipping point in a sense that it's a federating agent for change for marketers in ways that other marketing disciplines haven't been, but clearly not the silver bullet many make it to be.

OpEdMarketing
OpEdMarketing

@pierreloic @OpEdMarketing @Danny Brown I don't necessarily agree to influencers who make money from things they promote don't last.  I'm just weary of new buzzwords and concepts in marketing (as Danny has been), especially when they're being positioned as "the tipping point".  But like I said, I'll find more out after reading the book.

pierreloic
pierreloic

@OpEdMarketing @Danny Brown Just chiming in: what we're observing is that the risk you're talking about is really limited to the noise this type of campaigns creates that results in clouding the influencer marketing space. We're also seeing that it just doesn't work: Influencers willing to participate in affiliate marketing programs don't last as influencers.  Brands are already coming back from this. Next is figuring out how to create real sustainable value through influencer marketing, that will of course start by reading Danny & Sam's book ;)

OpEdMarketing
OpEdMarketing

@Danny Brown Cheers Danny, I'll be reading it and reviewing it on my blog - and maybe we'll get that pint :) 

Danny Brown
Danny Brown moderator

@OpEdMarketing Actually, that's what's happening now, mate. Our model is to take away the influencer from the centre of the marketing circle and place the focus back on who matters the most - the customer. It's to counter the "results" and bastardization of influence that this approach has led to.

We're looking forward to sharing soon. :)

Latest blog post: Empathy is a Social Currency

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  1. [...] The Tipping Point In Social Media ROI (Influence Marketing)There seems to be a growing sentiment that influence marketing might be the tipping point where marketers and business leaders finally connect the dots between social media engagement and that elusive return on investment. Instead of identifying influencers with the biggest reach and activity on specific themes, imagine an influence marketing model that identifies how consumers make purchase decisions and then reacts in such a way as to favorably impact those decisions. Properly executed, an influence marketing strategy supports both brand marketing and performance marketing by monitoring and measuring both social media engagement and the resulting activity to a single customer profile. Read >> [...]

  2. [...] The Tipping Point In Social Media ROI (Influence Marketing)There seems to be a growing sentiment that influence marketing might be the tipping point where marketers and business leaders finally connect the dots between social media engagement and that elusive return on investment. Instead of identifying influencers with the biggest reach and activity on specific themes, imagine an influence marketing model that identifies how consumers make purchase decisions and then reacts in such a way as to favorably impact those decisions. Properly executed, an influence marketing strategy supports both brand marketing and performance marketing by monitoring and measuring both social media engagement and the resulting activity to a single customer profile. Read >> [...]

  3. [...] The Tipping Point In Social Media ROI (Influence Marketing)There seems to be a growing sentiment that influence marketing might be the tipping point where marketers and business leaders finally connect the dots between social media engagement and that elusive return on investment. Instead of identifying influencers with the biggest reach and activity on specific themes, imagine an influence marketing model that identifies how consumers make purchase decisions and then reacts in such a way as to favorably impact those decisions. Properly executed, an influence marketing strategy supports both brand marketing and performance marketing by monitoring and measuring both social media engagement and the resulting activity to a single customer profile. Read >> [...]

  4. [...] The Tipping Point In Social Media ROI (Influence Marketing)There seems to be a growing sentiment that influence marketing might be the tipping point where marketers and business leaders finally connect the dots between social media engagement and that elusive return on investment. Instead of identifying influencers with the biggest reach and activity on specific themes, imagine an influence marketing model that identifies how consumers make purchase decisions and then reacts in such a way as to favorably impact those decisions. Properly executed, an influence marketing strategy supports both brand marketing and performance marketing by monitoring and measuring both social media engagement and the resulting activity to a single customer profile. Read >> [...]

  5. [...] The Tipping Point In Social Media ROI (Influence Marketing)There seems to be a growing sentiment that influence marketing might be the tipping point where marketers and business leaders finally connect the dots between social media engagement and that elusive return on investment. Instead of identifying influencers with the biggest reach and activity on specific themes, imagine an influence marketing model that identifies how consumers make purchase decisions and then reacts in such a way as to favorably impact those decisions. Properly executed, an influence marketing strategy supports both brand marketing and performance marketing by monitoring and measuring both social media engagement and the resulting activity to a single customer profile. Read >> [...]

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    Is Influence Marketing the Tipping Point in Social Media ROI? — Influence Marketing: The Book

  24. […] and then begin working back from there.Once we do that, we can provide true business metrics and ROI for influence marketing campaigns – and these are the signs of successful influence marketing that truly matter to a […]

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