It has been said that social media came of age in 2010. Not so for social media measurement. But the mainstreaming of social media marketing brings with it a heightened call for accountability.
The need to prove the value of social media initiatives has never been greater. So, perhaps 2011 will be the year that social media measurement matures and comes of age.
Here are five things to learn about social media metrics this year:
1. Measurable objectives
There are many issues and challenges in the field of social media measurement. The easiest one to fix is for everybody to learn how to write measurable objectives. Most objectives today are either not measurable as written or are strategies masquerading as objectives. (For example, any sentence starting with an action buzzword like leverage is a strategy.)
“Increase awareness of product X” is not a measurable objective. In order to be measurable, objectives must contain two essential elements:
- Must indicate change in metric of interest—from X to Y.
- Must indicate a timeframe for the desired change—weeks, months, quarter, year, specific dates tied to a campaign (pre/post).
Therefore, properly stated, measurable objectives should look more like these:
- Increase awareness of product X from 23 percent to 50 percent by yearend 2011.
- Increase RTs per 1,000 followers from 0.5 percent in Q1’11 to 10 percent by the end of Q2’11.
2. Impact versus ROI
ROI is one of the most overused and misused terms in social media measurement. Many people say “ROI” when they really just mean results or impact. ROI is a financial metric—percentage of dollars returned for a given investment/cost. The dollars may be revenue generated, dollars saved or spending avoided. ROI is transactional.
ROI is a form of impact, but not all impact takes the form of ROI. Impact is created when people become aware of us; engage with our content or brand ambassadors; are influenced by engagement with content or other people; or take action such as recommending to a friend, writing a review or buying a product. Impact ultimately creates value for an organization, but the value creation occurs over time, not at a point in time. Value creation is process-oriented. It has both tangible and intangible elements.
Your investments in social media or public relations remain an investment, creating additional value if done correctly, until which time they can be linked to a business outcome transaction that results in ROI.
Most social media initiatives today do not (or should not) have ROI as a primary objective. Most social programs are designed to create impact, not ROI, in the short-term. There is also the notion that many social media initiatives are in an investment phase, not a return phase of maturity.
3. Hypothetical ROI models
One important step in determining how a social media initiative creates ROI for an organization is to create a hypothetical model that articulates the steps in the process, as well as the data needed and the assumptions used. The model is most useful in the planning stages of a program. It helps address the question, “If I approve this budget, what is a reasonable expectation for the results we will achieve?” Let’s take a look at a simple Twitter example:
Program: Five promoted tweets are sent with a special offer to purchase a product on an e-commerce site.
Hypothetical ROI model:
- (Data) Total potential unduplicated reach of the five tweets is 1,000,000 people.
- (Assume) 10 percent of the potential audience will actually see the tweet = 100,000 people.
- (Assume) 20 percent of the individuals who see the tweet find it relevant to them = 20,000 people.
- (Assume) 10 percent of those finding it relevant will visit the site = 2,000 people.
- (Assume) 10 percent of those visiting the site will convert and buy the product = 200 people.
- (Data) Incremental profit margin on each sale is $50.
- (Data) Total cost of the social media initiative is $2,400.
ROI calculation: (200 x $50) = $10,000 – $2,400 = $7,600/$2,400 = 3.17 x 100 = 317 percent ROI
This model suggests this program would be successful and would generate substantial ROI. If, in reviewing a model with someone who needs to approve a program, he or she conceptually buys in to the model but challenges the assumptions, that is a positive step. Negotiate different assumptions and rerun the numbers. Hypothetical models help you think through the data requirements your research approach must address in order to actually measure the ROI of the program after implementation.
4. Integrated digital measurement
The definition of public relations is fluid and rapidly evolving to encompass a much broader and more integrated view of communications and how we connect, engage and build relationships with consumers and other stakeholders. Digitization in all its forms has driven and accelerated this important change. Communicators should now take a more content and consumer-centric view of the world, orchestrating all the consumer touch points available in our increasingly digital world.
At Fleishman Hillard, for instance, we capture this expanded scope and integration in a model we refer to as PESO—Paid/Earned/Shared/Owned. Here is how we define the elements of our model:
Paid—refers to all forms of paid content that exists on third-party channels or venues. This includes banner or display advertisements, pay-per-click programs, sponsorships and advertorials.
Earned—includes traditional media outreach as well as blogger relations/outreach where we attempt to influence and encourage third-party content providers to write about our clients and their products and services.
Shared—refers to social networks and technologies controlled by consumers along with online and offline WOM.
Owned—includes all websites and Web properties controlled by a company or brand including company or product websites, micro-sites, blogs, Facebook pages and Twitter channels.
The Holy Grail of social media measurement is to track behavior of individuals across platforms, online and offline, tethered and mobile, understanding how online behavior impacts offline behavior and vice versa. We also seek to understand how the PESO elements work synergistically. For example, how exposure to online advertising affects conversions within social channels. To address this, your measurement strategy should be to take a holistic, integrated approach using a variety of methodologies, tools and data.
If you are not already familiar with value attribution models, prepare to hear much more about them in 2011. Value attribution models attempt to assign a financial value to specific campaigns and/or channels (e.g. advertising, search, direct, social) that are part of a larger marketing effort. So rather than giving all the conversion credit to the last click in a chain or even the first click, the model attributes portions of the overall value across the relevant campaigns and/or channels.
A simple model might look at the following metrics for each channel:
- Frequency—the number of exposures to a specific marketing channel or campaign.
- Duration— time on site for exposures referring to the conversion site.
- Recency—credit for exposures ranging from first click to last click, with last click typically receiving more credit.
Value attribution models require human analysis and expertise. This factor is often cited in studies as the reason more companies do not pursue attribution modeling.
This post has been modified from its original version for Ragan.com.
Don Bartholomew (@Donbart) is vice president of digital research for Fleishman-Hillard in St. Louis. He blogs at MetricsMan.