Why are you spending so much on social media when engagement is so low?

According to Statista, 2021 will see social network spending in the U.S. rise to nearly $50 billion. Research conducted by The Content Factory indicates that “the average organization spends between $200 and $350 per day on social media marketing. This works out to be between $6,000 $10,500 per month or between $72,000 and $126,000 per year.” Additional data from Deloitte’s CMO Survey reveals that companies allocate, on average, about 13 percent of their marketing budget to social media marketing.

With spending like that, companies must be getting big gains from their investments. Well, guess what? They’re not. Take a look at the charts below:

The average engagement on Facebook is less than 1% across all categories.  That means on average fewer than 1% of people in your Facebook group are stopping, looking and liking your posts. You think it’s better on Instagram? Well it is. Take a look to see how much:

We’ve risen up to 1.22%. That will sure increase annual revenues. If someone told you on any other marketing investment that your audience will only be around 1%, you’d never speak to them again. You may know that old John Wanamaker quote, “Half the money I spend on advertising is wasted; the trouble is, I don’t know which half.” That more than applies to social media.

Let’s ask a couple of other questions about your social media followers to see if the investment is worthwhile. Do the platforms do any of the following:

• Tell you what your followers are interested in?
• Tell you their experience with your brand?
• Provide your follower’s email addresses?
• Enable you to ask your followers questions?
• Enable you to segment followers by different criteria
• Tell you anything about your followers that enables you to direct content to their interests?

Unless you have a crystal ball, the answer is “no” to all of the above. So basically, you’re in the position of guessing what your followers are interested in or using the small number of comments plus your company’s internal biases to steer your marketing direction. That’s a recipe for giving the wrong message to the right audience or right one to the wrong audience. Market research can tell you more but it’s still generic within a segment.

What if you could integrate market research with CRM and email marketing so you could create customer segments by need or interest and send content tailored to each segment’s shared interests? What would you expect to see for engagement?

Let’s look at the last 12 social media posts for two brands of wine that we work with:

Engagement for Brand 1 on FB is slightly higher than the average for beverage alcohol and more than double the national average for IG, so they’re doing well. Engagement for Brand 2 lags national averages on both platforms.

Both brands are focused on the U.S. market but their social media followings are global and they don’t have specific information on where and who they are or what their personal interests are.

Both brands also have been using the Oomiji platform, which appends personal preferences to database files so that content can be sent to segments with common interests. Their results so far, over their last 12 posts:

Admittedly, both these groups are smaller in size than their social media followers but relative to social media engagement, Oomiji engagement is running at astronomical heights. Why is this?

The answer is that no one receives a general email with content spread across a variety of topics. Everyone gets an email with content that is specific to their interests whether it’s the brand’s history, wine story, food pairing suggestions or wine tourism ideas. You might ask why other platforms don’t allow for this kind of content tailoring and targeting. The reason is that the programming to develop these capabilities is complex and most CRM’s and email marketing programs have developed their businesses using the lowest common denominator.

With the end of cookies and third party tracking on the near horizon, we expect that there will be more platforms similar to ours, but for now, there are very few. As reported in a recent Nielsen article, “Now, is an extraordinary time for marketers to rethink their audience engagement strategies…to learn about consumers on an even more detailed level, and therefore deliver more targeted and relevant communications to them.” We couldn’t agree more.