Wherever I go, the question I hear most often is this: “What is the ROI of social media?” Even though most companies we’ve surveyed have a brand monitoring solution in place, few have yet to crack the measurement code. It remains one of the most stubborn challenges for the social business.
In speaking with over 40 industry experts, including brands, agencies and vendors, I learned about their approaches to monitoring and measuring social media. It is a snapshot of a moment in time; one in which the market is fragmented, messy and chaotic.
Common Challenges Measuring Social Media ROI
The most common challenges handling social data include:
Reporting on Data from Disparate Sources
Each social platform is a third-party site and is its own source of data. This means that capturing social data is out of the reach of traditional digital analytics, which focuses on your owned content. Additionally, each platform has its own way of gathering and reporting on analytical data, making it difficult to have a standardized report of your social performance across all platforms.
Understanding Behaviors by Platform
Each social media site has its own behaviors— liking on Facebook, retweeting on Twitter, tagging on Instagram, pinning on Pinterest, etc. When measuring social media analytics, you need to assign value to each of these behaviors, which will be different by platform. Many find it challenging to assign quantitative value to arbitrary social media actions.
Losing Sight of Results
One of the pitfalls that many marketers experience is getting bogged down by activity-based metrics, rather than viewing increases in followers or engagements as step towards achieving a larger goal, typically conversions. For example, instead of calculating an X% increase in followers and leaving it at that, you should determine what Y% increase in conversions you’ve gained from that X% increase of new followers. This way, you measure that “so what?” of your social media activity.
Learn more common challenges in the report, A Framework for Social Media Analytics.
6 Use Cases for Social Media Analytics
To define where social media fits into your larger business strategy, consider the following key use cases:
Social media analytics can be leveraged to collaborate with customers and drive future products and services. Think of it like a digital crowdsourcing method— gather information about what customers want and how you can serve them better.
To measure innovation, look at things like:
- Opportunities terms like “idea’, “I wish”, and “I hate”
- Sharing of ideas by retweets, likes, etc.
- Trends over time
2. Brand Health
Brand health measures people’s attitudes, conversations, and behavior towards your products and services. Measuring brand health through social media can give real-time insights about people’s perception of your brand, as well as add a new layer to metric like NPS.
To measure brand health, look at:
- Conversation and sentiment drivers
- Location, time, and impact of conversations
- Competitive implications
- Issues identification
3. Customer Experience
Improving your relationship with customers and their experience with your brand is absolutely essential and leads to numerous other benefits like better brand health and increased revenue. Ways to improve customer experiences through social media include keeping them informed, engaging with them, and offering exclusive promotions to followers.
To measure customer experience, look at:
- Customer attitudes (common keywords and topics)
- Volume of service issues addressed through social
4. Marketing Optimization
Use social data to improve the effectiveness of marketing programs. Social media performance can demonstrate how similar marketing content and campaigns will perform on other platforms, driving them in a more successful direction.
Additionally, social media can help marketers understand target groups of people— how they speak, what they like, what they respond to— so they can tailor other types of marketing to them better.
To measure marketing optimization, a few key elements include:
- Campaign revenue, conversions, CPL
- Content performance
- Channel performance
- Post timing impact
- Most active engagers
5. Operational Efficiency
Social tends to require initial investment and some ongoing resources, but it can deliver both hard and soft operational benefits long-term. An example is word-of-mouth advertising, or customers using social to extend brand influence across their own networks.
Another is addressing issues via social— like responding to customers’ tweets— instead of relying on more costly forms of customer service like call centers.
To measure operational efficiency, consider:
- Percentage of resolved inquiries by channel
- Most active brand advocates by channel (by likes, shares, retweets, etc.)
- Popular questions asked on social versus through other mediums
6. Revenue Generation
Social can be a good indicator of lead generation and conversion. You want to understand the role social plays in the purchase process and use this knowledge to deliver social content with high ROI potential.
However, experts recommend taking a more holistic approach to social media, rather than just focusing on revenue— think of social as a way to build relationships and influence with customers, which will translate to ROI down the road.
To measure revenue generation, look at:
- Leads and sales by channels
- Revenue by product by channel
- Social revenue vs. direct revenue
- Search rankings and traffic
- Customer lifetime value
- Transaction size and frequency
Listening and analytics tools have begun to converge, while engagement and content management tools (social media management systems) remain largely separate. It’s a symptom of the immaturity of this market that the tools we need to listen and measure are separate from the tools we need to publish and engage, but there you are. Social media analytics is still largely aspirational.
This report is intended to offer a framework and set of use cases that demonstrate how social media is being used in business today. It includes examples, caveats and pragmatic recommendations to help you plan, execute and evaluate your own social measurement program. The focus is on listening, insights, measurement and, most importantly, action.
Be sure to check out the full report here, “A Framework for Social Media Analytics.”
- Here’s Brian Solis’ thoughtful review of the report
- David Wesson of Scoop.it did a brief on the report here.
- My colleague Jeremiah Owyang’s take on the report here at Web Strategist.
- Jesse Booth of National Instruments highlighted Jeremiah’s post on his blog.
- Here’s a summary and link from Tweetreach.
- Marius Alexander is doing a master’s thesis on creating a social media brand scorecard. He asks for input here.
- Justin Wise posted what he learned from the recent webinar I did with Coremetrics.
- Keith Paul, Chief Listener at EMC, posted a summary on his blog, Listen Completely.
- Crowdbooster linked the report on their blog.
- A post from Facebookbiz.de [in German] reminds us of the famous Gary Vaynerchuk question: “What is the ROI of your mother?”