Recent Social Media StudyPosted: October 12, 2010
I recently read a report by Michaela Stelzner on ‘How Marketers Are Using Social Media to Grow Their Businesses’. One of the biggest questions for marketers was how to measure social ROI (or social marketing spend effectiveness). Let’s think about this. What is a social media investment? I would personally split investments into proactive and reactive categories. Proactive initiatives would be monitoring for specific discussions in social networks at large and engaging in conversation. Reactive would be to create a Facebook fan site or Twitter following and pushing your marketing messages out. The invest in monitoring tools and fan site development work can easily be quantified, but how do you quantify the time it takes for your staff to engage audiences in conversations of generate content for fan pages and/or followings?
This problem has been solved by the information security community and by activity monitoring tools. Activity monitoring tools (such as Spector 360) record and time stamp every action taken by the user on a host, such a PC or laptop. These tools can typically distinguish between total time the application or web service was open and true active time. If you know the monthly cost of your resource, your success metric (brand sentiment, sales revenues, customer satisfaction, etc.) and the true active time they use engaging audiences, then you have your social media ROI!
Well the next question comes up when you want to become a bit more advanced. Marketers always talk about conversion. Wikipedia defines conversion as: ‘…when a prospective customer takes the marketer’s intended action.” So how do you link an act of conversion and social media spend? This requires the marketer to be able to link the social investment made and the conversion. This can be done easily by using coupon codes. In a conversation the marketer offers a unique coupon code. If that code is used you know that the investment made led to a positive customer action. In support cases rating mechanisms can also be used to solicit customer satisfaction feedback. Facebook offers the ‘like’ function… if you were happy with the support I provided, please click on the ‘like’ tab. You can also offer a unique link to a feedback page with a few simple questions about the interaction.
What if the conversion goal is foot traffic on a web site? Well you know from web analytics the foot traffic to a site and with an activity monitoring tool you can quantify the investment made in directing traffic proactively to the site. What if the conversion goal is foot traffic, but to a property with a long shelf life (like a blog)? This gets a bit tricky, but if establishing though leadership by blogging is your method and your only method, then it is doable. With blog articles there isn’t always a direct cause and effect from a conversational marketing investment. The ‘effect’ is foot traffic to the blog site, but the ‘cause’ can be illusive. When the article was written, an investment was made. This can be quantified using active time monitoring for the word processing tool used to write the article. The amount of traffic a blog receives can be increased by promotion, which can be in the form of conversational marketing, which again can be quantified. Traffic often isn’t the ultimate effect that you are looking for. How to link traffic to a blog with sales generated? If you are blogging about low cost and high volume items you can again offer a promotional code in the blog to link cause and effect. If you are selling high cost and low volume products and/or services, then coupons do not fit the model. We need to get our statistical tools out and start doing some regression analysis. The initial time investment was in writing the article. Add on conversational marketing to promote the article within social networks. Track web traffic for the blog site. Now create a table of time investments, traffic and revenues by month or day ( the point is that you need a large number of data entries to have a big enough population to analyze). With blogs the cause and effect may have a significant time lag, but there can still be a significant correlation between cause and effect; or in this case cause > effect/cause > effect. If a significant correlation cannot be found, then it can be concluded that your blogging efforts are not establishing you as thought leader and/or your thought leader status is not impacting your sales due to a number of other factors. Other factors might be within your sales process, pricing and/or product.