Marketing budgets are increasingly being invested in social media over other marketing channels – which is a significant shift. According to a new report, Facebook generated $26bn in advertising revenue in 2016, which is an increase of 57% from 2015. Despite this there is still very little evidence of a superior commercial Return On Investment (ROI), compared with other digital channels such as television.

Identifying revenue that results directly from social media spend is a challenge for many organisations. Interestingly, 50% of marketers in the UK plan to increase their resource and spend in social media marketing over the next 12 months.

However, 67% of marketers admitted that they currently have no way of measuring the value of their social media spend, but are optimistic that this tool will become available within the next two years.

James Hammersley, founder and CEO of Good Growth, said: “We can appreciate that the shift to social media marketing to test its effectiveness in encouraging conversion is necessary for many organisations. However, committing to further investment in social media marketing without definitive proof of ROI or a way to effectively measure it, is a worrying trend.

“We believe that a blend of qualitative and quantitative data created through in-depth customer insight is key. The use of rigorous testing programmes implemented through an organisations online marketing communications to find the most effective messages, is paramount. Understanding customer needs enables organisations to create campaigns that drive top and bottom line growth, creating an impressive commercial return,” concluded Hammersley.

Good Growth also found that only 33% of marketers are tracking sales on social media channels, with 69% of users admitting to having security concerns about imputing their personal information and bank details online.

The only comparative test available in the public arena is by FMCG giant Unilever, which identified that TV advertising is still its most effective marketing spend to date. Good Growth also found that nearly half of all CMO’s asked haven’t been able to show the impact that social media has had on their business objectives to date.

Overall, this demonstrates that traditional advertising channels still have a role to play in the consumer arena and therefore shouldn’t be overlooked. It also shows the limited impact of social media as part of the digital sphere, highlighting the need for organisations to actively look at accuracy of measurement in relation to ROI before committing to a potentially costly increase in spend.


By Jonathan Davies, editor, Digital Marketing Magazine

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