Financial models and frameworks

As it can be seen in the table below, according to the interviews of the study, creating models for assessing the financial value of social media marketing is not a current practice in DMOs.

Majority of interviewees (I1, I4, I7 and I8) stated they do not have any kinds of models in use but are interested in creating one in the future. As a matter of fact, only one of the interviewees (I5) stated that they use ROI for calculating the success of their social media marketing. One interviewee (I2) stated that they make calculations before each campaign to set goals to be achieved. Also, two of the interviewees (I3 and I6) stated that creating financial models for calculating the marketing success remains a challenge, since the DMO does not practice sales.

An interviewee (I7) states that the information and help with the models should come from the partner, namely an advertising agency or so. Finally, one interviewee (I8) highlighted that DMO cannot be responsible for the whole sales channel. The thoughts of the interviewees are opened below the table in more detail.

Table 10. Findings relating to the use of financial models in DMOs

I1 I2 I3 I4 I5 I6 I7 I8

Calculations before the campaign x

No models yet x x x x x

Conversion rate x

ROI x

The help of advertising agency with

models x

Creating models is difficult since the

DMO does not practice sales x x

The DMO cannot be responsible for the

whole sales channel x

No models yet

Like it was mentioned above, most DMOs in this study do not currently have any financial models to measure the success of social media marketing. Yet, according to the findings, the DMOs in general were interested in acquiring them in the future. On the contrary, one of the interviewees (I1) stated their critical attitude towards financial models, and whether they are really needed:

”I'm not really sure of anything is like that if it is that the value of an action is defined as something but not based on the actual trade it has, but on a certain value and like that, even if it was 20,000 €, there have been 300 people out there doing that function, so whether that's a sensible measure, that’s just what I was thinking about.” (I1)

Another interviewee (I6) has similar thoughts concerning the issue, pointing out that the financial measures have not been calculated, but it is rather something that has been reflected in the organization:

“Well it is not really that computational, it has been more of what has been reflected, that we have invested this much into this and now these are the results, and then we kind of think about it either during campaigns or after and then, in a way, many times the things is that we do not sell anything. So, Visit xx does not sell anything alone”. (I6)

ROI (return on investment)

When it comes to ROI, only one interviewee mentioned it as part of their calculations.

”And that is how we are, in the same month we have, brand building, and sales support, so there are different goals, you don't calculate the ROI of what the brand value is, that is quite challenging.”(I5) However, during the interview it became apparent that calculating ROI in this context actually refers to calculating it in terms of sales: ”Yeah, because not like you can't really measure it in euros, whether it makes you more well-known in a specific target group or you get reached by so many people.” (I5)

The same interviewee also mentioned the use of conversion rate, referring to online sales, which is also being followed on a regular basis.

Creating models is difficult, since the DMO does not practice sales

Some of the interviewees (I3 and I6) brought out the challenge of calculating sales or marketing success since their main purpose is to brand the destination in social media instead of selling.

An interviewee thinks that “Yeah looks like its kind of hard to measure what value you put to the benefits related to the image”. (I6)

Also, one interviewee (I3) stated same kinds of thoughts regarding the financial value: ”It's more related to our brand ..So maybe it's harder to measure if we, like the retailer, they have an easy way of thinking how much or how many windbreakers sold on this rig. So we, of course, we see it is a lot longer for us, the fact that we can only see that okay, how much attention we are attracted to – earned attention.” (I3)

The DMO cannot be responsible for the whole sales channel

One interviewee (I8) brings out the notion that the DMO is only involved in marketing certain products or services offered in the destination. It is in the hands of the entrepreneur in the destination that marketing of a service leads to a conversion:

“So we don't own the whole chain in the sense that, in a way, if we do social media like marketing a product, we can't take care of it all the way down there, even to the point of booking.” (I8) … So, we can but direct traffic to a certain point, and after what happens, it is not completely under our control.” (I8)

Also, there might be some constraints to a conversion, which would slow down the process of selling or making contributions to selling, which even affect the way the DMO itself does marketing:

“But then if that part of the chain, the chain is still so weak that we don't want to do it, then we kind of have to, there are situations where we have to curb our own marketing work because there is some problem with e-commerce.” (I8) … Or digital access. In a way, we would have the stuff to market something, but it might not be worth doing at the volume it could be.” (I8)

Other findings relating to financial models and frameworks

A few other findings relating to financial models and frameworks were mentioned in interviews by interviewees once each, namely calculations in advance (I2) and the help with models from advertising agencies (I7).

One interviewee stated they have made calculations beforehand for each of their goals in social media marketing campaigns, for example.

“It is based on A/B -testing and it is based on pre-calculations, if we do a limited campaign, in some market area, let’s in Northern Italy, so I first figure out what our goal is, who we need to reach and with what content. And then how much money we need for that. Like what percentage of the target group we need to reach out.” (I2)

The help from advertising agencies

One interviewee (I7) also stated that if they had any financial models, they would most likely get them from advertising agencies, whose role is to produce the analytics concerning the paid media.

“The fact that what the advertising agencies produce - unless you demand from them, so you cannot really trust that there is enough information available. And then we have consultants here to help, so-called and appointed tourism online business consultants, so that they would provide separate figures to the tourism industry…and because in retail they would be metrics, so that is why if have not wanted to find them out myself, because one should sit just loose the focus totally if no help has been available.”

So if specific financial models were utilized, the interviewee would require help from the partner in producing them.