Performance measurement and Return on investment (ROI) have become the ‘hot’ social media topics of 2010. As stated by Lisa Barone:
“2010 is the year to start putting real metrics on your social media activity. Because if you’re not monitoring it, you’re just playing with it”.
Unfortunately, as shown in Figure 1, only a minority of companies actually measure Social Media ROI.
Figure 1: Social Media ROI
A number of different approaches to social media performance measurement have been developed. In Step3/Post 1, we review some of the most important articles in this area. Our own ‘4Is’ approach to social media performance measurement is presented in Step 3/Post 2 to follow.
Approaches to Social Media Performance Measurement
There are a growing number of online articles discussing social media performance measurement and business impact. Many of these provide detailed lists of metrics and KPIs to use. Four useful references are provided below:
– A report by the eConsultancy Group lists 35 social media KPIs for measuring engagement.
– A list compiled by Rachel Happe provides a very long and detailed list of measurement criteria.
– A very useful article on ‘The Maturation of Social Media ROI’ can be found on the Mashable web site.
– An interesting presentation on measuring social media campaign effectiveness can be found on the Slideshare web site.
The list of Social Media performance metrics compiled by Lisa Barone is particularly useful and relevant. The author identifies five broad categories of social media performance metrics including:
• Growth – covering measures such as the number of facebook ‘likers’, twitter followers, RSS subscribers, youtube video views, blog subscribers, number of message/forum posts, number of tweets etc. On their own, these are not particularly useful metrics as quality is often much more important than quantity, but they do give an indicator that things are moving in the right direction so long as quality of follower is being measured too.
• Presence – this measures how visible you are in the social space and your visibility compared to competitors. It includes measures such as share of conversation vs. your competitors; the overall ‘buzz’ being created by your brand; comments/posts about your brand; mentions (linked or unlinked); product reviews; company reviews; who is talking about you, where online.
• Conversation – while presence measures who’s talking about you, conversation measures who you’re talking to and the effectiveness of those conversations. It measures the quality of engagement and with who?
• Sentiment – a measure of what people are saying about your brand and the positive/negative sentiments being expressed. Key measures include: emergence of brand evangelists; ratio of positive/neutral/negative mentions compared to your main competitors; recommendations; etc
• Referrals and Conversions – the sales leads and referrals generated from your social media activities, conversion rates etc
In an interesting interview with Jim Sterne (the ‘godfather’ of e-marketing), talking about his new book ‘Measuring the Business Value of Social Media Marketing’, the author states that the main measures of social media effectiveness are reach, influence, sentiment and business outcomes.
“Social media KPIs are all dependent on the individual organization and its goals. But generally, we are looking at ‘impressions’ or reach. How many people had the opportunity to see the message? Next, we want to track influence to see whom we should be catering to and making sure we treat them well. Then, there’s the question of sentiment – something we may never be able to monitor technically – to help us get a handle on and track brand attitude. Finally, we need to measure business outcomes. Is our activity on social media driving visits, downloads, registrations and sales?”
In Step 3/Post 2, we will introduce our own ‘4Is’ approach to social media performance measurement and show the way in which emerging Social Media Monitoring Tools can be used to monitor and evaluate the overall ‘buzz’ being created about your brand. In Step 5, we will show the way in which a Balanced Scorecard approach can be used to link social media performance to overall business goals and objectives.
A brief presentation on ‘Social Media Performance Measurement and Business Impact’ can be found here. A more detailed presentation, with audio by Alan, entitled ‘Does Social Media Pay?: Campaign Tracking and ROI’ can be found here.
Jim and Alan