How to measure social media returns

“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.”

Hmmm.

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

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

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

Brand KPIs

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

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

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

Sales KPIs

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.

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Measuring social media engagement

Facebook engagement rates fall as your fan base gets higher. At first sight that seems odd. But of course it isn’t.

Most people tend to engage with brands infrequently on social media. Seduced by a particular post they may “Like” it on a whim, but then stay away from your page. They have little motivation to comment on or share other posts unless they are real fans. And of course unless you are spending serious money, chances are they won’t see those other posts.

So most Facebook “engagements” come from people who have recently become fans. The larger your fan base, the longer your “average” fan has been with you; and because of that, larger fan bases have lower engagement rates.

This is a problem for people using a common metric for evaluating social media effectiveness: the formula “Likes + Share + Comments / Fans” as it can make it look as though your campaigns are getting worse over time.

So how can you evaluate effectiveness on Facebook and other social media platforms? There are a couple of ways.

First there are some comparative measures. For instance you might want to compare engagement rate of different types of posts or different campaign themes. This won’t solve the problem of lower engagement rates with larger fan bases but it will help you focus on improving your campaigns.

Second you can measure engagement of recent fans. By dividing the number of engagement actions (shares, likes, comments) in any one period by the number of new fans acquired in the same period you will get a useful measure of true engagement that should be comparable across time periods.

Purists might argue that the engagement actions in any one period may be coming from people who became fans in an earlier period. That’s true; but I am not sure it matters much. For a start it is probable (at least, if you are using a period of 1 month rather than 1 day) that the number of actions from “old” fans will be low; but also if you compare different months you will be comparing like with like.

Ultimately though, “engagement” on social media is a measure of limited value. So what if people have engaged with you? What matters is their behaviour. Measuring that by using your web analytics to track visits generated from social media together with dwell time, page depth, loyalty and conversions is a far better way of measuring the effectiveness of your social media campaigns.

Measuring engagement

Many years ago, the on-line marketing industry shot itself in the foot by proclaiming that the web was the only truly measurable medium. It demonstrated this by showing how it was possible to track the viewing of an on-line advert through to a sale.

Great. But marketing has always been a bit more complex than that.

For a start not all media activity needs to end up with a sale in the same medium. And indeed, not all marketing activity needs to end up with an immediate sale (although mostly it will want to deliver a sale at some point).

But the claim had been made. And so a lot of people still expect digital campaigns to lead directly to a measurable increase in on-line sales.

In fact we need a more sophisticated way of measuring the effectiveness of on-line campaigns.

Even the “simple” business of sales attribution isn’t so simple. Many companies still count the last click as being responsible for a sale. And yet the sales journey might have started offline with a TV ad, moved on-line via some video ads, progressed with a search of an advertising strap-line that led to a website, and then ended with a search for a brand that led to the same website and an on-line sale.

Companies like MC&C are experts in attributing sales value across different media. But there is an opportunity to go further. We can also look at measures of effectiveness that are “softer” than sales.

I am talking about brand “engagement”. Measuring this is important for many marketing activities.

For a direct response campaign it is useful to measure engagement as a proxy for value created elsewhere – off line sales or sales at some point in the future.

For TV, press and on-line video ads, effectiveness can show the value of campaigns that aren’t designed to lead to immediate sales. And the same is true of PR and event marketing.

So how can we measure engagement? Well it depends on what we want to measure: brand awareness, brand perceptions, intentions, behaviour? And it depends on the medium.

For offline media it can be difficult to go beyond established methods of pre-and post surveys and surveys looking at brand recall and favourability. There are potentially ways of going beyond this though:

  • social media analysis can give clues about audience reactions, although this can be time-consuming to do properly
  • website analytics may disclose search terms that seem to be related to an offline campaign
  • eye-tracking could be used to identify the degree to which press ads or brand names and logos in TV ads hold the viewer’s attention.

It’s easier with on-line media. Where web display ads, or other marketing activity, generate a click but not a sale there are opportunities to examine a combination of page depth and/or dwell time with return rates: this is because people who stay a long time and return several times are likely to be more engaged with a brand.

More complex measures involving the measurement of accumulated indications of engagement are also possible. These indicators might include:

  • Use of search box for product searches
  • Visits to product pages
  • Downloads of product PDFs or vouchers
  • Abandoned baskets
  • Use of store locator tools

Image a visitor who clicks on two product pages, downloads a product PDFs, and then uses a store locator. They could be assigned a value of 6, derived as 2 (a score of 1 for each product pages) plus 2 (for a pdf download), plus 2 (for using the store locator). In contrast a “busier” visitor who visited five product pages but didn’t download anything and didn’t use the store locator might only be awarded a value of 5.

On-line video provides yet more opportunities. Certain measures are obvious: plays, completed plays, average length of plays, click-through rate. But it is often possible to go further. If a YouTube channel has been set up then you can look at many more indicators such as:

  • Likes
  • Shares
  • Channel subscribers and channel views
  • Feedback and comments
  • Video hotspots

In addition you can gain useful insight from identifying how the video was discovered – embedded in your website, via Google search, via YouTube search etc. And where the source was a visit to your website via Google, tracking the visit back to the search term used may also be valuable.

What would these insights tell you? On their own, perhaps nothing. What does it matter that the average visitor has an engagement score of 7? What does it matter if a video has 9900 “likes” or (beyond a trivial media value) has been shared 136 times?

But if these scores are used as benchmarks then they can indeed be valuable: by comparing data over time it is possible to track back to campaigns and make reasonable assumptions about how particular campaigns have increased engagement; there may also be potential opportunities to relate levels of engagement with sales.

Engagement is a hard thing to measure. But it does have some value. And any attempt to measure this is better that simply saying “I can’t measure it so it must have no value”. To rely solely on media that deliver hard sales data would be to miss out on many valuable opportunities.