Study says investing in social media ads for ROI is all a hoax

Data indicates social media ads lack ROI

It seems like social media is running the internet, so marketing on sites like Facebook, Twitter, and Pinterest seems like a no-brainer, right?

Marketing on social media may seem obvious, but at least one marketing consulting firm, Good Growth Ltd, seriously questions the value of such marketing. Their research team spent 18 months reviewing the data.

According to Good Growth CEO James Hammersly, “despite our continuing search, there is still no empirical link between money spent [on social media marketing] and commercial outcome gained that suggests performance levels to compete with other digital channels.”

Performance is “significantly worse”

Hammersly claims that, amongst Good Growth’s clients, ads on Facebook and Twitter produced “significantly worse” results compared to other channels.

“Indeed, many of our clients found that stopping investment in such traffic improved conversion significantly and improved ROI for acquisition investment as a whole,” he added.

Hammersly calls it all a hoax

The idea that buying ads on social media sites is a good investment is such a hoax, according to Hammersly, that he compares is to the fairy tale of the emperor’s new clothes.

Studies show 43 percent of marketers have not been able to show the impact of their social media marketing. While some claim that there is a “qualitative” impact, such as increased exposure, few have been able to quantify this impact, especially in terms of ROI.

Meanwhile, studies produced by the channels themselves are rarely verified by independent researchers.

A lack of direct evidence linking social media investment to ROI has led Good Growth to conclude that there is little to “justify investment on this basis of an ROI that can compete with AdWords, email, digital display or re-marketing.”

Hammersly thinks social media marketing “wastes scarce resources.”

Is buying ad space on social media sites all it’s cracked up to be? Or is it simply, like the emperor’s new clothes, a “carefully woven story” used by channels and agencies to “justify their valuations?”

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