5 things to measure in social media ROI
We’ve been talk A LOT about social media analytics, metrics and measurement here on this blog. In part that’s because I really believe that social media is an important tool and for the tool to be appreciated by “higher ups” aka your boss, there has to be measurement associated with it, particularly since we’re still fighting the battle of whether social media is a viable business tool at all. As evidenced by this video created by the Unmarketing Team of Scott Stratton, which tickled the funny bone of lots of social media peeps last week:
Social Media ROI by UnMarketing
Social Media Metrics and ROI for You
As funny as it is, this video doesn’t really address the measurement issue, it sort of goes round and round in a comical way. While that’s the way so many conversations are taking place, its mostly because there is no single way to measure social media. Its still a moving target – in fact, I believe it will STAY a moving target. Right now and in the future, measuring social media will come down to determining your definition of success and measuring against that definition. In other words, who gives a hoot what works for someone else – you want to create a program that works for YOU and your needs!
I thought it would be helpful to discuss some of the elements that can and should be measured in social media. Because social media ROI is really a combination of many different types of valuations. I use these elements in my ROI tool and find its extremely valuable in helping people see the big picture of social media value.
What we can measure for social media ROI
CPC: Cost per Click advertising is still a highly effective way to drive traffic to a website, but how does social media compare? While its still a relative bargin, social media can also drive traffic to a website without the same costs associated. When I consider the value of social media, I consider how much it would cost for my client to have purchased thatÂ equivalentÂ traffic. If we are running a CPC campaign at the same time, then its even better because we can compare the differences in visitors in terms of conversion, length of time on the website, etc. But even without running a CPC campaign, we know that there is a value to website traffic, and we compare the measurement to the going-rate cost.
AVE: Advertising ValueÂ EquivalentÂ is something that PR professionals have been using for years. While there is some dispute in the PR community about AVE, it is still the most widely used. Essentially, AVE looks at earned media and assigns a value to it based onÂ equivalentÂ advertising rates. I personally consider this a conservative valuation since independent coverage of your product, company or services holds more weight than an advertisement. But the AVE model does allow you to take that into account by assigning a weight to the coverage. Social media often generates attention in traditional media, so when that is the case, I include AVE in the ROI model.
Word of Mouth: Word of Mouth is essentially the value of conversation others are having around your company, product or brand. This is perhaps one of the hardest things to measure in social media. I measure it most frequently when there is an influencer program, but that isn’t the only time its valuable.Â In my model I based the use of Word of Mouth off of McKinsey Research valuation of Word of Mouth (WOM) value which looks at Relevance, Trust and Quantity. Â I also assign a weight to those factors, depending on importance to client and value. Â Within WOM valuation, we include Â things like Facebook comments and shares on Twitter from an Â influencer or from the company itself. The new Google Ripples, which is used for Google+ postings, Â is going to be able to give some exciting graphical evidence to WOM valuation. I anticipate that Google will also begin to add a value to those shares much the way they do in Google Analytics for clicks or other pre-set goals.
Sales and Brand Value: Taking a baseline before, after and during a campaign will often provide some enlightening information. WeÂ definitelyÂ want to review not only number of sales, but average sale and return customers before, during and after a campaign. For this to beÂ efficientlyÂ measured, we’ll need to make sure that we’re collecting the information consistently. Its easiest to do this with digital sales, but its possible to do it with person-to-person sales as well.
Customer Service (savings): If we measure how social media customer service compares to phone or email customer service, we can find out if there are efficiencies of using social media as a customer service tool. When there is a cost savings, then that should be included in the ROI model as well.Â For example, if a staff person spends an average of 4 minutes per inquiry responding via email, but only 2 minutes responding via Facebook or Twitter, that’s a 50% decrease in time which adds up to a cost savings.
You may decide that you want to include other elements into your own ROI model and to be fair, mine is modified a little bit for each campaign. Not everything element will be included, however, make sure you aren’t missing anything that SHOULD be included.Â For more info, you can see my presentation on SlideShare.net.
What other things do you think you should measure that aren’t include here?