Social Media ROI: You’re Popular? So What.

LauraN546
Laura Nguyen Manager, Perrigo

Posted on July 15th 2011

Social Media ROI: You’re Popular? So What.

Courtesy of Stuffosaurus

You’ve met these folks. The ones with 2 million followers, 1.2 million people who like them on Facebook. And those with a Klout score 5 times higher than you. Cue the musical medley. Do you hear it? It’s the sound of Kristen Chenowith … ah yes, that’s “Popular.” But really, what does it all mean? Should we measure our worth by the number we wear?

Last month, I attended a KC/IABC program on ROI. In this discussion, one of the presenters exclaimed, “Measurement is easy! Social media measurement is easy!” The room fell silent, as we all said to ourselves, “Well, if it was easy, 60 other people in this room wouldn’t be here.”

Measurement is not easy, and social media measurement is especially in question. There is no consistent model and no one is right, meaning no one is completely wrong. So, what do you do if you’re implementing or thinking about implementing social?

For me, social media should be measured by engagements and the impact they have on conversations and traffic, not the pure volume of friends you bought or happen to accumulate over time. As we sit down and talk to clients about ROI or ROE, we have to look at two distinct things – our outputs (activities) that lead to our outcomes (metrics). The importance of viewing your social media participation through these lens is to get a tangible grasp of what we can measure, which we hope will answer the question of “Why are we doing this?” Popularity goes beyond simply being the loudest person in the room. And to be honest, we should go beyond trying to be popular, and try to find purpose in being a credible, valuable resource.

A ROE/ROI example can be found below, showing the output versus outcome discussion, shared above.

Output Outcome Results
Tweets you send Increased number of followers Increased word-of-mouth exposure
RTs you share 1:1 engagement Increased word-of-mouth exposure
Responses and conversations via social 1:1 or 1:few engagement Increased word-of-mouth exposure
Blog posts you publish Shared content, content liked by others, comments Sentiment; Blog traffic; monthly unique visits, page views
Facebook posts you share Shared content, content linked by others, comments Sentiment; increased traffic to Facebook; increased traffic to other sites

How are you looking at measurement and engagement? Do you use a similar model or a different model?

Comments

Two quick thoughts. Hope you don't mind.

1) At the risk of repeating myself, if you're not tagging - a la Google URL builder - a high percentage of the links you push out then you're not marketing. I even advocate a strategy of  tagging links to other sites just so you can watch clicks in bit.ly. FYI, every link should be uniquely tagged for each channel. Time consuming? No, just being thorough and being intelligent.

2) There are two types of marketers. Old schooler who still believe it's a creative profession and aren't by nature fond of numbers (and accountability). And new schoolers who believe in analytics, measurement, numbers, etc. They want proof, or at least more than a warm fuzzy hunch. If you think you're trying to make the transition but aren't convinced then I recommend "What Sticks" by Briggs and Stuart. It's not new but it does a great job at spotlighting the flaws of old school marketing.

Thats certainly one way to look at it. But here's what I and a few otehrs have to say about the ROI of Social Media. What's your take on that? http://bit.ly/nFHMJm

Laura (& Jim) I'm  okay w/ outcome-based results as a way to look at ROI, but your output may not produce the outcome or result you want unless you used a specific obejctive with tools and metrics designed to reach that objective (see KD Paine, Olivier Blanchard and others). Jim-the trouble with this sort of approach is that social media can never be measured as an entity (social media). I agree that measuring the ROI of my mom IS like trying to measure the ROI of social media as a media. But, specific objectives can produce tangible, specific results. That, Laura, is what I think is hard about measurement. Too many people start with tools instead of goals/objectives, and then using tools to reach a measureale result. Good article!

Hi Laura, interesting article and model. My 2 cents are like in business world if you are selling product(s) (as a vendor) which can go in any industry vertical , the perceived ROI we vendors propose could be very different than actual ROI the companies (buying our product) associates to the same product(s) . Why? as processes, success factors, eco system etc. differ from one industry vertical to other hence ROI value gap perceived vs. actual may vary. Hence modellers work very hard to tweak models to reflect few of above factors i suggest which vary from industry to industry to reduce the delta in ROI gap.

If you take same anology and apply in social media for consumers, the variablity factor or ROI is magnified 100 times or more for that social media platform. So its surely not easy to measure or come out with a model which will work across the board. I think eye balls are essential to any social media platform but social mediums which fail to understand and reduce the ROI gap the consumer (eyeballs) who use them associate with the medium (very much like vendor to company relations in enterprises)  those mediums will be doomed eventually...example friendster, myspace etc. time will tell who is next to go

Sorry for self-promotion guys, but this is exactly what we do at Campalyst.com with facebook pages. In fact relying on the multi- milions of fans is wrong purely because most likely only 10-20% of fans see your updates. What we see as the good news though is that the clickthrough rates and conversion rates for Facebook fans are way higher than for other sources of traffic, so if you manage to reach them, they react well.

Yes, popular or profitable...what do you want to be? Both are possible but don't muddle up the tools that you need to achieve these 2 separate goals.

For B2C marketers, social media seems to be a must. Tools and techniques are widely available.
For B2B marketers, I feel it's a bit early to be devoting a lot of time and money to F, T and similar. LinkedIn is the main one I would concentrate on most right now.

However, if B2B industrial companies and manufacturers had (sorry for the generalisation) more effective websites with correct SEO and an Inbox full of enquiries, the question of social media would probably be viewed differently. Many B2B companies just don't even recognise what an online success looks like. Hence the potential for false interest in what profits social media might bring.

Nice article, Laura.