Are businesses failing to find an ROI in social media? Another view.

roi in social media

By Mark Schaefer

There was a lot of buzz on the Internet last week about a report and infographic from stating that 60 percent of small business owners are not realizing a return on their social media marketing efforts.

The results of this survey were reported on

  • NBC News
  • USA Today
  • The Austin Business Journal
  • Small Business Trends

… and dozens, perhaps hundreds, of blogs.

It took a little digging, but here is an example of why we need to take this kind of information with a grain of salt. The Manta research was not a national survey. It was not a representative survey. It is not a statistical extrapolation of the current state of social media.

This was a survey of 1,200 of Manta’s own customers.  And yet it is being reported as a national trend by the mainstream news media?

None of the news channels disclosed that this was a survey of the company’s site members. In fact, most didn’t even link to the survey. They just linked to the original USA Today article.

This survey is a mildly interesting data point, but if I were reporting on this press release from Manta, I would have wanted to know:

  • How was the question asked?
  • What was the response rate?
  • Is that sample size representative and sufficient to forecast a national trend?

I have to give credit to whoever is doing PR for Manta. This is a relatively obscure small business site that is attracting massive press through their surveys and infographics. In a world of paralyzing information density, they figured out a way to cut through the clutter and attain incredible exposure. Here is what I take away from this case study:

  1. Apparently anybody can dupe the national news media by creating provocative survey results and an attractive infographic.
  2. If you can just dupe one national news outlet, you’re likely to dupe them all because nobody digs for the truth or even cares about the truth. They want to break a story fast with diminishing resources devoted to checking facts. So, they just copy the other guy.
  3. Bad news sells better than good news. Ironically, the spin on the original press release from Manta was positive, focusing on the 40 percent of companies who were realizing measurable gains from social media. But the press turned it upside down because negative news attracts more readers than positive news.

So after all this, what is the truth?  Are businesses getting any benefit from social media marketing?

In a survey published just two months prior to the Manta research, The McKinsey Global Institute polled 4,200 executives and found that 72 percent of their businesses used some form of social media marketing and 90 percent of those businesses reported receiving business benefits from those efforts. The report has a detailed appendix explaining the robustness of its methodology that is more than 30 pages long.

Who do you believe?

SXSW 2016 3Mark Schaefer is the chief blogger for this site, executive director of Schaefer Marketing Solutions, and the author of several best-selling digital marketing books. He is an acclaimed keynote speaker, college educator, and business consultant.  The Marketing Companion podcast is among the top business podcasts in the world.  Contact Mark to have him speak to your company event or conference soon.

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  • I think “small business ROI of social media” in any context needs to analyze the expectations of the small business owner in the first place.

    If they’re expecting a miracle, they won’t get it from social media without luck. If they’re expecting a dramatic increase in annual revenues directly tied to social media use… nope.

    However, if their expectations are handled correctly in the first place, there IS a nice upside to using social media tools for certain businesses.

    Content, customer service, technical support, etc… can all be distributed and handled via social media tools… WITH dedicated resources.

    Again, expectations like “I’ll devote one person to this for 43 minutes a week and see how it turns out” can’t be covered in a survey… unless it’s a detailed survey.

    If business owners are failing to find ROI with social media, in most cases they were looking in the wrong place, looking at it the wrong way, or were indulging a curiosity factor. None of those has to do with the social media tool itself.

    It would be like saying “I can’t get ROI from that wrench when I’m hammering those nails in!” 🙂

    Good post Mark.

  • An excellent and thought provoking post, as always, Mark. For my clients, I am definitely seeing an ROI from social media but, as Joseph mentions, seeing it depends heavily on what the expectations were in the first place and the time and energy put into it.
    It has always been true that mainstream media prefer bad news to good but it’s ironic, isn’t it, that they are rushing news stories even faster now (with less verification) because they want them out before they are already viral in social media. Hence, a social media story was universally misreported (from its original point) because of the pressure on mainstream media to compete with the speed of social media. But in social media we also have to take news with a pinch of salt because Joe wants to get his tweet out before Fred to make sure that it is his that goes viral, with scant regard to verifying the authenticity of what he is tweeting. we would like to rely on mainstream media still for accurate reporting of a story we may have seen the essence of on social media but the proportion of news organisations taking that care is much reduced.
    I’m concious that this is a circular point and it’s something you could make an excellent blog post out of all on its own (if you have not already done so) !

  • I believe McKinsey!

  • RhondaHurwitz

    The increase in spending allocated to social media among the savviest marketing CMO’s tells another story.

    ” … Social media spending as a percentage of marketing budgets will more than double over the next five years according to new results from The CMO Survey. Responses from 468 top marketers in February indicate that companies are spending 8.4 percent of their budgets on social media. Over the next year, that number is expected to increase to 11.5 percent, and in the next five years it will reach 21.6 percent”.

    ( )

    Granted, time and budget constraints make execution challenging for a small business, but in my experience, CMO’s don’t wildly throw money at bad strategies, year after year after year:)

  • Gettysburg Gerry

    The first thing that came to mind was the StateFarm commercial with the girl with french model boyfriend who says, ” they can’t put it on the internet if it isn’t true”…

  • I totally agree Matthew. Mainstream media is working overtime to get to stories as quickly as they can in an effort to remain relevant. Fact checking is important, but not as important as being first. Look at some of the botched reporting that came from the Boston bombings — it was crazy!

    I think the ROI for social media depends greatly on what your expectations are. For me, it doesn’t always equate to direct sales. It’s more about using social to build lasting relationships. If you are looking at the bottom line only, there is room for disappointment.

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  • Thanks Terri and, you are absolutely right, the Boston bombings is a superb example of mainstream media competing to ‘beat the tweet’ and checking facts later.

  • So true. And we see it on infographics all the time. A bunch of disparate stats cobbled together and presented as comprehensive, when in fact they are not. I’ve got another one, though not a survey, it’s a stat from a research group.

    Have you seen this one? “By 2017 the CMO will Spend More on IT Than the CIO” There are hundreds, if not thousands of citations on the web to this stat, which all lead back to the title of a webinar, not a report, which of course would be peer reviewed. To the best of my knowledge, there is no such report.

    Yet this title, intended to promote a webinar, has been cited over and over as a fact on mainstream media sources. This is one downside of the web and the reason we should not instinctively believe everything we read on the internet.

  • You are precisely correct. The best survey question would be “do you have any idea what you’re doing?” : )

  • Superb comment Matthew. You have written a great post right there sir. Thanks!

  • Ha! Great analogy!

  • Wow. I have seen that “fact” constantly. Quite a story Frank. Thanks so much for commenting today!

  • Matthew, love the “beat the tweet”… awesome description of today’s mainstream media (in most cases). I don’t give a hoot who gets the story first, I want to pay attention to who gets the story RIGHT. 🙂

  • In “Sleeping Murder” Miss Marple (paraphrased) says to Gwennie, “You believed what you were told. I never believe what people tell me.” I will qualify that to “checking trusted resources” helps. And commonsense checks. Does that sound believable? Do I want to believe this so I don’t have to do it?

    Did you see that article about Amazon at readwrite?( It’s pretty interesting about how taking the long view has served them well. One of the problems with social media is that it gives you the daily opportunity to examine your own navel.

    I love the sense of community I get from SM, but I regularly have to “swim out,” crawl ashore and look around, to make sure I’m heading where I need to go, not just heading where the undertow takes me.)

    Another good one. 🙂

  • Nice share Rhonda!

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  • Mark – Thanks for sharing that. I saw those stories and definitely didn’t realize that Manta only surveyed their own customers. Frustrating.

    I was actually perplexed by the stories and study for a number of reasons. I found it odd that the Manta survey showed that 50 percent of businesses were spending more time on social media this year, yet 60 percent reported not seeing results. Why would so half of respondents spend MORE time on something that was get results? Seemed awfully contradictory. It would have been interesting to better understand this. Were people investing more time BECAUSE they weren’t seeing results? Putting those numbers side-by-side raises more questions to me.

    The other piece that was baffling was the people the USA Today article interviewed. If you look at the social profiles for the businesses mentioned, you’ll see they only posted a few things on social channels and hadn’t been active in months. Of COURSE those people aren’t seeing any results. so, I think the other challenge with this study is – WHY are you not seeing results? Is it because you’re not putting any effort behind it? Or, do you not have a solid strategy? I think there’s a big difference between someone who hasn’t tried and someone who has, but hasn’t gained any traction.

    So many questions with this…the bottom line is that you can’t believe everything you read.

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  • Steve Woodruff

    The authors of the report may as well talk about the ROI of having and using a phone. There is no such thing as measurable ROI of “social media” – you may be able to determine ROI of specific campaigns using social media tools/platforms; but digital engagement, or a high-level SM strategy, is not accurately ROI-able. That discussion should be left at the tactical level IMO. Digital social networking is rapidly becoming a utility.

  • Exactly Tara, I think more and more business are receptive towards thinking about more than just the immediate revenue margins they see in the same month they do social media.

    There are so many more ways to think about social media, like cost savings, brand equity, etc. (

    To sum it up, we’ve to go back to the roots of “social media marketing”. I read an article this morning which I couldn’t put it in a better way: “trust that those who value our content/engagement would be more likely to buy from us when they are good and ready.”

  • Honestly, on the social web, you can’t believe almost anything you read. I have a very few trusted sources I rely on. Everything else you kind of have to block out, even if it gets a lot of buzz. Thanks Laura!

  • It may or may not be ROI-able based on a company’s situation, but it should always be meausurable in a way that links to company objectives. Thanks Steve!

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  • Julie_Schwartz

    Thank you Mark for furthering the quest for truth in research!

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