“Not everything that can be counted is worth counting. And not everything that is worth counting can be counted.” Albert Einstein
Social media is a seductive tool for business. The thought of “engaging” closely with customers and prospective customers warms the most unromantic business heart. And that is why investment in social media keeps on rising.
However, social media seems to be different from other digital channels. Digital is completely measurable isn’t it? Well no; but social media is particularly hard to measure.
Once upon a time, social media evangelists used to say: “Measurement is simple. Just look at the number of Facebook Likes you have. See how many of these people convert into sales. Divide the value of those sales by the number of Likes and that’s your ROI.”
That assumes that the act of Liking results in the sale. And that is pretty questionable. (After all perhaps they Liked you because they were intending to purchase anyway.)
So if that isn’t a valid metric, how can you measure social media?
I think the answer is to say that there are a number of different types of metric, and some of these can be have monetary value attached, while others can have non monetary value attached.
(I know most digital commentators hate non-monetary metrics but the reality is that things like brand preference and share of voice are useful as they provide indications of success and failure which can be acted on.)
I am going to propose six different types of social media metrics:
- Vanity KPIs
- Indicative KPIs
- Brand KPIs
- Strategic KPIs
- Marketing KPIs
- Sales KPIs
Let’s take a look at each of these.
Vanity KPIs are of little, if any, value. They include:
- Followers and Fans. Many of these people will be irrelevant to you; perhaps they interacted once (typically this is how often they do interact) and then forget all about you. (If you think your Facebook Fans are constantly interacting with your brand then why is it that engagement rates almost always drop as Fan numbers grow?)
- This metric represents an “opportunity to see” (OTS) a post; but only in an unsatisfactory way as the OTS represents accounts who have access to the post not accounts who have any real chance of seeing it. (Take Twitter. On average each Twitter account follows 100 users, tweets 5 times a day and is on Twitter 5 minutes a day. That means that in those 5 minutes, the average user will have had access to 500 tweets posted that day – they would have to read two each second to read them all!
- Trivial engagements – Likes, Favourites. These are easy actions that mean very little to the user and so have little value to brands
Indicative KPIs are a bit more useful. They tell you that things are moving in the right (or wrong) direction but not much else. They include:
- This is rarely accurate but a “blip” in sentiment may indicate something of importance; and of course it can also be useful to compare your sentiment with that of your competitors as this may tell you whether you need to take extra efforts to out compete them
- The total number of weak engagements – Shares, Retweets. There is some small benefit in cementing a relationship and driving visibility through these engagements, although it hard to put any real value on them
- The total number of “strong” engagements such as comment and posts mentioning the brand: these are likely to be of greater value than weaker engagements but it is difficult to put a credible value on them
- Website traffic from social media. Likely to give you a warm feeling if rising, but of little value in itself
These are KPIs that indicate brand support; unfortunately some of these have to be measured using primary research (e.g. surveys) so they may be hidden unless budget is available. Examples are:
- Positive brand perceptions e.g. thought leadership (“sentiment” won’t be a useful proxy for this)
- Claimed purchase propensity
- Number of Follower/Fan “influencers” (i.e. people with a certain number of followers) including the number of influential prospects/customers and the number of media influencers (journalists, bloggers)
Strategic KPIs are particularly interesting. These KPIs can be extremely important but as they don’t relate directly to marketing investment or sales success they are very difficult to put a value on. That doesn’t mean they should be ignored. They include:
- Competitor benchmarking parameters such as Share of Voice and comparative sentiment
- Keywords around satisfaction as these can indicate areas for new product development as well as helping the development of appropriate advertising messages and search terms; particularly interesting are:
- Keywords related to dissatisfaction with competitors
- Keywords/topics that generate engagement
- Keywords in any comments
Keywords themselves are not strictly “measures” but the depth of insight they provide can be measured through volume and number of categories in any one period
Marketing KPIs are related to marketing success (or failure) and can often have a monetary value attached. Some of these parameters will be related to the website traffic generated from social media including:
- The cost of generating the equivalent amount of traffic volume via paid search
- The value of non-sales conversions (e.g. product sheet downloads) and leads (e.g. leads from email submission); to create a value these will need a further calculation based on the average number of sales that are made following a non-sales conversion or lead
- The value of back-links achieved from social media; again there will be a need for a further calculation based on the way that the value of SEO activity is measured
In addition there are some “pure” social media parameters that can be related to marketing:
- The number of “qualified” Followers/Fans (i.e. people identified as prospects) who can be given a value based on average conversion rates
- The number of people identified as being dissatisfied with competitors; these can be treated as leads and over time a value based on average conversions can be established
- The number of contacts with customers that have arisen as a direct result of social media activity; these can potentially be valued using the average cost per customer contact for channels outside social media
And finally there is a KPI that can be directly linked to sales: the value of sales that have been converted directly from SM leads. This is of course where the eyes of many businesses will focus. And it is undeniably important.
A caveat though. Social media is just one channel among many. All marketing touch-points in a customer’s journey to a purchase (search, advertising, email, social) will contribute to making that sale, not just the last one.
Just as it is wrong to ignore the contribution of social media when the final touch-point is an email or a search result, so it is wrong to ignore the contribution of email and search when the final touch point-is social media.
Any sales KPI therefore should accept that and follow the attribution method you use for assigning value to other channels.
It’s not easy. But then, who said it would be! This method of tracking social media returns won’t be 100% accurate. But it will at least be more accurate than a method that says that the only value is in a sale made as a direct result of a social media contact.