I recently received the 2008 Social Marketing ROI Report and Benchmarking Guide from Powered – an Austin-based company that creates social marketing programs that helps companies create communities around their brand and “insert the brand into the social fabric of the internet”.
Not only did the companies in the Powered survey report an average of $60 in returns for every dollar spent, but they also reported strong correlations in purchase intent, brand affinity and brand loyalty as follows:
- Purchase Intent: Two-thirds of the respondents stated they were more likely to purchase to sponsoring brands products and/or services as a direct result of the learning experience offered in the community
- Brand Affinity: Two-thirds of respondents indicated an improved brand perception of the sponsoring brand
- Brand Loyalty: 63% of respondents stated that they had a more positive opinion of the sponsoring brand
The survey included results from over 112,000 people – or about 11% of the total 1 million people represented in the population of the 22 communities surveyed. Social marketing programs achieved nearly 5x the ROI of direct marketing programs and 30x the ROI of traditional media advertising programs.
The whitepaper goes on to suggest that Powered’s results are “virtually always above the industry norms” and advises marketers to study their target customers “to learn what kinds of social marketing and web experiences they would likely value the most, and to test those experiences”. In any case, these figures are quite compelling and point out that a managed community can drive drastic changes in brand performance.
In the implications and concluding thoughts, I found this excerpt to be particularly telling:
Social marketing as a relatively new non-traditional form of persuasive marketing communications is widely misunderstood. Most advertising and marketing executives assume that the term relates mainly to content generated by consumers. Beyond social marketing, marketers ought to carefully investigate and test every practical means of befriending consumers by new and established forms of marketing communications which do not involve straight advertising. This includes True Sponsorship in all its forms i.e. entertainment programs as well as educational ones, in all media; cause marketing; service advertising (e.g. helping the consumer to know which products to buy and how to use them); sponsored games; sponsored processes supporting consumer generated media; and new forms which no one has thought of yet.
So why doesn’t your company and brand have a managed community?
You can download the report for free from the Powered website after filling out a registration form. All serious social marketers can learn from this outstanding report. You can also check out the slides from the webinar (“This ROI is Too Good to be True”) they held to release the report at this link.