Placing Value on Social and Online Media Buzz
Is it really possible to measure the impact and quantify the monetary value of 'buzz' generated through social and online media channels?
A few weeks ago, a New York-based company called General Sentiment released a report that attempted to do this.
Below is a graphic from the report where General Sentiment equates the value (in USD) of media mentions and buzz for 20 global companies, measured from October to December of 2010:
General Sentiment is a technology company that provides research to help businesses evaluate their brand performance in the media (social and online).
Among other things they claim to have developed a system that automatically determines the volume of mentions and sentiment regarding a brand, company or person. Combining this data with website traffic and online/news readership figures, they determine the purchase equivalent value (in USD) of brand exposure for each company across the Internet.
I came across the report from a post written by Philip Elmer-DeWitt at Fortune online. Comments on Philip's post range from high skepticism to pure absurdity on the ability to place a true monetary value on the impact of social and online media buzz to a company and its brand. You can read the story and comments here.
I give General Sentiment credit for taking on the very difficult challenge to develop technology and research to provide such measures, assessments and data points.
These are important data points (in part) to support decisions associated with communication and social business program investments. It is amazing how many business leaders underestimate, undervalue and misplace the importance and power of communication in the era of social business.
What is buzz and can it really be measured?
The value of buzz or word-of-mouth (WoM) extends far beyond just the measure of people reached.
For me, buzz is essentially the conversation or flow of influence that takes place independent of the direct involvement of a company or organization.
It can result from someone's experience with a company (brand, product, service); a reaction to an event (crisis, legal, business); or a reaction to a company's actions or activities (public statements, political moves, competitive position, thought leadership, etc).
There are many great analytic tools on the market that make it easy to monitor conversations in social and online media environments on any given topic or issue important to a company. The question is, how do you measure and value the true impact (positive or negative) of buzz on a company and its business?
The model that General Sentiment uses is a bit sensational as it looks to value the impact of social and online media in the same way that traditional media values the cost of advertising (based on subscribers and/or the demographic of people potentially reached).
The issue here is that the model for advertising has changed as a direct result of social media.
Companies are now able to gain exposure and reach their key audiences outside of traditional advertising models or editorial control. As such, how one measures the value of social media and online media buzz is very different to the valuation of traditional advertising.
Nonetheless, the effort by General Sentiment is a good start as they use common metrics that most marketing executives and media companies can understand - with eye-popping effect. And perhaps this is the point.
Benefits beyond buzz.
The eye-popping figures that General Sentiment places on the impact value of social and online media (whether you agree with the methodology or not) brings attention to an important aspect of 'value equation' in a new world of communications and social business - and how companies need to think about investments accordingly.
There is no doubt that 'reach' is an important metric to support the justification of investments in communications and social business programs - but - it is not the single most important measure of total value or impact.
Experience is the essence of buzz.
As I have previously written, social media has evolved to become a very powerful medium for people to channel emotion, context and experience.
- Emotion: How I feel...
- Context: What I think or where I am...
- Experience: What I did and how I will act as a result of...
Perhaps the most important component for business leaders to understand and appreciate in a social world is 'experience.'
The collective power of experience is the essence of buzz in the social media environment. Buzz from positive experiences are priceless...buzz from negative experiences are highly destructive.
Companies need to look at the value of social media beyond just mentions and reach and use it as a way to understand and cultivate positive experiences for their key audiences.
Insights gained from tools and research provided by companies like General Sentiment and the Social Media Group should be most appreciated by business leaders as a way to gain deeper understanding of market experience with a company and its competitors (brands, products, services, trends).
By acting on the insights gained from these tools (to understand and generate positive experiences) the true measure of buzz will ultimately be through impact on top-line growth (sales) or any other metric of engagement (vote, endorsement, etc.).
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