Metrics

Jeremiah Owyang, a leading voice within social media and digital marketing, predicted that 2010 would be the year that social media needs to prove itself. Well, here we are in 2010 and now is the time we start to look at whether or not our investment into social media activities has actually proved fruitful.

Some marketers may claim that measuring the effectiveness of social media marketing is difficult, and in all honesty it is, but it is possible and should be done. Marketers who claim it is impossible are more than likely those who do not look at effectively measuring the impact of any or all marketing activity. Typically those businesses who are already measuring the success of social media are those focused on putting in place metrics for activities such as enewsletters, CRM, collateral, sponsorship, advertising and have a strong understanding of return on investment.

ROI of social media
We can easily measure website visitors driven directly from social media channels such as blogs and YouTube videos by using metrics software such as Google Analytics. The growth over time for number of Twitter followers can be measured by tools such as Twitter Counter and Twitter Anaylser. Facebook Insights and Nielson’s BrandLift provides us with similar data. If the previous tools mentioned are already being employed to measure social media activity, then this is great. If not, you should look to introduce social media measurement to your team’s weekly or monthly processes.
But, the aforementioned are all non-financial impacts on a business. This is why C-level executives find it difficult to truly understand the value of PR, advertising and social media activity.

Oliver Blanchard, a business strategist, has looked in depth at the ROI of social media, supporting the theory that social media needs to be measured in direct relation to the resource allocation. For all the investment into blogs, communities, Facebook and Twitter it makes sound business sense that a company should see the direct impact these activities are having on the P&L. After all, being able to quantify the success of a campaign or activity in relation to beefing up the bottom line ensures that you are re-allocated budgets to carry out the activity in order to sustain and grow market share.

So, how can we show that our social media marketing activity is actually delivering direct value to the bottom line? Well, we start with the above process of measuring the activity using tools and processes but we also compare this activity to other business data.

What we should be looking to do is plot social media activity against sales revenue, transactions, new customers, loyalty data and market research. By comparing and contrasting both sets of data, we will be able to see a correlation between whether or not marketing activity that includes social media has actually helped increased sales before and after social media activity was introduced. If the correlation is positive, and sales activity has increased during the time that social media activity was introduced, then we can ascertain that certain social media activity has had a positive effect.

Tools such as BrandWatch and Radian6 can also be used to visualise the volume of conversation around your product and service and then you can overlay sales data over the same timeline to see whether or not social media conversation for example correlates with an increase in sales.

Deep data diving - This type of activity is incredibly effective as we are able to ‘deep dive’ into the data to understand particular conversations and the sentiment around your business and service at a particular time such as positive and negative sales spikes.

For marketers it is a case of applying a little more depth to your measurement. For example, measuring the conversations you have had on LinkedIn that culminated in forming a relationship with a prospective customer to that prospect actually becoming a customer and what additional value that has added to your bottom line.

Measuring the Twitter conversations that you have entered into that may have resulted in a new client relationship and sale. Measure the investment of time on Twitter to win that client in comparison to time spent at a networking event. Yes the measurement is more complex but it is quantifiable none the less.

Tagged as: brandwatch, jeremiah owyang, Nielsen, oliver blanchard, Radian6

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I am certain that many of you reading this article have or will come up against the following questions with regard to social media campaigns: ‘how can we measure the value?’ or ‘where is the ROI in all of this?’

As a marketer, it is not enough to simply hope for the best with social media; you need to be able to quantify results and campaign activity.

You need to be able to justify to upper management that your marketing budget has been well spent.

With every marketing activity there are certainly ways to extract and measure value from a social media campaign or activity, both qualitative and quantitative.

The return itself comes directly from the objectives you want to address using social media and benchmarking the results against these objectives. The following should act as a guide when approaching any social media activity.

Set your success metrics
The execution of your social media campaign will be different to traditional marketing campaigns in its approach as you take into account transparency and open, honest communications – however, the planning should not differ.

When approaching social media, you first need to clearly define the success metrics you will use for the duration of the campaign before executing the strategy.

These success metrics will help you to understand where the return on investment will come from before investing your marketing budget in nurturing and supporting a new business community, paying for the production and development of online videos, product demonstrations, or even the cost of developing a corporate blog.

Without pre-defining metrics at the planning stage, you cannot feedback and refine strategies that could have an overall impact on the success of activity that will help shape future campaigns.

For example; if you are developing a strategy based on Twitter, your success metrics could be:

Quantitative: increased traffic to your website, number of sales leads, savings on customer relationship management, reduction in call centre costs, recruitment of new staff.

Qualitative: engagement with customers, types of communication, quality of followers, market research and feedback.

Social media platforms such as Twitter, LinkedIn, Facebook, communities, blogs, podcasts and videos have many ways of contributing value.

Setting success metrics in the planning stage will help you identify the value social media can offer your business, at the same time as helping you measure the success and demonstrate the benefits of activity to your organisation.

Monitor, report and feedback
As your social media campaign unfolds, you should dedicate time to testing and tracking success.

By setting new or revised goals on a weekly or monthly basis you can monitor the progress of your campaign and improve and refine your campaign strategy.

Because social media is digital, you can look at cost-effectively incorporating multivariate testing (A/B testing) to see what messages or method of approach is most effective in generating quality connections, engagement, in-bound enquiries and increasing comments to blog posts. You can then filter out messages, posts, and activities that display better results from those that do not deliver good results. Refine and renew the campaign and feedback on the success.

With social media it is all about relationships and conversations. The strongest relationships in any form take time and effort to develop and sustain. When looking at return on investment with social media, think about the amount of effort you have put in and compare this to the value you expect to achieve.

The all-important ROI
When looking at ROI in relation to social media, try not to just look at the number of sales achieved as a result.

Instead, social media should be seen as a long-term investment that supports the sales cycle and customer relationship management – which later results in addition to sales and renewals.

Think of social media as a 360-degree campaign that adds value to your sales and marketing by building long-term relationships amongst communities, within your blog in terms of engagement through comments to posts, as well as organic traffic to your website.

Although these results may not immediately illustrate revenue they can, however, add value to the bottom line over time.

Tagged as: measuring, Metrics, roi, Social Media, social media marketing

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Tagged as: measurement, Metrics, qualitative, quantitative, roi, Social Media

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