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Social Media Measurement at a Crossroads

25 Jul

Please join me on August 6, from 2:00 – 3:00pm EDT for CARMA’s fourth quarterly webinar, co-sponsored by PRNews, titled “Social Media Measurement at a Crossroads.” Here is a little more information on the webinar:

With social media clearly entrenched as a mainstream business activity, the need to measure the impact on the organization has never been greater. While social media practitioners talk about Like or Follower growth, organizations want to understand how social media is helping drive the business or cause forward. 

Another challenge in social media measurement is the lack of standard definitions, approaches and metrics. In response, a cross-industry push to define social media standards was initiated and initial standards recently published. Social media measurement is clearly at a crossroads where new thinking and approaches are emerging.

In this session you will learn:

  • How to align KPIs and metrics to demonstrate organizational impact and value. 
  • What industry efforts are being made toward standardization and the implications for how you approach social media measurement
  • New models, metrics and frameworks you can use today to develop more effective social media measurement programs.

I will be joined by PRNews Group Editor Matthew Schwartz, who will moderate the discussion and lead a Q&A session.

Here is a link to register for the session. Feel free to leave a comment with any questions you would like answered during the webinar and I will do my best to address them. Hope you can join!

Social Media Measurement 2011: Five Things to Forget and Five Things to Learn

30 Dec

It has been said that social media came of age in 2010.  Not so for social media measurement.  But the mainstreaming of social media marketing brings with it a heightened call for accountability.  The need to prove the value of social media initiatives has never been greater.  So, perhaps 2011 will be the year that social media measurement matures and comes of age.

As we look to the next year, here are five things to forget and five things to learn about social media measurement in 2011.

Things to Forget in 2011

1. Impressions

The public relations industry has historically measured and reported success through the lens of quantity not quality.  The most common PR metric today is Impressions.  While it is a somewhat dubious metric for traditional media, it really loses meaning in social media where engagement not eyeballs is what we seek.  Impressions also (greatly) overstate actual relevant audience.   Impressions merely represent an opportunity to see, they do not attempt to estimate the (small) percentage of the potential audience that actually saw your content.

For Twitter, many folks use the sum of all first generation followers as ‘impressions’ for a particular tweet.  The obvious problem here is that the probability that any one follower sees any one tweet is quite small.  I don’t have good data on this (please share if you do), but an educated guess might put the percentage at less than 5%.  Similarly for Facebook, use of impressions as a metric is also problematic.  Facebook impressions do not indicate unique reach and you don’t have any idea who, if anyone, actually viewed the content.

Number of Impressions is a flawed, unwashed masses metric for social media measurement.  Any time you are tempted to use the word ‘impressions’ in social media, think about ‘potential reach’ or ‘opportunities to see’ instead.  Or better yet, concentrate on Engagement and Influence.


2. Vanity Metrics – Fans and Followers

Most social media measurement efforts place far too much emphasis on Fans/Likers and Followers.  For Twitter, the number of Followers is seen as a key metric, thought by many to relate to potential influence.  For Facebook it is the number of Fans/Likers many companies/brands attempt to maximize.  While these may be the vanity metrics of choice, they fall far short of being adequate for rigorous measurement.  The largest disconnect of course is these numbers really don’t describe potential audience size very well and they have nothing to do with interactions/engagement.

For Twitter, there is a growing amount of evidence (read the Million Follower Fallacy paper) that number of Followers really has little to do with Influence.  Number of Followers may be an indication of popularity but not influence.  Influence talks more to one’s ability to start conversations and spread ideas.  For Facebook, number of Fans bears little semblance to average daily audience size and tells you nothing about engagement of the community.  All Fans are not created equally.  Some are engaged, some never return.  Some are your best customers, others are there only to trash you.

Number of Fans and Followers are metrics you probably should include in your overall metrics set, but should be de-emphasized and not be a primary area of focus.


3. Standardization

Measurement standardization is always an interesting topic to debate.  On one side you have the folks who believe standards are absolutely necessary for measurement to proliferate, and on the other side you have the snowflake measurement disciples who believe each program is unique and therefore requires unique objectives/metrics.  I fall somewhere between the two extremes.

In June 2010 IPR, AMEC, PRSA, ICCO and The Global Alliance got together in Barcelona for a conference intended to create an atmosphere for measurement consistency/standardization around a codified set of principles of good measurement.  The Barcelona Principles as they have come to be called are basic statements of good measurement practice – focus on outcomes not outputs, don’t use AVEs, etc.  Absolutely nothing to disagree with in the Principles.  However, the heavy lifting of standardization comes at the metrics-level.  Subcommittees have been formed that are taking the Principles all the way down to the metrics level.  I have reviewed the work of the social media committee and believe there is a lot of good work being done.

But in 2011, I expect a lot of debate but not a lot of progress in creating social media measurement standardization.   One to watch is the Klout score for online influencers which is being integrated as metadata in social media listening and engagement platforms.  There are issues with the Klout score (read this post), and I question the type of ‘influence’ it is measuring – there is a big difference between motivating someone to action (e.g. retweeting your content) and motivating someone to purchase which is ultimately the type of influence many companies and brands are most interested in effecting.


4. Ad or Media Equivalency

One of the truly insidious aspects of public relations measurement is the use of advertising or media equivalency (AVEs – advertising value equivalency) to assign financial value to public relations outputs.  It is a highly flawed, path of least resistance attempt to calculate return on investment (ROI) for public relations.  There are many reasons why using ad equivalency as a proxy for PR value is not advisable.

To make matters worse, the practice has clearly moved into social media measurement as well.  For example, research studies that monetize the value of a Facebook Fan/Liker by attributing an arbitrary $5 CPM value from the advertising world.  Online media impact rankings also utilize equivalent paid advertising value to assign monetary value to online news and social media.  The true value of social media is not how much an equivalent ad would have cost but in the impact it has on brand, reputation and marketing.


5. Return on Engagement/Influence/etc.

Not a day goes by without someone declaring a new and improved metric for the acronym ROI, or stating that ROI does not apply in social networks.  A recent Google search for “Return on Engagement” returned 192,000 results.  “Return on Influence” returned 68,300.

Most of the folks who use these terms either don’t understand ROI or don’t know how to obtain the data necessary to calculate it.  Many confuse the notion of impact with ROI (addressed in Things to Learn).  Engagement creates impact for a brand or organization, but may or may not generate ROI in the short-term.  Creating influence – effecting someone’s attitudes, opinions and/or actions – creates impact but may or may not create ROI in the short-term.  It often is better to think about measuring impact first and then deciding whether or not you have the means and data necessary to attribute financial value.


Things to Learn in 2011

1. Measurable Objectives

There are many issues and challenges in the field of social media measurement.  The easiest one to fix is for everybody to learn how to write measurable objectives.  Most objectives today are either not measurable as written or are strategies masquerading as objectives.  (For example, any sentence starting with an action buzzword like leverage is a strategy.)

‘Increase awareness of product X’ is not a measurable objective.  In order to be measurable, objectives must contain two essential elements:

  • Must indicate change in metric of interest – from X to Y
  • Must indicate a timeframe for the desired change – weeks, months, quarter, year, specific dates tied to a campaign (pre/post)

Therefore, properly stated, measurable objectives should look more like these:

  • Increase awareness of product X from 23% to 50% by year-end 2011
  • Increase RTs per 1000 Followers from 0.5% in Q1’11 to 10% by the end of Q2’11.


2. Impact versus ROI

ROI is one of the most overused and misused term in social media measurement.  Many people say ‘ROI’ what they really just mean results or impact.  ROI is a financial metric – percentage of dollars returned for a given investment/cost.  The dollars may be revenue generated, dollars saved or spending avoided.  ROI is transactional.

ROI is a form of impact, but not all impact takes the form of ROI.  Impact is created when people become aware of us, engage with our content or brand ambassadors, are influenced by engagement with content or other people, or take some action like recommending to a friend, writing a review or buying a product.  Impact ultimately creates value for an organization, but the value creation occurs over time, not at a point in time.  Value creation is process-oriented.  It has both tangible and intangible elements.

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 outcome transaction that results in ROI.

Most social media initiatives today do not (or should not) have ROI as a primary objective.  Most social programs are designed to create impact, not ROI, in the short-term.  There is also the notion that many social media initiatives are in an investment phase, not a return phase of maturity.


3. Hypothetical ROI Models

One important step in determining how a social media initiative creates ROI for an organization is to create a hypothetical model that articulates the cascading logic steps in the process, as well as the data needed and assumptions used.  The model is most useful in the planning stages of a program.  It helps address the proverbial question, “If I approve this budget, what is a reasonable expectation for the results we will achieve?”  Let’s take a look at a simple Twitter example:

Program: Five promoted tweets are sent with a special offer to purchase a product on an e-commerce site.

Hypothetical ROI Model:

  • (Data)                   Total potential unduplicated reach of the five tweets is 1,000,000 people
  • (Assume)            10% of the potential audience will actually see the tweet = 100,000 people
  • (Assume)            20% of the individuals who see the tweet find it relevant to them = 20,000 people
  • (Assume)            10% of those finding it relevant will visit the site = 2,000 people
  • (Assume)            10% of those visiting the site will convert and buy the product = 200 people
  • (Data)                   Incremental profit margin on each sale is $50
  • (Data)                   Total cost of the social media initiative is $2,400

ROI Calculation: (200 x $50) = $10,000 – $2,400 = $7,600/$2,400 = 3.17 x 100 = 317% ROI

Our model suggests this program will be successful and generate substantial ROI.  If in reviewing a model with someone who needs to approve a program, they conceptually buy into the model but challenge the assumptions, that is a positive step.  Negotiate different assumptions and rerun the numbers.  Hypothetical models help you think through the data requirements your research approach must address in order to actually measure the ROI of the program after implementation.


4. Integrated Digital Measurement

The definition of public relations is fluid, and 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.  Digitization in all its forms has driven and accelerated this important change.  Communicators should now take a more content and consumer-centric view of the world, orchestrating all the consumer touch points available in our increasingly digital world.  At Fleishman Hillard, we capture this expanded scope and integration in a model we refer to as PESO – Paid/Earned/Shared/Owned.  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 social media measurement Holy Grail in many ways is to be able to track behavior of individuals across platforms, online and offline, tethered and mobile, understanding how online behavior impacts offline behavior and vice-versa.  We also seek to understand how the PESO elements work together synergistically.  For example, how exposure to online advertising impacts conversions within social channels.  To address this, your measurement strategy should be to take a holistic, integrated approach using a variety of methodologies, tools and data.


5. Attribution

If you are not already familiar with value attribution models, prepare to hear much more about them in 2011.  Value attribution models attempt to assign a financial value to specific campaigns and/or channels (e.g. advertising, search, direct, social) that are part of a larger marketing effort.  So rather than giving all the conversion credit to the last click in a chain or even the first click, the model attributes portions of the overall value across the relevant campaigns and/or channels.

A simple model might look at the following metrics for each channel:

  • Frequency – the number of exposures to a specific marketing channel or campaign
  • Duration – time on site for exposures referring to the conversion site
  • Recency – credit for exposures ranging from first click to last click, with last click typically receiving more credit.

Value attribution models require human analysis and expertise.  This factor is often cited in studies as the reason more companies do not pursue attribution modeling.


Here’s wishing you and yours an exciting and prosperous 2011!

Will Barcelona Measurement Debate Shake Up the Industry?

26 May

In mid-June, the Second European Summit on Measurement will be held in Barcelona.  The Summit is jointly organized by the International Association for Measurement and Evaluation of Communication (AMEC) and the Institute for Public Relations.  The highlight of the conference will be a debate to “articulate and agree on standard metrics and measurement techniques…” according to a press release issued last week.

David Rockland, head of research for Ketchum, will lead the session.  Mr. Rockland has a lofty vision and high hopes for the debate, “We regard this as the industry’s ‘Commitment Conference’.  This is a very powerful moment in time in the history of public relations.  Until now, public relations has been undervalued due to its inability to measure itself.  The goal of this summit is to establish consistency in order to increase credibility.”

The three-day conference is expected to be attended by about 150 people, including many measurement thought leaders.  It should be interesting to see what comes out of this event.  Will it serve as a wake-up call to the industry?  Time will tell.  I’ll post some thoughts once the summit concludes.

Keeping it real…and transparent

  • I am a member of the Institute for Public Relations, Commission on Public Relations Measurement & Evaluation
  • My agency, Fleishman Hillard, has agreed to join AMEC (pending paperwork)
  • Ketchum is a sister Omnicom agency

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

Social Media ROI Part 2: Research Approaches

8 Oct

In Part 1, we attempted to define a framework for thinking about measuring the ROI of social media activities and programs.  In this post we’ll take a relatively high-level view of specific research approaches that are applicable to calculating social business return on investment.

One of the items I stress to my PR/Advertising research students is the need for a researcher to understand the industry/business in which they are operating, how the discipline (e.g. PR or advertising) works as well as how the specific program or initiative is designed to ‘work’.  Two baseline concepts of the ROI Framework presented in Part 1 are the need to establish measurable objectives, and that these objectives should tie to one or more relevant business processes.  Alignment is crucial here and must be addressed as part of the planning process not post-execution.

At the risk of throwing-out a less than fully fleshed-out idea (OK, I am, so lets improve it together), here is a table to help you think through possible ways to align social programs.  The table shows the business functions/departments, a few possible uses of social programs in each area, the applicable business process, a few sample metrics and the basis (revenue, cost savings, cost avoidance) for creating ROI.

Microsoft Word-1

ROI Research Approaches

Direct Linkage – This approach is most applicable to social media promotional or e-Commerce efforts.  It generally involves use of unique URLs tied to specific social networks that direct respondents to a company e-Commerce website to redeem coupons or purchase product.  Using this approach, Dell generated over $2MM in incremental sales on their outlet site primarily driven by offers to their over 625K Twitter followers.  Direct linkage approaches mitigate two potential problems with ROI determination – tying the offer directly to an action and isolating the impact of each marketing channel.  Web analytics should provide the data necessary to determine ROI.

Staff Cost Reduction – The CRM or customer service and support functions are one of the more interesting uses of social networks.  There is some early work (e.g. Forrester Research) showing how social programs may directly reduce staff necessary for customer service and support.  For example, when questions can be answered by other customers and not just by the company.  ROI determination involves demonstrating how social programs have reduced staffing costs and call center investment requirements.  ROI may also be generated by enhanced customer loyalty resulting in higher average transaction volumes or more frequent purchases.

Correlation Modeling & Econometrics – Correlation models use statistical techniques to show the relationship between two variables of interest.  For example, we may be interested in how changes in Net Promoter Score correlate with sales.  The primary challenge with a correlation model is isolating the impact of social media from all the other ways – WOM, advertising, promotions, public relations – the change in the variable of interest may have occurred.  The simplest approach is to collect data during times of low or no other communication activity.  If multiple communications channels are in use, econometric models that attempt to statistically isolate the impact of each communication variable should be used.  Econometric modeling is expensive (in the ballpark of $100K to develop a model) and is data sensitive. That is, a lot of data is generally required for the models to work properly.  One also needs a lot of data (generally model designers want two or three years worth of data to isolate effects like seasonality) in order to achieve sufficiently high confidence levels in the correlation.  Other challenges include data normalization and the estimation of the baseline level of sales which is defined as the sales that would occur in the absence of any promotion or marketing.  For retail econometric models with established brands, the baseline sales might be around 50% of the observed volume.

I prefer models that attempt to correlate PR/SM outputs to PR/SM outcomes, and then a second correlation involving PR/SM outcomes (e.g. purchase consideration or Net Promoter) with business outcomes like sales.  Here is a simplified overview of a possible modeling approach.


Econometric models have two important characteristics – they are predictive so once you develop a model, in the absence of changes in the assumptions,  it may be used for forecasting without the need to generate a new model, and it provides a way to address value attribution for non-financial indicators like exposure, engagement or influence.

Exposed/Not Exposed – This form of research attempts to identify those individuals within your target audience who were exposed to programs and content, and compare their purchase intent or purchase history with a control group of audience members who were not exposed to the program and content.  The ‘lift’ created within the exposed group is used to calculate ROI.  The research approach involves use of primary audience research to gather the data necessary to calculate ROI.  You would screen respondents for exposure to specific social programs (this is tricky from a research questionnaire perspective) using visual cues and/or descriptions, being as specific as possible.  Experience shows the percentage of the potential audience exposed to a given program may be fairly low.  Therefore you may need a large sample size to net enough ‘exposed’ respondents to have a statistically projectable sample.  This dynamic drives higher research costs of course.

Integrated, Cross-Platform Research – By utilizing a combination of web analytics, click-tracking, digital content analysis, sales/scan data and primary research it is possible to track behavior of individuals across websites and social networks.   Companies like Compete and ComScore are becoming more integrated in their offerings along these lines, combining online behavioral tracking with panel research.  Early efforts have focused on using a combination of click-tracking, primary research and sales scan data to track opinion, behavior, actions and transactions.  The effort undertaken by ComScore and Dunnhumby to measure MySpace advertising (see April 17 AdAge) is a great early example of the cross-platform approach to ROI determination.

We are still in the early stages of understanding ROI with social business programs.  I look forward to continuing the journey with you.  Thanks for reading!

(Please also see this article in this week’s IABC CW Bulletin for a discussion of social media return on investment – separating myth from methodology.)

Five Things You Should Know About Social Media ROI

8 Jun

In a January post of 2009 social media predictions I wrote:

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 PR programs are helping to drive desired business outcomes.

Are you are seeing the accountability bar being raised this year?  In my corner of the world, the volume of conversation about social media ROI is high and accelerating. Unfortunately much of the conversation has been misinformed and misguided.  It seems like every week brings another post attempting to reinvent the acronym or the meaning – ROI really means Return on Influence, or Return on Engagement is the new ROI, and on and on.  There is another group of online Zen Masters who would have you believe social media ROI is old school thinking and not in tune with social media Zeitgeist.   In that case, I’ll take’ Old School’ for $100, please.

Here are five things about social media ROI you should know:

  1. Return on Investment is a financial metric.  It tells the percentage of financial return you generated for a given investment level.  The financial return is usually revenue, butdollar-sign.jpg (JPEG Image, 520x731 pixels) - Scaled (85%) may also be money you saved by making the investment or money you avoided spending in the future.   Notice the common thread here – its about money.
  2. Attempts to reinvent the acronym are counterproductive.   Return on Influence/ Engagement/Whatever; do not ever get to the basic money question.  Most of these attempts share two characteristics – they are confusing ‘return’ with impact/results (read Olivier Blanchard’s The BrandBuilder Blog for more on Impact/Return confusion), and/or they are making an argument that social media ROI is largely intangible, represented by relationships, engagement and community.   What they are really saying, perhaps unintentionally, is ROI is often difficult to determine and I really don’t understand it.  In my opinion, attempts to reinvent or circumvent ROI discussion in social media actually hurt credibility with the people writing the checks.  They expect an apples-to-apples – money in and money out – discussion.
  3. ROI in social media has a time dimension.  Value may be created in the short-term and longer-term.  Social media-specific promotions are an example of easily measuredsand.jpg (JPEG Image, 300x400 pixels) short-term ROI.  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 generally will have ongoing activities that sustain the brand/social media program and brand building events or campaigns that provide short-term spikes in awareness and engagement.  Contribution to organic search results is another example of longer-term value creation with branding and social media efforts.   Managing and measuring your social media effort properly requires thinking about the value you are creating in the short and longer-term.
  4. Linkage and correlations are important.  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.  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 empchain-links.jpg (JPEG Image, 245x328 pixels)loyee engagement, you might link social media efforts to the employee recruitment and retention business process.  For an eCommerce company you might be able to directly link to the sales process through unique URLs or click-tracking technologies.  When attempting to show statistical relationships, correlations become important.  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.
  5. All ROI studies are custom.  The simple fact is you cannot buy an off-the-shelf solution to calculate the ROI of your social media effort.  All ROI studies are custom.  This is primarily a reflection of the unique objectives each company may have for their social media efforts.  Objectives are specific and contextual, and your ROI measurement efforts will need to be as well.   Attempts to develop ROI Calculators where you simply plug in several numbers and hit a button to calculate your ROI are not worth the time it takes to plug in the data.  They are a one-size fits none approach to ROI.  (Read this brilliant and very humorous post by The Brand Builder where he methodically skewers a recent ROI calculator attempt).

We are in the very early stages in our ability to measure the ROI of social media.  Not enough cycles yet.  Case studies are limited but growing.  The need to demonstrate a financial return on social media investment, if not here already, will be here shortly.  We have a lot of work to do.  Let’s get started.

Capturing the Total Value of Public Relations

15 Dec

Since public relations is a broad profession and may cover a wide variety of disciplines – media relations, online engagement, crisis communications, public affairs, executive counseling, brand building, events, reputation management, employee communications and financial communications to name a few – it is difficult to conceptualize the totality of value public relations and communication delivers to the organization.  For the most part, public relations measurement has focused on attempts to measure media relations value and is not really addressing the other areas very well.  When you are attempting to quantify the full value and ROI of public relations, taking the broad view paints a much richer picture.

The PR Value Cube is a tops-down conceptual framework for capturing all the ways PR is contributing value to the organization.  PR contributes value in one of three major, interrelated areas (Y-axis):

Marketing – Sales and other marketing oriented programs and metrics (e.g. lead generation) fit within this category.   The vast majority of PR measurement efforts today fall within the Marketing category.

Brand – PR contributes to building brands.  Value contribution in this area is usually more anecdotal than measured.  Experiential PR and many social media campaigns are contributing more to brand than sales or any other area.

Reputation – One of the primary overarching purposes of PR is reputation enhancement and protection, yet our contribution here again is usually measured more by ‘gut metrics’ than analytics.


Within each major area we can examine value created through Engagement, Influence and Action (X-axis).

Engagement – to what degree has exposure to PR materials, activities and events created Engagement with the intended target audience?  Are they interacting with our content, creating links, forwarding to friends, talking about the brand, etc.

Influence – the degree to which Engagement has influenced perceptions and attitudes.  Likelihood to recommend the brand to a friend and brand consideration changes are two possible examples of Influence.

Action – as a result of the public relations effort, what actions if any has the target taken?  Did they visit the web site, tell a friend, buy the product, vote for our candidate, etc.

The value itself can take one of three forms (Z-axis):

  • Revenue generation
  • Cost Savings (e.g. employee recruiting costs decline due to strong company reputation)
  • Cost Avoidance (e.g. avoiding recruiting costs because employee retention/loyalty has improved)

There is one more important consideration when thinking about the total value delivered by public relations and social media.  That is time.  PR creates value on a transactional, short-term basis (e.g. the value of 10,000 potential customers reading your article in today’s Wall Street Journal) and on a process-oriented, longer-term basis.  Brand and Reputation are both examples of longer-term value.  Both are process-oriented, and build and lose value over time, often measured in years.  The other time dimension value created by PR is what I have referred to previously as the residual value of PR.  That is the value of the created searchable and archived content created by the PR function.  The residual value may take the form of influencing organic search positioning.

That’s a lot of value for one profession!  In 2009, let’s hope CEOs, CMOs and other decision makers increasingly recognize the great value and superior ROI delivered by public relations.

Accountability No Longer Optional

11 Apr


In my last post, we discussed that one aspect of having a ‘seat at the table’ is that the public relations function needs to be more accountable for results.  While accountability may take several forms, at the most basic level it is about being responsible for ones actions and outcomes, i.e. did you/your organization do what you said you would do?  So how can we operationalize this concept in public relations?

We believe there are three fundamental opportunities for accountability across the public relations programming lifecycle: 


  1. Quantify Opportunity/Problem – At the time of assignment, the PR team applies a little Left Brain thinking and quantifies the magnitude of the problem or opportunity that PR will address.  This was discussed in a previous post.
  2. Solution Quantification – Once the programming is developed, but before it is approved and implemented, we should quantify the anticipated results for the program.  This step answers the question, “If we accept this proposal/plan, what results or value might we reasonably expect?”  It also sets up the third step… 
  3. Quantify Results – The third stage of the framework occurs post-implementation and is the traditional measurement and evaluation phase. 

The essence of accountability occurs when we compare the results we “promised” in stage 2 to the actual results measured in stage 3.  The real kicker here is stage 2, which we may call ‘Solution Quantification’.  PR professionals have long been reluctant to predict in any specific way how much coverage, for example, will occur as a result of a given program or campaign.  You may have heard this reluctance expressed as ‘PR is an art, not a science’.  Regardless of the merits of this argument, we cannot use it as an excuse not to be accountable.  Accountability is not easy.  It is essential however if the PR function is to maximize its potential impact on the organization.  –Don B