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How Much Does a House Cost?

8 Nov

I don’t come from the “there are no dumb questions” school.  For example, in an academic environment, I would define a ‘dumb question’ as one in which the answer should be easily known had the student read the assignment or attended the previous class.  There are a lot of dumb questions asked all the time and social media gets more than its share of these.  Many of them are specific to social media measurement/ROI.  For example:

  • Which has higher ROI, Twitter or Facebook?
  • What ROI should I expect from Twitter?
  • How do I measure the ROI of social media?

The flip answer to all these questions is, it depends.  All results are contextual.  Results are also specific.  While industry averages may be interesting, averages mask any real meaning for an individual brand or company.  They result in ‘one size fits none’ thinking.  Let’s go back to our house analogy and bring this to life.  The cost of a house depends on several factors:

  • Where is the house located?  You’ll need to know the city and the specific neighborhood.  You may also want to know which block the house is on within a given neighborhood.
  • How large is the house in terms of square feet?
  • How large is the lot?
  • Is the house new or previously owned?
  • In what condition is the house?
  • What is the level of finish-out?  For example, granite versus tile countertops.  High-end appliances or mid-range?
  • What are the desirable or unique features of the house?

In social media measurement we have our own list of questions to ask before attempting to answer generally stated questions about measurement and ROI:

  • What brand/company are we speaking about?  The answers for a well-established cult brand will be very different from those of a less well-established brand.  Answers for eCommerce companies will vary from those of B2B companies.  Answers will also vary by industry segment.
  • How long has the brand/company been participating in social networks?
  • How much investment in social media marketing – time and money – has the brand/company made?  What has been the level of effort?
  • What other communications channels (e.g. advertising, direct, search, public relations) are being utilized in parallel with social marketing?
  • What is our point of view on the role of social media in the marketing mix?  For example, is the role of social media primarily to drive exposure to content or is the program or initiative designed to drive conversion events through social channels?
  • What were/are the specific objectives of the program or initiative?

This last question is especially important because measurement is fundamentally about assessing performance against stated objectives.  When someone asks you how to measure something in social media your first response should always be this question – What were the specific objectives of the program or initiative?

The question of when to expect a return on social media efforts is also an interesting one.  Brands often expect an immediate ROI on social media efforts.  Social media marketing is a process not an event.  Too often people forget about the ‘I’ aspect of ROI – you usually have to make an investment in resources and time before you can drive a return.  It is wise to listen to social conversations before engaging, and build your presence and trust before trying to drive conversion events.  Listen and learn and then convert.  I would argue the majority of social media efforts today are likely in the investment phase and not the return phase.  It is somewhat unfair in these cases for the social media effort to be held to an ROI standard in the short-term.  Measuring impact rather than ROI is advised.  Perhaps we can add another question to our list of dumb social media ROI questions – ‘What ROI should we expect in the first year of our social media initiative?’

If you are one of the prescient humans who has a crystal ball that enables you to answer the ‘how much does a house cost’ question, I have another question for you, ‘how long is a string?’

You Coming to BlogWorld? Let’s Talk Social Media ROI.

13 Oct

I hope to see many of you at BlogWorld later this week.  It will be great to finally meet the many online friends I have who will be speaking or attending.  Please make a point to DM me (@Donbart) or email me (don.bartholomew@fleishman.com) if you have a few minutes to meet and talk at the show.

On Friday October 15, as part of the Social Media Business Summit, I will be on a panel speaking about social media ROI with David Alston of Radian6, Connie Bensen of Alterian and Ken Burbary of Ernst & Young.  Ken has the formidable task of being our moderator.  Here are the specifics:

Panel: Social Media & ROI

Date: Friday October 15

Time: 2:45 – 3:45

Room: Islander V3

If you cannot attend the show, you can follow along with the hashtag #BWE10.  There will probably be a few hundred folks live-tweeting the event, including me.

Safe travels.  -Don B

Social Media ROI Twitterchat

1 Sep

Yesterday I was the guest on Shonali Burke’s #measurepr twitterchat.  The subject was Social Media ROI.  The conversation was lively and engaging.  I found it exciting and stimulating, and appreciate Shonali letting me share with all of you.  Shonali did a great wrap-up of the session on her Waxing Unlyrical blog.  You can read it here. You can also download a transcript of the chat here:  #measurepr transcript 8.31

Shonali was kind enough to invite me back for another round.  So please join us for Social Media ROI Round II.  The date is September 14.  The time is 12:00 – 1:00PM (Eastern).  DM Shonali (@Shonali) or shoot her an email if you have a question you would like us to address.  You can sign-up for the chat here, or just join us on the 14th. using #measurepr.  Hope you can join us!  – @Donbart

Don’t Let the Tool Tail Wag the Measurement Dog

19 Jul

Social media listening and measurement tools are sexy.  Well, at least to those of us in research and measurement – it’s all relative right?  In the last three years or so there has been an explosion of social media tool vendors and platform choices.  Tools are sexy and important, but in the grand scheme of things are being overemphasized to some degree.  We are letting tools decide what we can measure without giving sufficient thought to what we should measure.  We are letting the tool tail wag the measurement dog.

There are several steps and decisions that should be addressed prior to selecting a tool or suite of tools.  Consider this diagram as a starting point to help you think through these interim considerations and decisions:

OBJECTIVES

Proper social media objectives should be measurable (indicate change in metric of interest and timeframe) and aligned with desired organizational outcomes.  Understanding the social media objectives will suggest broad parameters the measurement program, and ultimately the tool decision, must operate within.  For example, geographic coverage requirements, type of content to be considered and on-platform engagement capability may all be strongly suggested based on a review of social media objectives.

PROCESS

In addition to comprehending organizational or business outcomes, it is essential to understand the business process the social media program will address or drive.  If the program is marketing oriented, the sales funnel process (Awareness/Consideration/Preference/Sales/Loyalty) may be most appropriate.  For a brand-building campaign, the brand pyramid (Presence/Relevance/Performance/Advantage/Bonding) is what you want to measure your program impact against.  Other business processes that are commonly addressed by social media programs include customer service and support, CRM, corporate reputation and lead generation.

METRICS

Understanding the requisite business process the social media program is driving is crucial because each business process drives specific metrics.  For example, the sales funnel drives a specific metrics set:  percentage of unaided or aided awareness; percentage of the target audience who would consider the product/company; percentage who prefer the product/company; incremental sales revenues; percentage who would purchase the product again number or the number/amount of repeat purchases.  For B2B companies, the lead generation process would drive a different set of metrics: number of incoming leads; percentage/number of qualified leads; lead conversion rate; sales revenues generated.  In addition to the business process metric sets, there are other metrics areas like Exposure and Engagement we will want to address.  Reach/opportunities to see, share of positive discussion, comments/post ratio, number of @ mentions and RTs per 1000 followers are examples of ‘standard’ metrics that might be applicable for many social media programs.

Understanding how the social media program drives a specific business process is also important to our ability to describe the impact or, in some cases, return on investment the program has created.

DATA SETS

Each metric has data requirements, usually two pieces of data per metric – a numerator and a denominator.  Examine the set of metrics you have defined for your social media program.  Catalog all the specific pieces of data you need to compute the various metrics.  For example, the data needed to compute the basic sales funnel metrics and some ‘standard’ metrics might include:

  • Number of individuals in the target audience
  • Number of survey respondents
  • Number of respondents ‘aware’ of the product/company
  • Number of respondents who would consider/seriously consider purchasing the product/doing business with the company
  • Number of respondents purchasing the product
  • Amount of sales revenue directly attributable to the program
  • Number of purchasers who purchased again
  • Total branded mentions
  • Volume of positive and negative mentions
  • Number of posts
  • Number of comments
  • Number of RTs and @ mentions
  • Number of followers

TOOLS

Armed with an understanding of all the data needed to calculate the metrics required to measure the social media program, you will be able to assess which tools or classes of tools best deliver the data you need.  Pick the best three to five tools for further evaluation.  You most likely will find no one tool can deliver the complete data set you need.  It is common to need two or more tools, e.g. web analytics package and social content analysis platform, in order to fully meet data requirements.  Budgetary constraints may also limit your ability to capture the entire data set required.

By addressing the interim steps leading up to tool selection, you will be able to make a more informed tool decision.  You also will have a much better chance of measuring what you should measure rather than settling for what you can measure.  No tool before its time.  Let the big dogs run.

The Digitization of Research and Measurement

12 May

This post first appeared as an agency guest post on Jason Fall’s Social Media Explorer blog.  You can see it here.


The field of public relations has undergone two major revolutions in the past 15 years or so.  The advent of the Internet represents the first revolution.  This revolution primarily impacted the way content was created, distributed and consumed.  It also fundamentally changed the nature of communication – remember email became the first killer app of the Internet revolution.  The second revolution is social networks.  Again content creation was impacted, led by consumer generated content in multiple forms.  Perhaps more importantly, peer-to-peer communication between consumers, and two-way communication between consumers and brands/companies, have been enabled and are having a profound impact on the way companies are organized and behave.  The worlds of marketing and public relations have made an analog to digital conversion.  And with it, we are in the midst of the digitization research and measurement.

New Models, New Metrics

Communication models are a linear representation of how a communication process works and are important in providing a framework for evaluation and measurement.   The Outputs – Outtakes – Outcomes communication model often used in public relations today has two primary deficiencies in the era of digitization and social networks – clarity and relevance. 

  • Clarity: The model is difficult for many to understand and apply.  Public relations practitioners regularly get Outputs confused with Outtakes or Outcomes.  Outtakes are not often used in the U.S. – they seem much more prevalent in Europe.  The overall taxonomy can be confusing and is defined in different ways by different practitioners or organizations.  Further compounding the confusion is the fact audiences we present our results to rarely understand the terms and have trouble relating to them.  In short, the terms are too much ‘inside baseball’.
  • Relevance: The model was developed when communication was media-centric.  Digitization, consumer-generated content and social networks have shifted communication from a media-centric world to a content-centric world.  How receivers of communication engage and are influenced by content has fundamentally changed.

What is needed is a metrics taxonomy that is easier to explain, understand and apply.  Ideally one that is applicable for traditional and social media.  Here is the model we apply at Fleishman Hillard.

With the new model comes new metrics primarily driven by social media/networks.  Exposure  includes traditional metrics like Impressions and Message Delivery, and digital metrics like Search Rank, Twitter Reach and Average Daily Visitors.  Engagement includes traditional metrics like Readership, but adds new metrics like Subscriptions, Repeat Visitors and Follower Mention %.  Influence in the model refers to influence of the target audience, not who has influence in social networks.  Influence metrics range from increases in Brand Consideration to changes in attitudes and opinions to changes in online click behavior.  Action metrics can range from event attendance to voting for/against legislation to buying a product.

New Data, New Places

Public relations research and measurement has historically been driven by content analysis.  As content increasingly became available in digital form, the techniques of research and measurement didn’t change so much as the way content was aggregated and delivered for analysis.  Then web-based platforms became available from a variety of vendors to digitize and automate content analysis while the metrics being measured – article counts, impressions, message uptake and sentiment for example – basically remained constant with previous, more manual, methods.  Today, the digitization of research and measurement has broadened from this predominately singular focus to include data and interactions from three distinct regions or zones of research and measurement as shown in the figure below.

As company websites, e-Commerce sites and other forms of ‘owned’ media proliferated, web analytics software provided an explosion of data and new metrics like unique visitors, page views, click through rates, duration, referring sites and conversions become widely used and reported.  We became over-served with data and underserved with insight.

The exponential rise in popularity of social networks in the last five years raised the bar again and presented new challenges in digital research and measurement.  Now we were faced with measuring conversations and not just clicks.  Measuring engagement became more important than measuring eyeballs.  The frontier in social media measurement is evolving toward measuring both the conversations and behavior patterns occurring within social networks, and understanding and connecting the underlying influences and motivations for the online behavior.

The third area of interest is in all the real-world, offline interactions and transactions. Scan and other digital sales data is important to understanding, tracking and connecting online and offline behavior and actions.   Connecting mobile transactions, online and offline behavior and WOM is a significant challenge.

Although we have attempted to define three distinct ‘zones’ of digital research and measurement necessary to address the full spectrum of social media and marketing impact, a robust measurement strategy should take a holistic, integrated approach using methodologies, tools, data and metrics from all three zones.  The goal is to be able to track the behavior, interactions and transactions of individuals across all three zones, across multiple platforms and physical locations, understanding how online behavior impacts offline behavior and vice-versa.

New Scope, New Integration

Today at Fleishman Hillard, we recognize the very definition of public relations is rapidly evolving to encompass a much broader and more integrated view of communications and how we connect, engage and build relationships with consumers and other stakeholders on behalf of our clients.  Digitization in all its forms has driven and accelerated this important change.  While public relations has traditionally been oriented toward ‘earned media’ – gaining placements of client stories in print and broadcast media based on the strength of the story and quality of the pitch – today’s content-driven world demands much more.  The scope now must include all the consumer touch points available in our increasingly digital world.  We capture this new scope and integration in a model we refer to as PESO – Paid/Earned/Shared/Owned.  Our PESO model predates the similar Forrester model (Paid/Earned/Owned) and is different in an important way.  We created two categories, Earned and Shared, where the other model has one – Earned.  We believe this better comprehends strategies like blogger outreach and other proactive efforts undertaken by practitioners as ’Earned’,  distinct from efforts that may be passive or reactive.  Here is how we define the elements of our model:

Paid – refers to all forms of paid content that exists on third-party channels or venues.  This includes banner or display advertisements, pay-per-click programs, sponsorships and advertorials.

Earned – includes traditional media outreach as well as blogger relations/outreach where we attempt to influence and encourage third-party content providers to write about our clients and their products and services.

Shared – refers to social networks and technologies controlled by consumers along with online and offline WOM

Owned – includes all websites and web properties controlled by a company or brand including company or product websites, micro-sites, blogs, Facebook pages and Twitter channels.

The enhanced scope and integration represented by the PESO model drives a corresponding broadening and need for integration in digital research and measurement.  One can easily find themselves attempting to measure a highly integrated program that includes the awareness created with paid media, the relevance and information delivered via owned, the credibility delivered by earned media and measuring the conversations and interactions occurring in shared media.  Just from a metrics perspective, the PESO model requires a significant broadening in thinking as shown in the matrix below.

Digitization has changed what we need to research and measure, where we find data and how we perform analysis.  The future will bring more data, better tools and improved methodologies.  Sifting insights from the mounds of data will remain a major challenge.  The intersection of marketing, privacy concerns and research must be navigated.  The constant in all the change brought by digitization is who – human analysts and research.  Discovery and insight, like it was 15 years ago, remains fundamentally a human process.  It remains the analog constant in a world of digitization.

Measure the Puzzle Not the Pieces

1 May

A while back, I remember someone posting a question to a Linked-In discussion group along the lines of, ‘I just got my client a hit in USA Today.  How much is that worth?’.   More recently, ADWEEK ran an article entitled, Value of a Fan on Facebook: $3.60, citing an attempt by Vitrue to essentially assign a media value to a Facebook Fan.  (Sidebar: Is a Liker worth as much as a Fan?).  Setting aside an argument of the value attribution methodology used by Vitrue (I’m not a fan, or a liker), the fundamental issue I have with each example is the same, they are trying to measure the pieces and not the puzzle.

A media hit, a tweet, gaining a Fan/Liker, or obtaining a Follower are all pieces to a larger puzzle called a social media/business campaign, initiative, effort or program.   For simplicity, let’s refer to them as programs henceforth.  Programs have, or should have, objectives.  Done correctly, these objectives are measurable.  Good measurement practice suggests you assess performance against stated objectives.  Sure, it is also important to assess performance of program strategies and tactics – primarily as a diagnostic – but ultimately we must measure performance against objectives.  This is a base condition for accountability.

Gaining media coverage, sending tweets or getting others to tweet about you, creating Likers or gaining Followers should be thought of as strategies or perhaps tactics.  Objectives are what you want to happen as a result of the combination of strategies and tactics.  Programs are not made of single media hits, tweets, Likers or Followers.  They are longitudinal, holistic and integrated.  Successful programs might generate hundreds of media hits, scores of blog posts, and thousands of Likers or Followers.  Orchestrated correctly, all these strategies and tactics should help us achieve our overall program objectives.  The reality of the situation is any one discrete result of a campaign – a hit, Liker or Follower for example – usually has a very small overall impact.  The impact most likely would not be measurable, and if it was, it would not likely be meaningful.  They are just pieces of the overall program puzzle.

Let’s conclude with a simplistic Facebook program example.  Your tactic is to gain more Likers that meet a certain demographic profile.  Your strategies are to create an engaged brand community in Facebook, and to encourage online and offline WOM about the brand.  Your objective is to increase brand preference from 17% to 21% in the next 12 months.  Measure this objective, and if you want to do value attribution and calculate ROI, figure out how much each 1% increase in brand preference is worth in incremental sales.  That’s a puzzle worth solving.

Photo From liza31337

Relief from your Social Media ROI Angst

25 Feb

Return on Investment (ROI) is one of the most discussed and agonized-over topics in social business today.  However, much of the discussion around social media ROI has been simply confused, confusing or misguided.  There have been posts on large, well-known blogs (riff on ways to prepare potatoes) that are incredibly naive in their discussion of ROI.  In some circles there is endless philosophic debate bounded on one side by the Puritans who believe ROI is an old/incorrect way to think social business and on the other side by the Analyticans who seem to believe you can always determine ROI with a web analytics package.

The net-net of all this is a lot of frustration, even angst over how to think about ROI and social business.  We’re here to help.  Take two deep breaths and read these four points.  You’ll feel better soon.

Point Number One:  As a practical matter, the majority of social business efforts will not result in true ROI (in the short term).

In fact, I would guess far less than half will.  Maybe less than 10%.  But that doesn’t mean the social business effort was not successful, or did not create significant value for the brand or organization.  It simply means the primary objectives of most social business efforts are centered on concepts like community-building, engagement, listening, and participating in conversations.  It is difficult and expensive to attribute financial value to these areas.  To use the old saying – the ROI on these sorts of ROI efforts is not good.  Traditional public relations, branding and reputation programs suffer from some of the same challenges.  So when a study like the one published by e-Marketer* suggests ‘only’ 16% of social business programs are measuring ROI, while many are surprised it isn’t higher, it actually sounds a little too high to me.   I wonder how respondents were thinking about and defining ROI.

Point Number Two: Loose use of the term ROI is a major cause of angst.

ROI is not synonymous with results, KPIs or value.  ROI is not the only or perhaps even the most relevant way to define success in social business.  ROI is a financial metric.  ROI can only be measured in terms of revenue generated, cost savings or costs avoided.  It is transactional in nature.   There is ample evidence on twitter, blog posts and in blog comments that many people say ROI when they really mean results or value.

Many of the well-intentioned but misguided attempts to rename or reinvent what ROI means in social media – return on influence and return on engagement probably getting the most play – seem to be the result of an inability to distinguish value creation from ROI.

Point Number Three: Understand the difference between value and ROI.

Social media efforts may create financial impact (ROI) and/or non-financial impact. Engagement and Influence are examples of non-financial impact.  Other non-financial impacts like increased brand awareness or purchase consideration may eventually result in ROI at a point in the future when a financial event occurs.  Try to be explicit as to whether the social business program is designed to generate non-financial impact or true financial ROI, and make sure the people writing the checks understand the difference.  Show how the effort is linked to one or more business processes and how it will deliver value by helping to drive the desired business outcomes.

We know social networks have the ability to create value through customer engagement and community building.  However, ROI can only be measured by their ultimate impact on downstream metrics like sales, employee retention and customer loyalty/repeat purchase.  Many social business efforts are in an investment phase.  The value is largely intangible.  Some may eventually become transactional and result in true financial ROI.

Point Number Four:  ROI in social business has a time dimension.

Value may be created in the short-term and longer-term.  Social business campaigns utilizing channel-specific URLs and ecommerce landing pages are an example of easily measured short-term ROI (setting aside last-click attribution issues).  Longer-term value is much more difficult to quantify.  There are some similarities between social media and brand in this regard.  Success in each is a process and not an event.  You may have ongoing activities that sustain the brand/social business program and brand building events or campaigns that provide short-term spikes in awareness and engagement.  Managing and measuring your social business effort properly requires thinking about the value you are creating in the short and longer-term.

Your investments in social media or public relations remain an investment, creating additional value if done correctly, until which time they can be linked to a business process transaction that results in ROI.  Calculate ROI whenever you can, but also try to articulate the value your programs will be creating, and how this value aligns with, and contributes toward, achieving one or more desired business outcomes.

If you are not feeling better already, please leave a comment and let us know why.

*Mzinga and Babson Executive Education, Social Software in Business, September 8, 2009

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