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Buzz Quotient: Measuring The Social Media ROI

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					                 Buzz Quotient: Measuring The Social Media ROI

Organizations are experimenting with Social Media Platforms and plans. However, after the initial
experimentation, one has to quickly evaluate Social Media’s contribution to business, performance
vis-a-vis other channels and establish best practices guidelines.

Social Media is not a sales channel and that makes measuring the impact on bottom line
challenging. Social Media presence helps improve the traffic, conversions and revenue on other
sales channels and also supports marketing, branding and CRM initiatives. The tangible and
intangible contribution of Social Media to Marketing goals has to quantified and factored ito
measure the true ROI on Social Media investments.

Here is the 5 step process I suggest to measure the Impact of Social Media and ROI on the Social
Media Spend.

Set Social Media Expectations and Goals

Can social media drive sales? Is there a correlation between followers on Facebook and traffic to
the website? Can Twitter help sell overstocked items? These are few burning questions for the top
management and the marketing teams. The first step in the process of measuring the ROI is
setting the Social Media Expectations and Goals. Define your objective and expectation from the
Social Media. It is also important to define program Success Matrix at this stage. Starting with a
clear mandate is a good idea.

For example, if you want to build brand awareness, use Social media as a CRM tool and boost
online sales you could start with goals statement that reads ” The Social Media campaign will help
build a community of customers and potential customers; help understand customer’s need and
pain areas better, endorse Brand Positioning, enable crowd-source innovation and augment online
online sales. In the first 6 months we will build critical membership/ readership across Blogs,
Facebook, Twitter, YourTube, Forums, Question and Answer websites. In 6th thru 9th month we
will evaluate these platforms on the following parameters: Reach, Engagement, Revenue,
Sentiments, Branding and investment”

Create the Social and Business data correlation framework



To record measure and improve the Social Media campaign you would need to mash Social data
with data from other channels. Mashing Social Web and business data requires a robust analytics
and reporting system. You may need to tweak your present analytics tool to accommodate Social
data. For example, your existing analytics may not support mentions on a platform and the
associate sentiments.

Data co-relation will help justify the investment on Social media. For example, if you want to
measure the impact of social media on online sales you would need to

•   Track Traffic from social platforms through the buying process. Sale may not happen in the
    first visit. (Cookie?)
•   Import this data into your analytics and reporting tool.
•   Calculate the lifetime value of a customer
•   Compare it others channels: search, affiliate etc.
If you want to measure the impact on Brand awareness, you would need to track

•   Brand Mentions in discussions across all platforms ( social and otherwise)
•   Sentiments of the conversation (Positive, Neutral, Negative)
•   Contribution of Social traffic to total Traffic
•   Impact on Direct Traffic
•   It’s important to map each goal with relevant matrices.

Identify Social Media Data points and Sentiment Analysis Framework

The next step is identifying data points and data sources for the Social Media campaign. You need
to measure and record social media information like # followers, # mentions ( with links and
without links), # comments, competition’s data and your share of conversation.

Manual monitoring and recording of this data is tedious and impractical. However, a number of
tools are now available to monitor, measure and record this information. However, you could start
with the free ones like:

•   Google Alerts
•   Twitter Search
•   TweetDeck
•   Seesmic
•   Technorati

Once you have the data you need to analyze the sentiments associated with the comments and
mentions. Sentiment analysis involves filtering the positive ( Good service, Helpful Representative
etc.) and negative mentions ( Service Sucks, Non Responsive etc) and assigning a weightage that
reflects the communication intensity.

Adding weightage helps rationalize Social Media and Business data to a common scale. Adding
weightage could be a bit tricky and the process evolves over a period of time.

Account for Branding, PR and Opportunity.

Social Platforms help Brands and Business get closer to the consumers and create recall, loyalty
and community. Hence it id important to factor in the intangible impact of the social media
campaign.

If you are running a print/ online campaign say on Time Magazine, Wall Street Journal or The
Economic Times what is your cost per reader? And how does it compare if you reach out to their
communities on Facebook Time Magazine, Wall Street Journal, The Economic times? Account for
free visibility and reach.

How does the cost of running a PPC campaign on Google compare with the cost of running
targeted paid ads on Facebook?

Over a period of time you would need to develop a formula that quantifies each interaction/
mention and follower on Social Media Platforms and merge this information with business
analytics.

Merging Social data with Web and Business data will give you an insight into the opportunity.
Analyze and Report

The last step in the process is collating the data and putting it in a format that gives perspective
and helps make decisions. Compare Quality of visibility/ leads, volume of visibility/ leads across
campaigns in a report that’s easy to put together and simple to understand.

I recommend a report that answers business critical questions like:

1.   Is there a difference between a lead from Social Platform and from other channels on
     parameters like:

•    Time spent on website
•    Lifetime value of customer
•    Revenue per customer
•    Brand Awareness
•    Brand Loyalty

2.   How does the cost to reach/ acquire customers compare across channels?
3.   Is there a difference in Brand Experience between a lead from Social Platform and from other
     channels?
4.   Which Social Media Platform works best for your brand?
5.   Is there a seasonality/ Day part across platforms?

Social Buzz is a function of visibility (size of the community) and associated sentiments across
platforms. The 5 steps mentioned in this post would help you track and continually improve your
Social Media program.

About the Author

Bhaskar Thakur is Entrepreneur, Digital Business and Social Media Evangelist. A seasoned
marketer and entrepreneur with over 13 years experience, he is founder of
www.worldwithoutme.com, www.initiative31.com. Bhaskar is among the first wave of Internet
Marketers in India and specializes in creating Strategies, solutions and slatforms for Social Web.
He enjoys mentoring businesses and coaching the young.

				
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