Social Media ROI Part 1: Framework

Social Media ROI Framework

Here is a simple, five-step framework for developing a social media ROI measurement program.  Remember that not all social media initiatives will result in short-term ROI generation. It is also important to comprehend the results of programs that result in non-financial value or impact. (For a quick refresher on the difference between value and ROI read this).  Holistic measurement programs should be designed to track and measure non-financial impact as well as ROI.

1. Set measurable objectives aligned with business outcomes

Failure to begin with measurable objectives is probably the most common impediment to proper social media measurement.  A couple of award seasons ago I was a judge for a major PR campaign competition and was appalled by the low percentage of programs that actually contained measurable objectives – about 20% or so.  Your objectives should be aligned with one or more desired business outcomes.  Think through all the ways in which the social business effort will contribute toward driving the overall business forward.  Make sure the alignment is obvious and understood by all involved in program approval.

2. Link to and understand the requisite business process

In order to demonstrate ROI in social media it is necessary to link the results seen in social media with the relevant business processes they are addressing.  Social programs to date generally relate to one or more of the following business processes:

Business Process	Description
CRM	Crowd-sourced help, info, recommendations, customer relationships
Research	Competitive intelligence, insights, voice-of-customer, trends, feedback, reputation assessment, influencers
Marketing & Sales	Ideation, product promotion, hyper-local marketing, lead generation and closure, fund raising, testing, brand attributes
Communication/PR/IR	Stakeholder communication (internal and external)
Innovation/Product Development	Crowd-sourced ideas, problem/opportunity identification, collaboration

For example, in a B2B company, you might try to link social media efforts with the lead generation and closure process.

For a program aimed at employee engagement, you might link social media efforts to the employee recruitment and retention business process.  For an e-Commerce company you might be able to directly link to the sales process through unique URLs or click-tracking technologies.

Understanding which business processes are impacted by social networks, and how, is fundamental to understanding ROI.

3. Select communications model, research approach and key metrics

In addition to understanding the business process impacted by social programs, it is important to have a communications model to assess non-financial impact.  The accepted Outputs – Outtakes – Outcomes communication model is difficult and confusing for many to understand and apply.  Here is an alternative communication model that is somewhat more intuitive and in tune with social media measurement.

• Exposure – To what degree have we created exposure to content and message?
• Engagement – Who is interacting/engaging with our content?  How and where?
• Influence – The degree to which exposure and engagement have influenced perceptions and attitudes of the target audience.
• Action – As a result of the social media effort, what actions if any has the target taken?”

The metrics listed are a starting point.  You will note these metrics come from all three “zones of measurement” – web analytics, digital content analysis and primary audience research.

Possible ROI research approaches include:

• Correlation modeling and econometrics
• Staff cost reduction and/or cost elimination tracking
• Direct linkage via unique URLs and click-tracking
• Exposed/Not-exposed primary audience research
• Integrated cross-platform research – web analytics, content analysis, click tracking, primary research.

4. Gather and analyze data

Gather longitudinal data for the requisite business process and communications model metrics.  When attempting to show statistical correlations, the amount of data you include is important because it impacts the confidence level of the results.  Also, what metrics you attempt to correlate and how is crucial.  For example, we might try to correlate social media brand engagement and audience influence with metrics like likelihood to recommend to a friend, likelihood to seriously consider the product or likelihood to purchase the product in the next X months.  Select the metrics that are most applicable to the business process you are attempting to drive.

5. Calculate ROI and report results

We started with measurable objectives, aligned them with requisite business processes, determined our research model and approach and have gathered the data.  Now we can calculate ROI and describe the value of the social business initiative.  Results for key program metrics should be captured on a dashboard that may be shared with all program stakeholders are a regular basis.

(Note: Part two of this post will cover specific research approaches to determining social media ROI in more detail)

You Might Be a PR/Social Media Redneck If…

(With tongue firmly in cheek and apologies to Jeff Foxworthy)

• …Getting that big hit in a daily newspaper or national magazine is your primary PR objective

While traditional media relations will continue to play a role in public relations programming, its importance and impact is shrinking at an alarming rate with each new publishing industry announcement of shuttered of operations, three day a week printing schedules and Chapter 11 filings.  Over 120 newspapers have folded entirely (CNN article here).  Anorexic-thin magazines appear starved for advertising.  To compound the issue, according to the latest Edelman Trust Barometer, only 44% of consumers trust what they read in magazines and 34% trust what they read in newspapers.  Shrinking footprint combined with shrinking credibility does not portend well for traditional print media.

The best PR programs today take a broad, holistic view of the various avenues to engage with customers and prospects – traditional media, social media, community involvement, grassroots events – and attempt to do so in ways the customer/prospect respects and prefers.

• …Your measurement program key metrics include number of hits, impressions and ad values/AVEs

It is fine to include a couple of volume-oriented metrics like number of unique articles or net positive OTS in your program, but these sorts of metrics do nothing to capture the value created by your program.  In order to capture value, we must understand the audience effects or outcomes of public relations programming.  Emphasis on output metrics like these may also be a reflection of a program oriented toward traditional media.  Traditional media metrics do not translate well to social media where the name of the game is engagement and not (just) eyeballs.   Double redneck points if you are using multipliers on impressions and/or AVEs to assign financial value to media hits.

• …The big social media question you/your department have been asked to answer is “Should our CEO start a blog?”

The problem is this is almost always the wrong question at the time it is asked.  There are larger, more contextual, ones to ask first.  When a company begins to think about using social media, a CEO blog is often the first tactic considered.  The prospective blog can potentially become a solution in search of a problem.

Take a step back and put the prospective blog in context by thinking through the bigger questions first.  What key concepts and terms are strategically important to the company?  Can we develop a thought leadership platform designed to enhance relevance, credibility and authority in key areas?  Do we have anything important to add to the conversation?  Who from our company should be the voice of the company in key strategic areas?  Does this individual currently have authority in this area?  Is a blog a good strategy/tactic to deploy?

• …Your communications program attempts to control more than contribute

While much advancement in communications theory has occurred since the Transmission and Direct Injection models of the 1950s, the mindset and behavior of many PR practitioners seems trapped in this ‘message as a drug’ mentality.  We want to control the message, manage our relationships and otherwise wield direct influence over our stakeholders.  This command and control mindset is truly out of phase with social media/market dynamics today.  What is needed is a shift away from control toward contribution.  How can you contribute to the conversation?  What content can you provide the community would find of value?  How can we give people a reason to talk about our brand?

As an industry we must become more comfortable participating rather than orchestrating.

• …You are thinking vertically and tops-down rather than horizontally and non-hierarchical

Many comments on social media posts immediately speak to the wonders of synchronous communication – creating a dialogue rather than a monologue.  While synchronous communication has great value in gathering feedback and creating some level of dialogue, it remains a form of vertical communication.  In social media, however, the world is flat or horizontal.  Every piece of research I have seen suggests consumers value the opinions of other consumers, people ‘just like them’, more than they do companies or media pundits.  The greater value in social media is peer-to-peer horizontal communication, broadly referred to as WOM.  Taking a spin on the old global/local saying, the PR profession needs to ‘act vertically but think horizontally’.

Thanks for reading, Don B

Next Post: Are You Smarter Than A Fifth Grader About Social Media Measurement?

Five Social Media & PR Measurement Trends to Watch in 2009

As we launch into a year with perhaps as much uncertainty, on multiple levels, as most of us have known, I offer my fearless predictions for 2009.  The single most interesting dynamic this year in my view is the tension between an increasing need for accountability and tight budgets.   

1. Social Media Dominates Measurement Conversation

In June of 2008 I did a quick blog analysis to understand the volume of posts about PR/public relations measurement compared to social media measurement.  About 80% of all posts were specific to social media measurement.  I repeated the analysis for December 2008 and got the same result.   Social media measurement is dominating the conversation.  It is interesting to note the social media measurement online conversation is not being driven (with a couple of notable exceptions) by the firms and individuals associated with traditional media content analysis.  They seem to be followers and not leaders.  New players and voices are emerging, particularly from the web analytics world.

2. Quest for Standards
For many in public relations measurement the Holy Grail is a single, powerful metric of success. A standard metric everyone generally agrees with and that is applied consistently would enable lower costs leading to greater measurement participation, and allow agencies and companies to compete on actual results, i.e. audience effects, not on cutesy proprietary metrics and algorithms.  Or so the argument goes.  In the other camp are the ‘snowflake measurement’ disciples who say each public relations program and set of objectives is unique and therefore requires unique measurement approaches – standardization doesn’t apply to snowflakes.  Driven by a desire to find ‘standard’ social media metrics, look for the standardization argument to be a hot topic again in ’09.

3. Engagement Will Be The Hot Social Media Metric
Many have said Web 2.0 is about ‘engagement and not eyeballs’.  Indeed, it looks like Engagement will be the metric of the moment in 2009.   While everyone might agree, at a macro level, Engagement is about the engagement between individuals and brands, there is almost no agreement on what Engagement really means, particularly in the online world.  There are many different views at different levels of abstraction:

• BusinessWeek has a Reader Engagement Index they calculate as a comments to posts ratio.  An Engagement Index of 5 would indicate 5 comments per post
• Forrester Research defines the engagement between individuals and brands in terms of the four I’s: Involvement, Interaction, Intimacy, Influence
• And well-known web analytics guru Eric T. Peterson has developed an eight-term equation for Engagement that includes clicks, recency, duration, brand, feedback, interaction, loyalty and subscriptions.

Look for many other definitions and points of view on Engagement in 2009.   Measuring Community and Velocity may also be hot social media metrics.

4. Cross-Platform/Domain Measurement Challenges
How do you measure the influence on someone who has read your blog, posted a comment, sent a tweet to 35 followers, visited another site, referred to your blog with a trackback, texted four friends about your post, two of whom visited your blog as well?   Most measurement approaches and tools today are tied to specific platforms and not people.  As communication increasingly becomes horizontal/ peer-to-peer – online and offline – our ability to measure discrete programs becomes exponentially more difficult.  It would seem a greater emphasis on holistic approaches that are audience-centric might be a partial solution.  Look for measurement firms to begin to address this challenge in 2009.

5. A Battle of Good (accountability) versus Evil (economy)
So far, the spirit of experimentation in social media has provided a sort of ‘get out of jail free’ card with respect to having to demonstrate the value of digital and social media programs and initiatives.  It looks like all that could change in 2009 primarily driven by the economic climate.  2009 will be the year when the pendulum swings from experimentation to accountability.  2009 will raise the bar on all of use to demonstrate how social media and other PR programs are helping to drive desired business outcomes. Acting against this pendulum swing are the Evils of flat or reduced 2009 budgets.  It will be easy for many people facing budget pressures to reduce or eliminate measurement.  But you do this at the peril of credible accountability.  What do you think will win in 2009 – Good or Evil?

Announcing Acumentics Research!

Yesterday, I launched my new company, Acumentics Research, a social media and public relations research and measurement consultancy.  The firm will focus on helping clients develop cost-effective research and evaluation programs designed to quantify the results and return on investment of social media and public relations.  ‘Acumentics’ is a hybrid of acumen and analytics.

Acumentics Research offers a range of services from measurement consulting to full measurement program outsourcing.  Acumentics has a flexible model, and can work with organizations to add value in the ways that make the most sense for their current skills, available staff time, budget, and research and measurement expertise.

In primary research, Acumentics will specialize in cost-effective quantitative research designed to support public relations and social media return on investment studies, employee communications, social media and ‘offline’ brand awareness and tracking, consumer attitudes and opinions, media-oriented studies, thought leadership and corporate reputation research.

For a limited time, Acumentics is offering an ROI Roadmap designed to create a customized framework for measuring return on investment, and a free 30-day analysis of social media conversation.

Thanks for your support.  -Don B