It’s almost 2013 and a common question these days asked by marketers is can you measure the ROI of your social media marketing? The answer is yes. BUT it depends. The ROI of social media isn’t as plain and simple as say measuring your PR efforts. As Scott Monty at Ford says, “what’s the ROI of putting your pants on in the morning?”
The fact is, you need to be in the social media space. Figuring out how to turn Reach, Friends of Friends, and @mentions into actionable insight is just like any other marketing initiative. Determine what your objectives are, the tactics you’ll take to achieve those objectives, and how you’ll measure success.
WHAT IS THE ROI OF SOCIAL MARKETING
Forrester Research put out a whitepaper called “The ROI of Social Marketing” and in it they attempt to discuss why social media is important, and what is the return on investment (ROI) for your social media efforts. They prescribe an approach that should work for brands, B2B, manufacturers, etc. ROI doesn’t always have to equal dollars and cents. So for marketers looking to measure the ROI of their social media marketing, this should be the Holy Grail.
Forrester explains that understanding the effectiveness of your social programs, in the context of your business objectives, is the key to seeing the benefits of these campaigns. Like I mentioned earlier, it’s all in how you tie the measurement of success to your overall objectives. Forrester then breaks it down quite nicely, they suggest looking at your metrics in four silos: Financial, Digital, Brand, and Risk Management.
WHAT DOES THE ROI OF SOCIAL MEDIA TRULY DELIVER
Before we get into defining those four silos, lets look at what the return on investment for social media really delivers. The results are more substantial than just mere numbers. Investment in social media is increasing, but without standardized measurement practices understanding why social media is important it’s still a challenge. Simply implementing a strategy to increase Facebook likes and Twitter followers, and then applying values from other channels, like Public Relations, to social interactions isn’t providing true ROI. It is not apples to apples. The return on investment for social media truly comes from the interactions and relationships built with your customers. 60% of consumers expect brands to respond to them online, and that probably a driver to why brands are in this space. But sadly enough only 30% of brands actually do respond! So think of that right there. Maybe you want to measure the return on investment for responding back to consumers within social media platforms and the associated reduction in customer service costs?
A BALANCED APPROACH DOES THE BODY GOOD
Financial: have you increased revenue or profit, or decreased costs because of your social media efforts?
Brand: has your brand perception improved among consumers?
Digital: has your company enhanced its owned and earned digital assets within social media?
Risk Management: is your company prepared to document and respond to all inquiries through social media, whether bad or good?
The answer to these should all be yes. And if they are you’re one step closer to proving to your superiors why social media is important, and the return on investment for your social marketing can be measured. Are your social media efforts helping you achieve your objectives? Forrester provides this nifty little figure to help you visualize your own social media marketing measurement.
The financial perspective aims to measure social media’s impact on sales and revenue. Use social media to affect the reach of your email campaigns, coupons, discounts, sales, etc. That way you can tie back directly to the increase in sales.
Determining your brand perception could be done using a focus group. But that’s old school, everyone knows that shit doesn’t work. Poll your audience on Facebook, ask questions on Twitter, and read comments on your blog to determine whether consumers are reacting positively to your messaging. Reward those that consistently interact. Let your customers into your world and provide a better experience through social media. You have a direct line to your customers. Use it. But don’t abuse it.
There are a few approaches to measuring success in owned media (company websites, online communities, blogs) and earned media (mentions of the company, links, user generated content). Measure the impact your digital assets have on SEO. Are your whitepapers creating valuable links to your website? Is your Facebook page driving traffic to your website? Does your blog inspire readers to tweet about your brand? This is especially important for brands that do not sell directly to the consumer and cannot tie in the financial piece as easily.
Lastly, are you responding to consumer inquiries? This creates dialog, and can divert customers from calling your customer service folks. This reduces the need for 24-hour people on site answering phones. I imagine a world where all customers service complaints will start with Twitter, and only escalate to a phone call or email in certain situations. Not to mention conversing with a customer on any social channel increases brand mentions.
AS SOCIAL MEDIA MARKETING MATURES, SO DOES THE ROI OF SOCIAL MEDIA
True social media measurement will no longer be based on the number of likes you have, but rather how and why social media helps you achieve fundamental business objectives. Social media will also shift to a long-term benefit. Don’t buy Facebook ads just to gain 500,000 fans then ignore them; it should be part of a long-term strategy to build a community and brand evangelists. It’s your job to engage with that community. Not all social media activities need to have an ROI associated. Simply listening is a valuable activity but may not provide ROI. However, you’ll learn valuable consumer perception about your brand and move your company further to achieving social media success.
There was an article published on AdAge this morning, July 16, 2012, by Will Margiloff, CEO of IgnitionOne that discusses the need for social media to adapt to the needs of advertising professionals. Ha. Ha. I commented, but decided I had more opinion than could fit in the 500 word limit on AdAge.
A colleague at a digital marketing agency once told me that advertising people have no idea what they’re doing with social media and advertising. And he’s right. Now I always wanted to be an advertising person, but I’m realizing advertising is an old industry filled with dinosaurs and (some) advertising people truly just don’t get it. I use some because there are bright people out there in advertising pushing the boundaries of the Internet and understand the power of social. And my hats off to them.
If you read the article, Margiloff makes the point that social media top dogs are acting foolish by not adapting their advertising options to the typical metrics of today’s digital advertising. Facebook for example, uses terms like Reach, Talking About This, and Virality, as opposed to Impressions, ROI, Click-Through’s, etc.
Now I agree this makes it tough for advertisers to prove their worth to their clients who want an ROI model for social media and advertising that is the similar to their digital advertising or PR models. But I do not agree fully.
He also makes the point that (I’m assuming Facebook) needs to make “better ads”. He says users need rich experiences, full-screen options, rich media “inserts” before you watch content, etc. Again, I do not agree fully.
Margiloff sums up his rationale by stating social media and advertising leaders need to prove its worth through real metrics and better ad options. Finally, they need to grow up.
Now My Opinion..
Yes, social media platforms like Facebook are another channel for digital advertising. But social media was forced to adopt advertising rather than becoming its own medium and changing the game on how results are determined. I salute Zucks for trying to stay true to his vision of Facebook and pushing the boundaries with new metrics and advertising options like sponsored stories. This is the future. It’s clear for mobile as well.
Advertising doesn’t understand that social media platforms are not news sites where you can display annoying banner ads and interrupt readers with video ads. Facebook was created to help people communicate better. Do you think it would be a good user experience if you were commenting on a friend’s photo and after you clicked submit a Purina pet food ad popped up? No it would not. Hence, why traditional advertising options do not work with social media.
Advertisers are constantly thinking “how can we interrupt consumers with our marketing messages.” But the beauty of social media is now it actually gives brands a chance to communicate with their customers one-on-one, learn from them, get their feedback first hand, and most importantly contribute and interact directly.
It’s a world about content, sharing, and making connections online. Brands have the opportunity to join conversations with their customers, their customers’ friends, and their families. They should not take this responsibility lightly, and neither should advertisers. Social media was built for conversations, not to become another channel to blast marketing messages to.
Ad agencies are scrambling to find digital marketers and get into the game, but bringing a baseball glove to hockey tryouts isn’t going to cut it. The focus needs to be on respect for your customers, providing solid information and content that people care about, and overall customer service. Too many brands ignore negative feedback. This is your chance to hear from your customers directly. Worry about the information you receive, rather than the information you push onto your customers. Think differently about how you connect with your target market, and then you’ll understand why social media and advertising are just not one in the same.
I recently signed up for an account with Crowdbooster, a social media monitoring and reporting tool, and immediately I’m impressed. The social media platform was built to optimize, monitor and report on a brand or users social media efforts. There are a lot of platforms out in the market right now but Crowdbooster does a few things right.
So Crowdbooster is different than HootSuite, CoTweet, or Seesmic in the sense that it’s working behind the scenes to understand the data. This alleviates some of the work that’s needed to be done by the social media or community manager. It then has the ability to recommend who you should interact with (based on Klout score), when you should interact, and what to share (by showing you real time analytics on previous posts). It really is pretty slick, a great social media monitoring tool you want to check out.
Features (from the Crowdbooster website)
Crowdbooster will deliver you actionable insights, rather than just present the information and let you decipher. Their analytics and recommendations show you how to reach the most important influencers, how you can create optimized content that will better relate to your audience, and even tell you what the best time of the day is to schedule your posts. For a social media or community manager that wear many hats, this is key in helping you schedule out and plan your day. If you keep a content calendar, this can dramatically improve your results and tie to your calendar and on-going initiatives.
At-a-glance insights about each message
With Crowdbooster, you can analyze the performance of your individual tweets and Facebook posts with a pretty cool looking interactive graph, and/or tables so you can easily and quickly understand what’s working and what isn’t. You can then customize date ranges to view the results of past campaigns. Features allow you to drill down further and see engagement metrics on Facebook and Twitters. This is helpful when you’re really trying to identify what resonates with your community. As you start to learn what content performs best, you can shift strategies to better align with audience needs.
Follower and Fan Growth
On Crowdbooster, you can track the growth of your community easily. You can see long-term benefits and short-term benefits by drilling down into individual posts. You can customize the date range or view a daily snap shot of how your community is doing. Crowdbooster makes it easy to download reports and track your progress. You’ll likely need to supplement your analytics with Facebook Insights, Google Analytics, and other Twitter metrics to get the whole picture on how your marketing efforts are doing. If you’re effective, you’re looking at how online community growth and interaction relates to web traffic to conversions. Or however it relates to your business.
Deep audience insights
In addition to basic social media monitoring, Crowdbooster lets you understand who the fans or influencers are that interact with you most. Then allows you to see who has the higher online influence. These are people you want to interact with, but don’t discredit folks with smaller following as you’ll want to interact with everyone as a general tactic. But it is effective if you can make some solid connections with industry players.
The social media monitoring game is getting flooded with platforms that promise a streamlined approach to social media management. You have to read between the lines and determine how these tools will work for your organization and your overall business objectives. But Crowdbooster has my recommendation.
I just finished reading the Thank You Economy by Gary Vaynerchuk (@garyvee) and not a month later I see it in action. And I see it in full force. And it reminds me of the Milwaukee burger joint AJ Bombers, which was my favorite case study in the book. AJ Bombers is a small burger joint making a huge impact in their community and with their customers; through positive use of social media.
The company I saw following the principles of the Thank You Economy so promptly was a Newport Beach, CA Pilates and Fitness spot called Core Et’ Barre. You can follow them on Twitter at @CoreEtBarre and Facebook at Core Et’ Barre. They do a great job offline, and I suspect their attitude will translate online.
They don’t have a huge following at the moment, but like the Thank You Economy teaches, if you keep grinding and dropping knowledge bombs on your audience; you’ll be on your way to success.
Let’s get into the Thank You Economy details. Core Et’ Barre offers their new customers an opportunity to try their first class free. No gimmicks, no sales trickery, just a good old fashioned free-trial. Now I don’t know a whole lot about Pilates or what Core Et’ Barre is teaching, and I won’t pretend to, but from what I’m told they combine Ballet, Pilates, and Weight Resistance training. Which from what I can tell, it’s a new concept and a new take on fitness. So when entering the market with something new, one free-trial class makes sense and probably won’t have a huge impact on the bottom line.
Now here’s where the Thank You Economy comes into action. What they do right after that free class is tremendous. They send a personal hand written note to every single person that attends their first class. It’s thoughtful and genuine, and it’s from the instructor that taught you that day. This alone sets them apart from the big box gyms of the world. They’re applying the Thank You Economy principles effectively, and getting great results.
I can tell you from experience, and how I learned of this idea, that my fiance and her co-worker attended their first free class last week. And Core Et’ Barre’s strategy was successful because both girls signed up for a monthly membership. Now keep in mind Core Et’ Barre also offered a good product. Without that of course the girls wouldn’t of responded so positively to the hand written note and eventually signed up for a membership. But on another note, Core Et’ Barre got me to write this post when I saw the hand written note come in the mail thus enhancing awareness.
Cheers Core Et’ Barre, I wish you great success and I hope you continue to follow the Thank You Economy principles