social media researchAre you being asked to prove the value of social media for your business?

Do you struggle to accurately measure the return on investment (ROI) of your social media marketing?

You’re not alone. Several new research studies reveal that marketing managers are under increased pressure to show measurable results from their social media efforts.

But these same managers indicate that measuring the returns is one of their top two challenges for 2012.

See how your experience compares to others in the industry.

#1: The Benefits Derived from Social Media are Increasing

In a survey of 700 marketers from all over the globe, Wildfire App discovered that nearly all marketers find value from social media and that 75% of marketers plan to increase their media spending in 2012.

The top two benefits highlighted by these marketers are increased brand awareness and the ability to engage in dialogue directly with their customers. This compares similarly to the 2011 Social Media Marketing Industry Report where we found 88% of marketers also indicated increased exposure to be the number-one benefit of social media marketing.

increased sales reduced spending

Wildfire App also found that social media brought increased sales and reduced spending.

Small businesses have reached a tipping point in social media use where only 10% of small businesses surveyed in the Ad-ology 2012 Marketing Forecast said they would not use social media marketing in 2012. That’s down from 24% in 2011 and 39% in 2010.

Key Questions: 

  • As you look at these results, where has your business benefited the most from social media?
  • How do you know that’s true?

#2: More Businesses are Investing in Social Media

Borrell Associates found that small- and medium-sized businesses (SMB) will double their social media advertising budget in 2012. That’s up to an estimated $2 billion in the U.S. alone.

social media marketing ranks third

Borrell found that social media marketing ranks third in online advertising spending.

Awareness Networks found in their State of Social Media Marketing study that 70% of businesses plan to expand their social media presence, while half of marketers intend to improve their social media management practices and tools.

awareness content marketing important

Content marketing is also important to marketers.

Although businesses are increasing their investment in social media, they are more reluctant to put large advertising budgets toward it. Awareness found that 75% of businesses spend $10,000 or less, with most businesses solely investing people’s time toward the effort.

awareness of social media marketing spending

Here's how much businesses are spending on social marketing.

Even with people being the primary resource dedicated to social media, most businesses are only employing a small staff for their social efforts, with nearly three-fourths of businesses using 3 or fewer employees.

awareness of social media marketing employees

Number of dedicated social marketing employees within companies.

With limited budgets and staffs, it’s no wonder that marketers found resources to be their number-one challenge to their social media efforts.

top challenges faced by marketers

Top challenges faced by social media marketers (reported by all levels within the company).

Key Questions:

  • Have you moved past the experimentation stage with social media marketing?
  • What value are you seeing from advertising?

#3: Measuring ROI is One of the Top Challenges Faced by Marketers

Awareness found that marketers from companies of all sizes, experience levels and positions shared the same struggle in accurately measuring the ROI for social media marketing. As a result, nearly half of the surveyed marketers are not purposefully measuring their social efforts.

companies measuring social media roi

By the end of 2012, Awareness expects four out of five companies will be actively measuring their ROI for social media marketing.

This compares similarly to research conducted by Altimeter Group of big brands using social media. They found that a vast majority of brands don’t have a thoughtful social media measurement system in place.

who is measuring social media value

Few companies have a consistent measurement framework in place—including over half of enterprises with an "advanced" social media capability.

So What are Companies Measuring? What is Working?

Awareness found most businesses know how to track their social presence and traffic, but the confidence declines when measuring lead generations and sales.

top social marketing roi metrics

What metrics do you use for your business?

Key Resources:Do you have a thoughtful measurement system in place for your business? If not, here are some suggested resources for developing a measurement framework for your social efforts:

#4: Marketing Agencies View the Value of Social Media Marketing Differently

As an interesting contrast to a company’s perception of social media’s value, Marketing Sherpa surveyed marketing agencies to understand how they calculate the value of social media for their clients.

The survey found that social media clearly helps search results for many businesses, but the largest majority of companies benefit from posting content on their company blog. This is especially helpful when integrated with social sharing buttons.

This survey perhaps clarifies why many businesses are reluctant to invest their advertising dollars on social sites. Marketing agencies see the least value derived from advertisements.

marketing sherpa advertising least effective

Advertising is the least effective social strategy, according to marketing agencies.

Key Questions:

  • Have you incorporated social sharing buttons throughout your website?
  • What is your content sharing plan for 2012?
  • Have you given social advertising long enough to truly test it?
  • How does your experience with advertising compare to these marketing agencies?

#5: An Integrated Social Media Plan Leads to Greater Financial Results

Insites Consulting conducted some new research with over 400 senior-level marketing managers in the U.S. and U.K. They learned some fascinating things about social media adoption rates, but here we focus on their integration findings.

Significantly less than half of the enterprises surveyed have fully integrated social media into their business processes (or are even in process of doing so), 43% of U.S. firms and 34% of U.K. firms responded.

A full 57% of U.K. businesses are just getting started or are evaluating the effectiveness of social media strategies, compared to 43% of U.S. firms.

emarketer survey business using social media

Most surveyed businesses have started using social media.

Smaller enterprises have achieved lower levels of integration. (NOTE: this study was conducted with brands large enough to employ the services of a marketing agency like Insites Consulting.)

little difference between b2b and b2c

Notice there is little difference between B2B and B2C.

The key observation made by Insites is that firms that have integrated social media into their regular business operations are seeing significantly greater financial results than those that have not.

Key Takeaway:If you’ve determined how your business can best benefit from social media marketing, integrate it fully into your business operations. It may be time to stop dabbling and see social as a serious business strategy.

Now It’s Your Turn

How does your experience compare to these studies? Leave your questions and comments in the box below.

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  • PhilMershon

    This was some interesting research. What do you all think?

  • Jmeist

    That was an unreal post. My question is, what lack of resources do you think these managers are talking about when they say that is is their biggest challenge? Are we talking funds? Or availability of programmers? Bloggers? Graphic designers?

  • PhilMershon

    Thanks for your comment. I think by resources they mean time and people. By people it could include people with the skills you mention like programming, writing, design. However, we have seen through our industry reports that most businesses keep those skills in-house, which is the beauty of social media–most of these skills can be acquired and learned. 

    That all said, I know many business do seek to outsource some of these skills. There is room for contract work, if that’s the gist of your question.

  • You folks have a great site.   Also, very helpful content like this one.  Good to see that social media is being seen as more valuable.  


  • This is all amazing stuff… But what I take away is a greater need to CREATIVITY and DIVERSIFICATION… Once everyone is doing it, you are no longer unique.

    Great info though… 

  • Great information

  • Melinda Schmiedeknecht

    My challenge is calculating influence. We are a word of mouth marketing company, so most of our new members come from personal invitations. But how many people are invited to a meeting, check out our facebook page and that influences their decision to attend? Or they visit, are engaged in online conversations afterward and that influences them? When asked how they heard about us, they are going to say the name of the person who invited them to a meeting. I’m going to add questions about whether or not they’ve visited our fb page and if they did, did it make a difference.

  • Great research. Shows a mixed bag. This begs the question: Would we expect a significant, measurable ROI for any other marketing activity that doesn’t get financial and very limited human resources and is not integrated into overall business objectives? I highly doubt it. But this seems to be the expectation for social web engagement. It’s time to take a much more integrated and strategic approach here. One great example of this is reported here: – Three Social Media Lessons from Dell: It’s Not All About Sales!

  • Laurie Barker

    Interesting information. I am finding the need for reporting and analysis with respect to response from social media activity increasing all the time. Whilst it is simply enough to collate how many likes, mentions or leads etc were generated for a particular channel or activity, it is becoming more and more common to ask what demographic is responding or not responding. This information is clearly available within channels like Facebook with opengraph etc.

    Does anyone have any experience in analytical systems that provide reporting across social media channels?

    Recently I sat in on a meeting with and they offered an analytical system for measuring performance and reporting on demographic from Facebook. I’m wondering if there are any independent systems that provide this sort of reporting over multiple channels…

  • Brent Applegate

    Great info.  Love the hard data.  I think the most insightful fact is that most companies seem to have metrics down for presence and traffic.  Lead gen is a gap.  Smart marketing agencies should be looking at incorporating marketing automation software, such as HubSpot, into their offerings.

  • PhilMershon

    Ryan, that is the challenge for sure. I think we sometimes forget the “social” aspect of SMM starts with our existing friends, clients and fans. The media aspect seeks to keep them “front of mind” and enable them to spread the word. That takes a lot of creativity, doesn’t it!

    Thanks for the comment.

  • I expected to see more disparity between B2B and B2C as shown in the final chart. I work strictly with B2B clients and lucky to be around some that are SMM savvy. Know several others that haven’t quite seen the light.

  • PhilMershon

    Thanks, Dan. It seems to me that the trick for B2B is knowing where your customers are spending time. They are people and social beings, but they may prefer LinkedIn over Facebook. Your task is helping your clients see the word of mouth potential in social media and how that helps their business–often for a fraction of the cost. Best wishes.

  • Wow…Great is interesting to see the company boom by solving problem of peoples…even-though they didn’t know that it exists…That’s a brilliant business.

  • PhilMershon

    Thanks for the comment. That strategy seems to set companies apart–those who really think about their customer’s pain points and provides free solutions. Builds trust and establishes their expertise.

    Good points.

  • Tony

    This is all really very good stuff. There seems to be a mad rush to adopt as much social media activity as possible but most of that activity lacks purpose and strategy. Companies using Twitter to engage directly with  their customers real time are ahead of the curve, but that does require resource and is that resource also handling phone calls in the ‘normal world’? Another interesting dilemma which will be solved as this matures no doubt.

  • Melissa

    If you do have a budget for online/social media where should you spend it? We do email marketing and some banner ads. What else should we invest in as a nonprofit to better engage our target audience?

  • PhilMershon

    Thanks again for your question.

  • PhilMershon

    Thanks for your question.

    I think it depends on several factors: a) where is your audience; b) what are your goals (membership, donations, volunteerism, awareness, attendance of events, etc…); c) what is your organization’s message and voice.

    Once you know the answer to those questions you can better answer the question about how to spend your limited budget. You need to know where your audience is spending their time online so you can wisely choose the right platform. You also need to determine what kinds of content will move them toward your desired goal, still keeping in mind that social platforms are “social” and not a “sales” page.

    I invite you to bring your question to our Networking Clubs, if you want further input.

  • PhilMershon

    Good points, Tony. I’m starting to see a maturing in the industry where people are understanding the strengths and limitations of social media. That doesn’t stop the mad rush to the latest tool, like is happening with Pinterest right now, but it does mean that you’ll see more measured adaptation and expectations. Social media takes time and commitment, for sure.

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  • Natalie


    I just read about a study that says even sexy brands struggle with low engagement on facebook. Here’s the link:   I’d be interested in your POV.

    For a small business owner with limited time and money, this reinforces the need for strategy first with tactics that really deliver.

  • PhilMershon

    I totally agree with your takeaway, Natalie. Strategy before execution.

    I’d need to study their research a bit more, but I also know that big brands are happier with lower percentage engagement rates (it’s to be expected). 1% of 1 million is still 10,000 people, whereas 1% of 1,000 for a small business is only 10 people. That wouldn’t be worth the effort. 

    I remember seeing a study that said that brands that post daily can achieve up to 20% visibility, if their content is good and sharable. That’s better than most responses to direct mail and even a decent open rate for email.

  • PhilMershon

    Laurie, I’m aware the HootSuite Pro has an option for this. I’m hoping some other readers can share their insights here.

  • Thanks for the excellent and information-rich post, Phil. I think what would make for an ideal follow up is a post on how to make the ROI case for social media. Dr. Natalie Petouhoff , whom I had the pleasure of interviewing, recently came out with a White Paper for Radian6 on how to show ROI with social media objectives I encourage others to check out. She also has a great 3-part YouTube video series, including: How to measure ROI for social media , how social media benefits the entire company , and How to build a business case for social media

    I’m already working on another niche – how to make the business/ROI case for social video! But of course, it’s not just ROI that’s important, as much as showing the connection to real-world business objectives and matching expected results to existing business’ cultural values.

  • PhilMershon

    Thanks JEBworks. I totally agree that our enamourment with social media is coming to an end (and should have long ago). Business objectives should always dictate our marketing efforts. But social does emphasize the importance of cultivating longterm relationships with customers. Bartenders talk to regular customers and get to know them, just like coffee baristas. Social media helps create that warm audience. I’ll look forward to reading your article. Thanks.

  • There are certainly some interesting statistics here, Phil. Thanks for sharing.

  • Great article!  I’ll be using these stats to encourage folk to onboard social media strategies.

  • Great article! I’m going to share with several people. Biggest take away for me was, if you’re not using social media as a business, you should consider it, because either your competitors are using it already or they will be soon.

  • Phil, enjoyed this piece, thank you.

    I think we will see that as measuring ROI becomes easier over time, the budgets that don’t exist now will somehow magically appear 🙂

  • PhilMershon

    I agree, Ted. Companies who have been slow to adapt will invest more as they see worthwhile results. It probably doesn’t help that social media has largely emerged in the midst of the worst global recession to happen in most of our lifetimes. 

  • Really very interesting research, if the conclusions of the research report is implemented in a correct manner and if RoI is measured with proper care, social media can really turn big in terms of revenue and lead generation for the businesses, whether big size or small size. Thanks Phil.

  • PhilMershon

    Thanks, Jonathan. I agree with you point, but would add the caution to engage wisely. Your competition might be using it, but not necessarily well. That’s the art of relational marketing. 🙂

  • PhilMershon

    Thanks, Barry. You should also show them the video we have embedded on the Social Media Success Summit sales page. That compiles some pretty compelling stats as well.

  • PhilMershon

    You’re welcome. I hope you find it inspiring and instructive.

  • PhilMershon

    Good points, Grant. I also encourage you to see the video we’ve embedded on the Social Media Success Summit sales page. Go here and scroll down to “The ROI of Social Media”:

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  • Amazing post. I am really appreciating your way of presentation about social media marketing trends. It is really helpful to many business people like me.

  • There were studies done as far back as 2008 that stated quite clearly that Social Media would be the largest builder of trust by 2020. Naturally things are moving much faster, but companies must realize that news spreads so fast via Social Media and if your customer’s want to find out more about you, they will increasingly turn to social means. 

    That is why so many people have their social media strategies wrong. It’s primary role is always to build indicators of trust. Far to many, especially Online Marketers forget this and focus on increasing sales. Yes, it can increase sales, but only because of an increased level of trust in your company. 

  • This was a great compilation of interesting and relevant researches on the topic of using social media for marketing purposes.Thank you very much for a great article and amazing insights!
    But how about using the social media for marketing yourself as an employer?
    We at Potentialpark Communications have been conduting research on this topic for the last 10 years now and I can tell you, the social media is a very useful tool for forging your employer brand.
    You can find out more on our website
    If you are interested in finding out more about it and perhaps write an article on it, please do not hesitate to contact me. I would be happy to share our insights with you.
    Once again, thank you for the article and I hope we can stay in touch.

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  • First thing that strikes me is the relevant stability of the words marketing research. There are some ups and downs, but the trend is quite stable. Which is a good thing, I guess: we’re almost as much written about as 20 years ago. I’m not sure the growth of analytics can be linked to marketing, it doesn’t say much about its relationship to marketing. What would be interesting is to trend also terms as marketing insight, customer analytics, or web analytics.

  • Robert

    Interesting, but doesn’t give me much to take to a board meeting. All far too spurious, the harder the outcome challenges, the less convincing the results. My financial director would walk all over me if I quoted the 5 trends above. He is interested in conversions, attributions, ROI and hard cash.

  • Hi Phil.

    Excellent and really great explanation of the findings. This a really helpful article that I most definitive will bookmark, and take with me some of the key points here. 

    Just touch in #2 and #3 some of key challenges we often face when meet with the decision makers. Somedays you get the impressions that they want the benefits of Social Media, but are not sold on investing in it yet.

    Now I can see and understand that many companies has been dragged into some hype, and then discovered that Social Media actually required some work. Customer just dont suddenly knock on your door just because you got 1000 “Likes, Friend or Followers”. 

    This also sometimes why it puzzles me a little why ROI is the biggest challenge with Social Media. What did they expect? I thought we had learned from the MLM and Matrix age that there are no overnight quick fix solutions. 

    I can understand that the economy might want us all to push a quick fix solution. So your conclusion is right on point – there is a need for a Integrated Social Media Plan / Strategy. 

    And yes there are some great companies that has understood these principles. So we need to take a look at these companies and find out what we can model. 

    Again thanks for sharing this great article Phil.


    Are Morch
    Hotel Blogger

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  • Here is an interesting view on what we do…the business of Social Media.

  • Spot on Phil, unfortunately in this case you’re right. It’s hard to sell anything right now – products, services, or even ideas – everyone associates things as an unnecessary cost, whether they be right or wrong! It still won’t stop me evangelising the cost effectiveness of social media marketing though!

  • PhilMershon

    Well said, Are!

    Like someone said, it’s easy to be social at surfacey level (e.g. pass out a bunch of business cards, get people’s name on a list, work a room, etc…), but much harder to build a meaningful relationship. I’ve heard it said that in real life most of can’t handle more than 150 meaningful relationships. We might know about 1,000 people, but after that our memories fade. Great politicians can remember 10,000 people, names and faces. But that all takes work. I think that’s why it’s so tempting to use social tools as just another broadcast channel. Those who truly find and connect with their audience will develop long-term loyalty.

    I’m sitting in a local coffee shop right now, even though I’m a Starbucks “fan”. See how much good my “like” did? 🙂

    Thanks for your comments.

  • PhilMershon

    It sounds like you’re part of the crowd who is still trying to measure and show the ROI. This article doesn’t prove the ROI, only that many others are on the same path. I do think it demonstrates a growing awareness for the need to be measured and not succomb to hype.

    Your finance director will likely be more motivated by some of the case studies highlight by Casey Hibbard.

    Best wishes,

  • PhilMershon

    Thanks, Henry. Glad it was helpful.

  • PhilMershon

    You make a good point. There are many facets to analytics and measurement. These studies didn’t specify what kind of analytics people desired (other than ROI, I suppose). Marketing insight is one of those that clearly can be linked to social media.

    thanks for your comment.

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  • Laurie, Social Snap provides a number of cross channel metrics that are designed to give the marketer an overall view of performance (i.e., what is the combined impact of Twitter, FB, YT, etc.?).  Demographics however, are not something we report on.  Also, we just released a 30 page white paper on social media measurement.  You can find it here:

  • Robert

    I don’t agree at all in the travel business, hotel and travel operators were always looking to invest in opportunities to increase conversions, ROI, returns and profit – unfortunately social media didn’t fit many financial directors’ criteria – that’s the hard reality SM has to face up to – no more excuses please. Search volumes and revenues rose, GDS business has increased, OTA’s have improved profits – all thro’ this ‘recession’

    Perhaps you’re referring to another industry vertical, my interest is in hotels and travel. I’ve heard more excuses made for ‘social media’ than any other form of channel management, after all, that’s what it should be. Its like it can’t do wrong.

  • Robert

    Phil – our clients won’t and don’t succumb to hype, they’re all well fatigued already by it. I find it astonishing that suddenly experts are trying to either redefine social media ROI to suit their purpose, or even ignoring it altogether. that’s before we even talk about attribution. Social media has a long long way to go in most financial directors’ and SME directors’ minds, that’s the facts, and experts are being found out, or at least that’s my experience, with over 170 hotel clients. One last month got 1 Facebook referral despite having spent thousands with a so called expert.Wow!

    I’m afraid i’m defenceless in these situations, you have to understand. The incubation/honeymoon period of SM has long gone, we’re not even close with the metrics, no other marketing initiative in my experience has been given the wide berth social media has, the recession is absolutely no excuse.

    Give me something really powerful to tell my client base, that works/. i’m all ears.

  • Social media consultants Find the places on web where your profile can get maximum exposure .Every upcoming online business requires exponential flick of social media .Such consultants are creative analysts(4web) for business grow.

  • SMM is really a backbone of marketing if it is handled properly results will be on the positive side

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  • jmeist

    Thanks for the response, Phil. That is definitely where I was going with it as I am putting together an industry analysis for a business plan assignment in school. 

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  • Robert

    I’ve reads every post and I’m more confused than ever. Can someone explain to me this comment please –  

    big brands are happier with lower percentage engagement rates (it’s to be expected). 1% of 1 million is still 10,000 people, whereas 1% of 1,000 for a small business is only 10 people. That wouldn’t be worth the effort.  

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  • Jfrancis

    I think that it is important for companies using social media to market keep up with these trends, I think if they do its a great way to make sure that you are getting your companies face to the right people!

  • Gareth

    Is having a few blogs outside of your core website beneficial and what type of content would work on these blogs ? my understanding is that the blogs if you have a few hyperlinked words and the content is fresh it would help to rank your core site better if the links point to the core site ?

  • I think that measuring social media roi is tough simply because social media is not just about marketing; it’s about communication and engagement.  Yes, there are plenty of tools out there offering you vanity dashboards that help you measure things.  They’d say in business, measuring what matters is crucial and yet, with social media marketing – not all the things you see matter — you have to read between the lines.

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  • Great Post! Really enjoyed reading the comments and the great info graphic.

    Thanks for a good read. 

  •  Hi Phil,
    Used that video in a presentation to our local Rotary today.  Went over really well.  Thanks.


  • Thanks so much for the great information. I always love to read more about social media and marketing.
    I have my own site. I hope to offer tips as well. Thank you.

  • Really great article i just found on your blog post. it consist of an important thoughts about social media marketing tips and ideas. I’ so glad to see your post because it help me improved my marketing strategy.

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  • Aroramanu03

    how media is responsible and aware global citizens

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  • Absolutely you are correct, It can increase traffic to our site, including incoming link and search engine traffic. Thanks for good sharing.

  • Art Jimenez

    The company I work for has been gradually shifting my workload towards Social Media and I’ve gone full force within the last year with the most popular apps and there has been a significant improvement in our communications with our clients and vendors.

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