BrandSavant

Gaining Insight From Social Media Data

What You’re Missing By Measuring Social Media ROI Online

by Tom Webster on July 15, 2010

lounge.jpgThe short answer is: a lot. If your social media efforts are strictly tied to tweeting out coupon codes, then you have a pretty direct and reliable measure of the efficacy of your efforts: simple conversion. For the rest of us (and, that’s pretty much 99% of us), online measures are not going to capture the full impact and value of social media for your organization. There are lots of smart folks in social media monitoring and sentiment analysis trying to crack the ROI nut, trust me – but mining unstructured data alone will never truly quantify the value of online engagement to offline sales.

For instance, Southwest Airlines (SWA) has a notable presence in social media, particularly with their Twitter account at @southwestair. A lot of people talk about them online, and a lot of the chatter about SWA (particularly in comparison to some of their U.S. competitors) is positive. Buying air travel, however, is not a spur-of-the-moment decision for most people (myself excluded :) ) There is likely to be considerable distance between the point of influence – being favorably predisposed to SWA through their social media interaction – and the point of purchase. In the intervening time, SWA is also likely to run some kind of sale or promotion, and while it may have been that promotion that actually prompted the purchase, it may also have been Southwest’s online behavior that put them into the purchaser’s consideration set.

See where I am going with this? If the offline sale gets the “credit” for conversion, the efforts expended in social media – however important – get little or none. Parsing out the impact of cross-channel media on purchase behavior is a bit of rocket surgery, but well within the purview of a competent CMO – provided, of course, the right inputs are available. If you are only measuring your social media efforts by mining unstructured online data (monitoring, sentiment analysis, etc), then you may be capturing enough to track reputation, or the health of your brand on the social web, but you aren’t tracking enough to make the connection to purchase behavior, particularly in longer sales cycles.

This isn’t to say that you shouldn’t be monitoring or mining this data online; it’s an essential input to the process. You do, however, need to augment it with offline inquiries. This may mean commissioning additional online or offline research projects (depending on where your transactions actually happen), or perhaps adding a few social media indicators into the data you already collect, but the bottom line is that this isn’t really a mystery. It’s done every day by marketing departments all over the world, for other channels and media.

Here’s what prompted me to go down this particular rathole today: I am currently working on a project to measure the impact of a campaign that will target visitors to minor league ballparks across America. The campaign, which has a variety of components, hasn’t run yet, but we are measuring today, in the actual ballparks, before a single tweet, billboard or radio ad has begun. By conducting offline pre-engagement measures at those ballparks, we can sample the fans and develop a reliable baseline for our client. Later, after the campaign has run, we’ll conduct the exact same measures, in the exact same way. Our client will know precisely what worked and what didn’t work (online and offline), because we will have the apples-to-apples, before-and-after analysis to determine what components were successful, and what aspects didn’t perform.

Pretty easy stuff, really: measure before, measure during, and measure after. Measure online, but also measure offline. Works for out-of-home media, works for TV and it will work just fine to quantify the value of your Twitter account. Mining online data can give you a snapshot of what people think about your brand or product on the social web, and tracking this data might even give you a sense of how these perceptions change over time. For most brands, however, the actual behavior change occurs elsewhere. It might happen in an Amazon shopping cart, at a car dealer, or even at a local ballpark. When you can sync your online monitoring efforts with offline measures, one calibrates the other – and the true ROI of social media can be measured, understood and appreciated. For my friends in the social media space, that is what I want for you.

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  • http://www.thearf.org Lynne d Johnson

    Tom it was a delight to read your post. I’m in total agreement with you on this. Measuring social media is more complex than simply measuring reach, or clicks, or fans, or followers. There’s a lot of other data needed to make a complete picture. I said the same thing about a week ago in a blog posting that I thought you might like to read: http://www.jackmyers.com/commentary/ARF/97963394.html

  • http://www.skypulsemedia.com Howie at Sky Pulse Media

    I agree 100% and I disagree 100%. If that is possible. I have flown southwest. I know what I am getting. When I can pay full price because my company pays for ut where I can show up and take any flight now hassles its awesome. If its a short flight vs across the country and they are equal or lower in price to the top tier airlines I fly them. I already have a great view of the company. I will not pay more to fly them. So no matter how they engage with me online will not mean anything because I already know what I am getting. But if they do things that add to the Southwest Rewards program via Twitter etc I will interact via Social Media. Otherwise I don’t benefit from it (in my opinion)

    But for someone who has never flown them Social Media could be a deciding factor to throw them into the mix. And yes the casual flier will make their decision later on. You also can not measure good will or track it. I might not fly for 2 years but tell others I like South West helping to throw them into the mix. But if I am not going to fly for two years I have zero reason to interact with them online or via social media (unless they run sweepstakes).

    So its very complicated. Social Media lacks scale immensely (only 7-20mil people world wide use twitter every day, though they tend to be intelligent and higher incomes). Social Media actually has much more scale for small businesses than big business.

  • http://www.synthesio.com Michelle C

    ROI can’t be measured on social media. We can provide the stats and the sentiment analysis and the valuation to provide an idea of the ROI from social media, but it is only a part of the puzzle. Online monitoring has to be combined with other business intelligence in order for a company to get a (more) complete view of their investment. (More) because even though there is an intangible return, social media is a great place to start to find out what people are saying about the upcoming event, during it, and afterwards.
    Looking at both mainstream media and social media, as well, is a great way of comparing the amount of buzz generated and an idea of the ROI.

  • http://squarejawmedia.com Brian McDonald

    Establishing a baseline for tracking may be the single most important part of measuring. In order to measure growth we always need to know where we started. Social media tracking has the same challenges that TV, radio, print and other media face. You can measure how many people watched or viewed an ad but how many of those people then went and bought your product after viewing? Benchmarking is crucial to establish that measure.

  • Tom Webster

    Howie: love your comment, but does your 100% agreement cancel out your 100% disagreement, leaving you neutral? Or, and this is my preference, did my post inspire 200% more feeling? Awesome.

    Brian – just so. There isn’t enough baseline measurement in social media – especially, as I noted here, of the offline variety. Pre- and Post- campaign or engagement measures work just fine, have for years. Nothing new here.

    Lynne – loved your post. I for one would love to see more cross-pollination between the ARF and some of the “practitioners” of social media strategy out there.

  • http://www.scanblog.com Cyrille Chaudoit (Scanblog)

    I agree with both of you Tom and Michelle. Talking about ROI means you can track every single piece of your communication strategy, from input to sales.
    Measuring the ROI of the social media part would mean you can isolate it from every kind of other “buzz” leverage.
    On the other hand, creating word-of-mouth is about spreading an idea you launched but you can’t control. How can you measure its real impact ? Especially if you don’t know the ways it took ?
    And last but not least, if your client still want to measure it, please ask the CMO to pay a post-test. That will probably be more expensive than the campaign itself and wait for his reaction ;)

  • http://blog.sysomos.com 40deuce

    This is an excellent post Tom.
    While I work in the social media monitoring and analytics space it’s sometimes frustrating to hear people say that there is no real ROI in social media. There is, it’s just not as quick and simple as people want it to be.
    Your example of SWA is a perfect example. Social media allows people to build connections with companies and brands. While it won’t always turn into the immediate sale, that relationship will influence the consumer when they are ready to make the purchase. In the mean time though, the key is to keep that connection so that the consumer is thinking of you (and hopefully thinking positively about you).
    Social media is not a quick fix, it’s a continuous process with no real beginning or end. Campaigns via social media do, but campaigns are only part of the whole social media experience. The ROI is there, it’s just a matter of when it shows up. If companies are doing a good job of establishing and maintaining connections with their public, the positive ROI will eventually show itself.
    Also, your advice on starting with a base measure to compare your social media efforts to is a great idea because it shows where you were before social media to where you get to using it.

    Cheers,

    Sheldon, community manager for Sysomos

  • http://www.evolve24.com David

    tom — As a person with a big background in primary market research, this seems obvious. The online campaigns (and offline campaigns as well, if there is one) must build awareness first; then attitudes, perceptions, and understanding; and these ideally lead to an action — such as attending a game at a minor league ballpark. This requires broader measurement as you are planning. Do you need to go even farther, and measure among people who have not made the trip to a ballpark? Too much social media measurement is measuring low level activities, because they are east to measure, and are not measuring the big scale business outcomes.

  • Tom Webster

    David: As I said, nothing new here :) But the traffic that this post has gotten suggests that there are a lot of market research AND social media practitioners out there that could stand to go out for a beer together. Consider this the first round.

  • http://blog.blueskyfactory.com DJ Waldow

    Tom –

    You had me at …

    “Parsing out the impact of cross-channel media on purchase behavior is a bit of rocket surgery…”

    Doesn’t mean we won’t keep trying!

    DJ Waldow
    Director of Community, Blue Sky Factory
    @djwaldow

  • http://www.robinmaiden.com Robin Maiden

    Tom,

    Great post and discussion.

    First beer is on me… Look forward to the discussion.

    Robin Maiden

  • Tom Webster

    Let’s make that a beer and a steak at Craftsteak, Robin :)

  • http://www.thearf.org Lynne d Johnson

    Tom – We at the ARF are definitely interested in having more social media “practioners” be a part of the conversation on whatever we talk about social with market research and advertisers. And I’m also interested in having a beer with you guys, just not the steak. :-)

  • http://www.twitter.com/smczarina Veronika

    A big challenge is getting those research budgets at the beginning. It’s often a catch -22; brands need to justify putting more money in SM by using money to help justify the costs. In 50k, 200k, 400k national budget, it’s hard to find that extra work to do all the pre and post research and do the analysis.

  • http://www.sueannereed.com Sue Anne Reed

    I read this post yesterday and then was watching some Mad Men and thinking about the Heineken episode. This all goes back to building social media into your larger marketing mix. It can’t be everything and, especially for B2C companies, it can’t be nothing.

    I think the Old Spice campaign is going to be an interesting example. Huge viral and social media buzz. But, will they see a spike in sales of social media products? If they don’t, then the buzz was a waste of money for everyone except for the actor in the commercials.

  • http://www.jayninelessons.com Jerry Nihen

    Even though this post is a few months old, this is a very timely and well written article on social ROI.

    “This isn’t to say that you shouldn’t be monitoring or mining this data online; it’s an essential input to the process.”

    This sentence in particular is my favorite phrase of the entire article. I feel that a lot of people spend too much time on two ends of the spectrum, either saying “you can’t measure social ROI, it’s all about relationships,” or, “You have to be able to measure every aspect of social ROI, every tweet, blog, “like” etc.”

    You make the very valid point that social media ROI must be measure in much more than just the average “click-per-tweet” type formulas. These types of measurements do have a place, but there is much more involved than just simple “x/y=z” ROI terms. Very good information.

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