Posted by You can measure everything online, so why aren’t we?
eMarketer published a news item today titled, 2012 Trends: Social Media Metrics Take Center Stage. The beauty and promise of the digital channels is that Marketers can measure, track and play with analytics unlike any other advertising or marketing channel that we have ever seen before. And yet, with all of this potential and opportunity, we’re trapped with a "me too" mentality that finds more and more brands doings things in Social Media with the sole purpose of making sure that they’re just keeping up with The Joneses (the competition), instead of carving a unique path and making sure (on the upfront) that they’re establishing both relevant and money-thinking return on investment programs.
Here’s the truth…
This is what the eMarketer news item says: "The Econsultancy report ‘The State of Social Media 2011’ noted that 41% of marketers surveyed had no return on investment figure for any of the money they had spent on social channels as of October 2011. Further, only 8% could attribute ROI for all their investments in social media. The survey sample was primarily UK companies, with some representation from other territories. A 2011 MarketingSherpa study noted that only 20% of US agencies and consultancies surveyed said their clients thought social media marketing was producing measurable ROI. However, 64% said clients were confident that this form of marketing would eventually deliver a return and were willing to conservatively invest in it."
We’re doing it all wrong.
For Marketing to elevate itself within the c-suite, we can’t be recklessly playing with Marketing tactics (especially newer ones that don’t have the established credibility) to be pushing programs out there with the hope that there may… eventually… be some kind of ROI. This is the business equivalent of running around like chickens with their heads cut off (which was never a pleasant or appetizing visual). There are probably countless reasons why this is happening, but gazing at that quote from the eMarketer news item above, it seems clear that most brands jump in because their competitors are doing it. It also seems like they’re trying a lot of different things in the hopes that something will hit, click or get talked about.
Start with the strategy.
While it may sound redundant (if you’ve ever read this Blog before), when you start with a strategy, you’re defining your goals, key performance indicators and the desired outcomes prior to publishing anything. As a core component to the strategy, you should also define the metrics and how they will be measured (the analytics). It’s fine if there are certain components that you can’t measure (i.e. some of the more semantic dialog that may take place on a channel like Facebook because brands don’t get access to all of the data), but beyond that: don’t do anything that doesn’t add economic value to the company (as my friend and distinguished marketing professor, Ken Wong, likes to say).
If you can’t measure it, benchmark it and iterate on it it… don’t do it… please.
Never another podcast episode or article 
Mitch been too long since I been here. You are correct 100%. Social Media has fuzzy metrics and roi not unlike other channels. But if you define some goals upfront that you can measure and say ‘here is what they are can we invest?’ you can get buy in from the C-Suite. Great post!
Mitch great post. What social media measurement tools do you recommend?
@Todd Bartlett: Here’s a blog post that highlights four metrics that you should measure across all social channels: http://bit.ly/rocksocial
In the post you’ll see a very strong sense of the vibe that Mitch’s post above has. If you can measure the impact of your social efforts, some direct impact, then sadly you’ll get laughed out of your CEO’s office.
To avoid that measure the four metrics in the above post, and most especially #4.
All the best!
Avinash.
I’d add one clarification based on some great stuff I recently read in measurement maven Katie Paine’s book “Measure What Matters”. She says the competition is, in fact, the best benchmark to measure against. So trying to keep up with the Joneses is OK – as long as you’re keeping up with the ones who tie their social media programs to the bottom line.
@Avinash Kaushik Thank you for the reply. I am also a big fan of your work.
When I read the eMarketer article yesterday, I had the same reaction. I could feel myself wincing while reading it.
One of the metrics I was surprised to find missing from the survey was cost per lead or some measurement of customer acquisition costs via social media activities. That’s economic value which can be measured relative to what you were previously spending for lead generation (i.e., advertising spend).
HubSpot quantifies this as an important financial metric when evaluating their inbound marketing activities by channel (as well as their 4,000 clients). Does the C-Suite buy into measuring this metric (and a host of other financial metrics HubSpot measures)?
Absolutely. Sequoia Capital, Google Ventures, and Salesforce.com said so with a $32 million vote of confidence / investment earlier this year. And, those folks don’t invest money without the expectation of a significant return in investment.
I kind of agree with you and kind of not.
First let me premise my remark by saying that I am a numbers guy and concur 100% that every marketing activity should be measurable and connected to a strategy that increases shareholder (or stakeholder) value.
But here’s another view. In my classes, I walk my students through a case study illustrating a web of social media connections that created incredible business value — a new mentoring relationship, content contributotrs, problems that were solved, employees that were hired.
After we list these benefits, i turn to the class and ask them “How many of these undeniable business benefits could be neatly plotted in an Excel spreadsheet?”
The answer of course is none of them. But that doesn;t mean these QUALITIATIVE benefits are not legitimate.
So the search for ROI is real, but for many businesses that may be impractical and actually misguided. The most successful social organizations will also account for the stuff that won’t show up on a pie chart.
I’m pretty sure we agree on this, but I wanted to bring the point home.
Mark, I see your point. However, those benefits you listed (new mentorship, content contributors, etc.) can potentially be put in an Excel spreadsheet.
– Did they save you time? ($$)
– Did they create new partnership opportunties or new streams of revenue? ($$)
– Did the new relationship create a new vendor relationship ($$)
– Did one of the new content contributors create additional sales or reduce expenses ($$)
While I agree with your overall statement, there are always ways to break down actions into something measurable.
As a current marketing communications management degree student I have to consider planning, strategy, audience, defined goals and evaluation methods as part of my assignments. Thanks for the reminder that these aren’t just a way of getting great grades. I can’t imagine forgetting about them, but apparently some people are…
@Avinash Kaushik your blog post that highlights four metrics that you should measure across all social channels was exactly what I had been looking for. Thanks!