There has been a lot of recent discussion on metrics for social media, and I think it's a healthy discussion to have. Amber Naslund has a great series on some of the metrics that matter, and K.D. Paine's PR Measurement blog is also a really smart place to get an education on the subject. Often, the issues that people are having with social media metrics have nothing to do with the social media part--it's a basic understanding of metrics, period. Most of the work on this topic centers around two dimensions: the stuff you did, and the results you got. Easy peasy. But, there is another dimension to social media measurement that often gets overlooked. It gets overlooked, because it's often a painful admission--opportunity cost. Any time you spend marketing has two costs--what it cost you to do the thing, and what you could have made doing some other thing. It's the first thing you learn in economics, but it's also the first thing you forget in business, because in business, as in poker and the stock market, we tend to forget the "bad beats" and artificially inflate the wins.
I'll give you an example. My company, Edison Research, is a small, highly effective unit. We pulled off the largest single-day research study in history--the 2008 Election Exit Polls--with a full-time staff of about 25 people. We don't really have a sales or marketing arm, per se--most of the "marketing" I do is squeezed in around client projects, so my time is definitely a finite resource. Yours is, too, so you'll understand this story all too well.
I recently wrapped up a marketing/thought leadership initiative for the company that had a social media component. If I measured the stuff I did against the returns I got, it did OK. A bunch of people tweeted about it, a bunch more visited our site, and a bunch of trade publications covered the effort. Measured. But--and it is a very big but--I spent about 30 hours of my time, and another 40 hours or so of our staff's time on this. Thousands of dollars, yes, and also time that could have been spent on other initiatives. I did a little post mortem on the project this week, and decided that it would have been cheaper for me to just mail everyone on our prospective client list a check for a hundred bucks and hope for the best. For the handful of prospects I really hoped to land from the effort, it would have been cheaper to hand-deliver those checks.
I'm being facetious, but only a little. The amount of time I spent on this initiative has a definite dollar cost, and those dollars could have been spent on a full-page ad in a relevant trade magazine, or an event sponsorship, or banner ads. You need to measure all of these things--because you need to know not only what the ROI of a social media initiative is, you need to know if the "I" could have been spent better, elsewhere.
Many of you engage in social media because it's cost effective. Maybe that's true, and maybe it isn't--your mileage can and will vary with each initiative. But it is important that as your capital permits, you hold social media initiatives to the same standards you would hold any other marketing, PR or sales initiative. To do otherwise is to sell yourself short by failing to adequately value your time. The choices are easy when all you can "afford" to do is social media. But as you grow, you have to be able to look at social media with a clear eye, and a realistic sense of social media's opportunity cost. Often--and I am convinced of this--it is well worth that cost. But never forget the bad beats.
This blog post took some of my time. If I consider my value--both to my company and my family--I can combine my actual salary with an aspirational, potentially inflated sense of self-worth and ballpark the cost of this post at $100. Should I have paid someone else $50 to write it instead? Those are the types of questions you should challenge yourself with, every day.
I've just had a bad beat, but I had the systems in place to measure that honestly, adapt my approach, and regroup for the next round. Here's what I know:
Spin lots of plates, but start them one at a time.
Measure your time, honestly.
Measure the value of your time, fairly but aspirationally.
The past is a sunk cost.
Do better. Move on.