Commune Media | Measurably Effective Digital Marketing™

Social media: An effective lead generator?

Posted on Monday, March 1st, 2010 at 10:12 AM by Sara Chappel  |  Comments (0)

OK, so we’re not huge fans of using social media to drive business. You’ve heard us rant about it before: little trackability, little ability to encourage prospects to take action—with the accompanying problem that people end up spending a whole pile of money without knowing whether it’s been effective. You get the picture.

But it’s really only a matter of time before marketers begin to figure out the social media conundrum and actually make it pay off. And we might have those first glimmerings in the “State of Inbound Marketing report” released this week by HubSpot and reported by eMarketer.com.

HubSpot’s study indicates that lead generation spending is 60% less among companies that dedicate at least one-half of their budget to inbound marketing tactics like search, blogs and social media.

Now, this doesn’t surprise us—at least, not the part about search. We’ve had a lot of success using cost-effective AdWords campaigns leading dedicated landing pages to generate leads for clients. Pay-per-click ads and SEO strategies fell below or near the average cost-per-lead 65% or 83% of the time, respectively.

But we were a little surprised to find that 63% of companies rated lead generation through social media as below average in cost-per-lead. And being skeptical journalist types, we wondered about the quality of the leads (leads mean nothing unless they turn into customers, after all)—until we looked at the chart that showed that, for business-to-consumer businesses, seven out of 10 companies had found customers through Facebook. (For business-to-business companies, LinkedIn was the most effective social media customer acquisition tool.)

So, apparently, there’s hope for social media as a marketing tool. But the lessons we’ve learned along the way—that campaigns that can’t be measured against concrete business objectives aren’t worth the investment—still hold true. If you aren’t realizing a positive ROI from your online marketing—or if you aren’t tracking your ROI in the first place—you’re wasting money, regardless of whether you’re investing in PPC ads or Facebook fan pages.

Tags: lead generation, pay-per-click marketing, research, return on investment, search engine marketing, social media