In February, we posted Part One of this series. Part One was meant to be just an introduction to the topic. Part Two is a more in depth look, emphasizing mindset to measure ROI.
One of the thought leading pieces on this topic came from a 2010 article in the MIT Sloan Management Review. Although a number of the examples are rather dated at this point, most of the key themes touched on in the article remain true today, even with the drastic changes in social media in the 2 and a half years since it was released, confirming the classic saying of “the more things change, the more they stay the same”.
The MIT article indicated that traditional based efforts to measure ROI in the social space have been unsatisfying. By following this topic closely, it is easy to understand that perspective. There is a deluge of information out there on the topic. “Social Media ROI” on Google brings up 24 million+ results and “ROI Social Media” brings up 44 million + results. With so much information out there, how can one be absolutely sure that they are gaining a good perspective? Much of it would depend upon the original sourcing of the article. Like in the brand management world, reputation of the brand (in this case, publishing body) is everything. This is why I strongly feel that the MIT Sloan Management Review is a quality source to use as a framework for discussion.
The MIT article authors felt that the ROI model should be changed. They state:
“Effective social media measurement should start by turning the traditional ROI approach on its head. Instead of emphasizing their own marketing investments and calculating the returns in terms of customer response, managers should begin by considering consumer motivations to use social media and then measure the social media investments customers make as they engage with the marketers’ brands.
Handling the measurements this way makes much more sense. It takes into account not only short term goals such as increasing sales in the next month via a social media marketing campaign, or reducing costs next quarter due to more responsive online support forums, but also the long-term returns of significant corporate investment in social media.”
I like this approach because customer perception is a driving force in managing brands effectively. Brands exist due to the positive perception of how a brand solves a problem for a customer.
Almost every source of information on this topic, including the MIT article, encourages brands to define objectives or Key Performance Indicators (KPIs) of social media participation. I agree with that notion. Every brand needs to know where they are going in order to find a way to get there.
Common goals for participation in social media are increasing revenue and reducing costs. These are important, but the MIT article defines sub goals such as brand awareness and brand engagement. Brand awareness is the first step leading to purchase, so the idea of measuring brand awareness is key. Engagement matters as well, because a consumer that feels a connection with a brand on some level moves further along the AIDA model (Attention-Interest-Desire-Action), one of the fundamental components of marketing. Engagement could easily be classified as a sign of Interest, and certain engagement actions could also be classified as fostering Desire.
Brand awareness and brand engagement are accompanied by word of mouth as metrics of measurement in social media. These categorizations cover a wide spectrum of events and brand managers are well served to realize what these metrics are, a key step in taking action to guide their respective brands towards more positive social media outcomes. Although I don’t agree 100% with the way that the authors classify outcomes (there are instances where events are lumped into multiple categories, something that can be perceived as confusing), the framework remains valuable.
Brand awareness metrics will depend upon the type of social media presence that is being measured. With Facebook and Twitter, number of Likes & Follows respectively are the key metrics. With YouTube, number of video views is a key measure of awareness. Unique visitors to a blog helps to measure how well the blog is doing. Positivity and negativity are measured. There is a famous saying that “all publicity is good publicity”. I’m certainly not one to believe that. I believe that negative brand awareness can be detrimental to the fortunes of brands.
On Facebook, brand engagement metrics include number of comments & Likes on Facebook and the People Talking About This (PTAT) function, something not mentioned in the MIT article because it hadn’t been created at the time of publication. PTAT measures a variety of functions. On Twitter, number of @replies is a way to measure engagement. With blogs, number of comments on a blog and time spent on the blog count as engagement measures. The authors considered number of return visits under brand awareness, but I consider it brand engagement as return visits indicate more content consumed over an extended period of time. With a blog, it is usually a good thing if there’s an audience that regularly returns. With YouTube, seeing lots of comments is a key indicator of interest.
Word of mouth metrics involve re-posts on Facebook, retweeting on Twitter, reblogging or sharing blogs in the social media space, sharing of video, etc. The more of this, the better when the context of the sharing, re-posting or retweeting is positive.
It is apparent that these 3 categorizations are dependent upon actions of existing and potential customers. Therefore, it wasn’t unexpected that the authors said:
“effective social media strategies put the brand to work for the customer”
That idea is one of the larger scale evolutions in the promotion aspect of marketing in the last 10-15 years. Prior to Web 1.0 and Web 2.0, this idea existed, but it wasn’t as prominent because consumer interaction with a brand moved at a slower pace than today. Take for instance the story of bourbon brand Maker’s Mark. The brand made a decision to reduce the alcohol content of their signature bourbon offering. The social media outcry was so significant that the plans got shelved in less than a week and the re-formulated Maker’s Mark never made it to stores. In 1985, the New Coke re-formulation made it to market for a few months before negative consumer perceptions led to Coca-Cola reversing course. Now more than ever, the public has greater influence over brand decisions.
Social media is here to stay as a part of the marketing mix. It is a two way, real time avenue of communication between consumers and a brand. The metrics of evaluation discussed are means of social listening. If a brand receives negative feedback in their social media efforts, it is a sign that the brand likely needs to adjust some component of their communication and/or other aspects of the marketing mix. Understanding what the consumer thinks and feels about the brand is an essential step in the mindset of getting to a positive ROI in social media efforts. Without the correct means of measurement, a brand is less likely to know what leads a social media to positive outcomes, most importantly an ROI that delivers measurable impact on the income statement.
Next time, I’ll evaluate some mathematical equations that have been proposed to measure social media ROI. Stay tuned!