Posted 06.26.2024 by Josh Krakauer

What Value Does Social Media Bring to a Business?

A full answer to one of the most important questions asked by brands that invest in social media marketing.

One of the top priorities for brand leaders is understanding how their social media marketing investments translate into value, and rightly so – who doesn’t want to know what they’re getting in exchange for their money?

The topic of social media value surfaces more often when discussing the murkier side of organic social and brand awareness campaigns (e.g. growing audiences, building reputation, increasing customer advocacy), and in our experience, it’s almost always related to how this value is measured.

There’s a reason for this, and it lies within the available data and methods we can use to measure the value of social media marketing.

While it’s fairly easy to measure the impact of paid social media campaigns (in the short term, at least), it’s a different story for organic ones.

In other words, social platforms provide more tools and data for calculating the ROI (and thus, nominal value) of paid campaigns, but don’t offer the same for organic ones.

For instance, shifts in brand awareness can be measured with third-party unaided recall studies, or by tracking Net Promoter Score (NPS), but these don’t provide the same level of clarity that you get with, say, a conversion rate, or the number of attributable qualified leads in your CRM.

So, to understand social media value, we need to review the options for executing a social media marketing budget in the first place.

Short-term value and long-term value approaches

For the sake of simplicity, we’ll equate “short-term value” to paid efforts (e.g. ad campaigns and influencer collaborations), and “long-term value” to brand-building ones (e.g. hiring a team to create and post content on your social channels).

Each of these are measured differently.

As we mentioned above, it’s easier to understand the value of paid campaigns thanks to conversion data and metrics like ROI.

On the other hand, understanding the value of brand-building campaigns is a whole different ball game.

Does this mean that it’s less valuable? Of course not.

In fact, brand-building efforts that succeed result in benefits that paid campaigns hardly ever deliver, such as:

  • Top-of-mind awareness.
  • A high level of customer trust and loyalty.
  • Brand equity.

For example, let’s look at a brand that dedicates most of its marketing efforts to brand awareness campaigns.

The result, as we all know, is a high level of brand awareness – and this is what makes Coca-Cola the go-to soft drink for billions of people worldwide (and the 6th best global brand, according to Interbrand).

And what works for Coca-Cola in terms of high brand awareness levels can also work for a B2B SaaS company.

We realize this sounds tempting, but brands still have to make a strategic choice:

  • Focus on short-term value generation (i.e. social media paid campaigns), which is easy to measure.
  • Focus on long-term value generation (i.e. building brand on social channels), which is hard to measure.

This doesn’t mean just doing paid campaigns or building brand awareness, but prioritizing one over the other in terms of strategy and budget.

What’s the best approach?

If ease of measuring results is what you’re after, paid campaigns will always be the best approach, but then again, basing the decision on that factor alone would not be exactly strategic.

Some companies try to do both at the same level – and like anyone trying to focus on everything at the same time, they tend to be the ones that struggle the most with social media.

So, what’s the best approach to generating value through social media?

Paid campaigns or brand-building?

The answer is simple: It depends.

For example, if a brand already tops the minds of customers, investing in paid campaigns that boost sales makes a lot of sense.

Let’s think of another scenario: A brand that hasn’t reached the desired levels of awareness, but is pressured by shareholders and investors to make money fast. In such cases, paid campaigns that offer quick monetary returns (i.e. sales) also make sense.

On the other hand, if the goal is to forge a reputation so that future customers are willing to pay more for a brand they know and trust, then the answer is brand-building.

In summary, the best approach is to match what a brand needs with the right social media strategy, whether prioritizing organic or paid.

If you ask us what’s best as of June/July 2024, we’d be tempted to say long-term brand-building.

Most B2B buyers aren’t very active in the market right now, and in this scenario, building familiarity to be top of mind when buyers return is key.

So, what value does social media provide?

When you’re building brand awareness and striving for a reputable brand, social media platforms are fundamental to becoming a “love brand”, earning media mentions organically, and driving sales through perceived value, among other things.

You’ll probably say that this doesn’t solve the initial measurement limitations, and you’d be right. It’s a systemic problem that (we hope) will be solved by social media platforms down the road.

In the meantime, you can rely on the available methods to measure brand awareness, which include:

  • Tracking audience growth through metrics like followers, engagement, and impressions.
  • Analyzing web traffic coming from social media.
  • Assigning a value to conversions that were preceded by a social media touchpoint (so you can link conversions to social media exposure).
  • Launching brand recall and brand recognition studies (surveys) to see how people remember and perceive your brand.
  • Tracking earned media mentions (i.e. mentions of your brand by third-party publications).
  • Calculating your brand’s share of voice (that is your brand’s presence in social media compared to competitors).

On the other hand, if you’re keen on aiming your guns at paid campaigns, track social media ROI consistently through simple, but carefully elaborated attribution models.

To conclude, if you’re interested in social media metrics, make sure to read our guide to setting and measuring social media KPIs, as properly structured data makes it easier to answer the question of value in social media.

Josh Krakauer

Josh Krakauer is the CEO of Sculpt, that B2B social media agency you just discovered. Josh has launched social media campaigns for best-selling books, publicly-traded corporations, and early-stage startups. Josh works from Washington, DC, but still thinks Iowa City is the best city on earth.

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