Social Media Metrics: Still a work in progress

Posted on November 25, 2013 by ajhuty

Through my research for this blog I have discovered several different methods to measure Social Media success. Some try to draw a direct link to sales volumes, while others try to measure web traffic levels and link them back to company objectives. What I have learned from my research is that there is no shortfall of people trying to find the best way to measure success in this relatively new forum. There is an endless supply of “10 Ways to Measure Social Marketing” type articles that come up after a quick Google search. While this can be helpful as eMarketers try to find the metrics that work best for their business, it can also result in companies using the wrong metrics to measure their marketing investments. With so many options, it can also be easy for eMarketers to pick the metrics that make them look the best to the company’s executives for personal gain!

So what are the metrics that should be used for Social Media campaigns? I wish I had an answer to this question. In fact, I wish anybody had an answer! In my search for the answer, I found that Don Bartholomew (SVP Digital and Social Media Research at Ketchum Inc.) summed it up best in his personal blog posting a few months ago. I couldn’t agree more with his opening statement, in which he states the following:

“We are at a crossroads in social media measurement. Expectations for rigorous and relevant measurement have risen more quickly than delivery. Too many are fixated on quantitative outputs – speeds and feeds – at the expense of understanding the outcomes achieved by social media marketing and social business. There is still too much emphasis on vanity metrics and not enough on business results.“

Bartholomew goes on to list some of the key steps required to truly have useful Social Media metrics, and the most intriguing one is the requirement to have a standard set of measurements and definitions across industries. This would create a system whereby campaigns can be measured against each other, and misleading metrics can be abandoned completely. To my surprise, there is already an international and cross-industry organization setup to reach this goal! Smmstandards.org bills itself as “A Cross-Industry Effort to Simplify and Unify the Measurement of Social Media”. This organization met in 2011 and set out the following set of priorities for which standardized measurements should be created:

Content and Sourcing
Reach and Impressions
Engagement and Conversation
Influence
Opinion & Advocacy
Impact & Value

Impact & Value is of most interest to me, as this is where the valuation of programs from a financial perspective would fall in. I believe that a standardized measurement system will go a long way in validating the benefits of Social Media marketing, and will push the medium further as eMarketers increase presence there. Smmstandards.org has already made some progress in this regard, and I look forward to monitoring the evolution of their value metrics as Social Media space becomes more and more popular.

Digital Budgets – Where does the money go???

Posted on November 25, 2013 by ajhuty

I’ve read plenty of articles about ways to measure the success of the Social Media campaigns that companies employ, but have not yet looked into how much companies actually utilize this channel over other more traditional ones. TechnoratiMedia published the results of a survey earlier this year that investigated this very subject, entitled the “2013 Digital Influence Report”. This survey was completed by 6,000 influencers, 1,200 consumers, and 150 top brand marketers, and provides valuable insight into where companies are investing their Marketing budgets and which online mediums provide the best bang for the buck (in terms of level of influence).

First let’s get grounded on the actual dollars we are talking about. From the below figure pulled from the TechnoratiMedia report, we can see just how much top brand marketers spend in the Digital channel. In my experience, it is difficult to repurpose a firms’ traditional channel spend towards new digital initiatives. This can be a long and drawn out process, but the spend figures in the below table are already classified as digital and we can safely assume that these figures will only increase over time. Amount spent will obviously vary depending on the size of the firm, but we can see here that we are talking about substantial investment going into the digital channel in 2013.

Now for the interesting part – the report further breaks down the digital bucket into various components, and as can be seen in the below chart, just 10% of this is going towards Social Media at this time. Display ads account for the majority of digital spend, and this may be because it is the oldest form of advertising in this relatively new world. I would assume that over time the Social, Mobile, and Search pieces will increase more and more, and new forums will become available that do not exist today.

The above chart also breaks down the Social Media spend into subcomponents, and from this is where the most interesting finding of the TechnoratiMedia report is found. Facebook is getting by far the largest piece of the Social Media investment pie at 57%, while Blogs receive just 6%. However when we look at which forums actually influence consumers purchase decisions (as seen in the consumer chart to the right), both of these are tied at 31% response rate. This strikes me as a very significant piece of information. It seems that while Facebook is important, Blogs can be equally as effective at what is likely a fraction of the cost. My learning from this report is that marketers should consider investing more heavily in specifically targeted blogs to get to the influencers, as these are the groups that are impacting the consumers decision to make a purchase.

ROO???

Posted on November 24, 2013 by ajhuty

In last week’s eMarketing class we discussed metrics and measurements of social marketing campaigns, and a very interesting new concept was raised; ROO. That was not a typo. Rather it is a new method of measuring the success of marketing campaigns, and stands for Return on Objectives. With ROI being difficult to measure for Social Media campaigns, alternative methods of measuring success have been popping up and this is one of them. A quick Google search turns up an interesting Forbes article that makes mention of ROO, and several other new measurements as well (Return on Engagement, Return on Impressions, etc). The key to ROO, according to the article, is accepting that “not all goals are measurable with hard data”. As an Accounting professional this is very hard for me to contemplate, but I can see the authors point.

ROO requires you to measure very specifically against pre-set goals and objectives of the organization. From a financial perspective this often means measuring Revenue and Operating Expenses, but from a brand and marketing perspective there are other objectives that can be measured over the long and short term.

A great example of this is shown by Empower MediaMarketing. One of their clients’ goals was to increase “positive online discussion of their brand”, so Empower began a blogger outreach program for them. While they are unable to tie any results back to sales specifically, an increase in online discussion would likely lead to better brand awareness and this could lead to customer loyalty and sales in the future. The investment in Empower, and in the blogger outreach program, could therefore be measured by monitoring discussion before and after the program, as shown in the below chart pulled from Empower MediaMarketing’s website.

While this cannot be immediately translated into financial benefits (or, more specifically, ROI) the Accountant in me is pleased to see that success can still very clearly be measured for any objective if you know what you are trying to improve.

CTR’s, CPC’s, RPV’s…and XYZ’s?

Posted on November 19, 2013 by ajhuty

My head is spinning from all of these acronyms, but this report from Adobe’s research wing entitled “The Social Intelligence Report” provides a lot of good information about tracking the increased value of social media ad space (specifically for Facebook, Twitter, and Pinterest).

As the below graph shows, Facebook CTR (Click Through Rate) has increased by 275% over the past year. This is an incredible improvement, essentially meaning that the same ad popping up on Facebook will now get over 3 times as many click throughs as it did at the same time in 2012. This is clearly a favorable trend for Facebook as they look to improve their revenue generation model. While this is an opportune time for Facebook to increase fees for what is now more valuable ad space, the CPC (Cost per click) has decreased sharply as well, running at 40% below the same period last year.

Apparently the ROI of ads run on Facebook is also on the rise, at 58% higher than the previous year. At first I was puzzled by this information; I have read in so many other articles and papers how difficult it is to calculate ROI on Social Media spend, but Adobe seems pretty confident in their figures. As I read further it became pretty obvious though, particularly when looking at the below chart.

This figure shows the growth in RPV (Revenue per visitor) of each of the three social media sites that were part of the study. This seems like a brilliantly simple and effective way of measuring the success of a campaign involving the purchase of social media ad space. While CPC’s, CTR’s, and CPM’s can give quality insights into ad effectiveness, nothing will tell you as much about the impact to the bottom line as the ability to measure revenue directly coming from these ads. As the increase in RPV from these platforms continues to rise, it could become a necessity for marketing professionals to make social media ad space a regular part of their marketing mix.

Little confidence in Social Media metrics, but plenty of $$$ spend

Posted on November 18, 2013 by ajhuty

In my quest to find out how to accurately assess the ROI of Social Media campaigns I was not surprised to find that I am not the only one seeking this information. This is apparent in a 2012 survey conducted by Vizu, a Nielsen company, in which they asked 500 US digital marketing professionals a series of questions to see how they felt about paid social media advertising.

One of the key findings of the survey is that marketing professionals are uncomfortable with the lack of clear link between paid social media spend and benefit to the firms bottom line. A better calculation of ROI is specifically requested, with 58% of advertisers and 65% of agencies stating they would like more clarity around “how to measure social media ROI” (see Fig 14 and Fig 15 from survey, presented below). They are also frustrated by the lack of clear link between social media advertising and sales or brand lift. Current measures of success use things like site hits, Facebook likes, link shares and click-through-rates. However this is not leaving much confidence with the marketing professionals who are buying up ad space in Social Media.

This finding, while confirming some of the thoughts I have had in many marketing meetings, also leads to another significant question: if marketers are unclear as to the true benefit of paid social media advertising, then why do they continue to invest heavily in this space?!? The above mentioned survey actually goes on to show that most marketers are leaning towards increasing spend in social media at the expense of other more classical channels. Fig 3 below, taken from the survey, shows that 64% of respondents will increase paid social advertising budgets and decrease spend in other channels.

It seems to me that while marketers are not able to comfortably assess the exact benefit to the company’s bottom line, they still see tremendous upside from paid social media advertising and are willing to dive into it while siphoning off funds from other programs. There is clearly a benefit to advertising in this space, even if it cannot be accurately measured at this point. Well, either that or marketers are all insane and are simply chasing the latest online fad without truly understanding the benefits! This will clearlyrequire some more investigation on my part.

Marketing You Can Account On

Measuring Social Media Success, by Aman Jhuty

Monthly Archives: November 2013