Cutting through the clutter: Developing an approach to measuring social media impact
Interbrand | Pg. 2
Cutting through the clutter: developing an approach to measuring social media impact by Josh Ingram
We all know social media is a hot topic, but how do we tie it to some sort of return? While 70 percent of companies are currently using social media in some way,1 statistics show that executives are more likely to assign employees to social media initiatives than budget dollars. However, 84 percent of professionals using social media report that they do not currently measure ROI, and 4 out 10 report they do not know how to measure social media ROI in general.2 So while much valuable discussion has been made around why we need to pay attention to social media, and how it can be used effectively, most pro-social media 1 http://www.businessweek.com/managing/ content/sep2009/ca20090911_598255. htm 2 http://www.emarketer.com/Article. aspx?R=1007286
arguments today are focused too much on dramatizing the fact that social media is a game changer. The reality is that there is currently no industry standard for measuring social media ROI. People may believe in the power of social media more than ever, but it’s still hard to make the business case for investment based on belief alone.
like a brand strategy is shaped by business strategy, a social media strategy should be shaped by a robust discussion and clear definition of business goals. These goals differ by company and by industry. There is no one size fits all.
Existing methodologies And yet, while there may be no industry standard today, there are plenty of solid methodologies that demonstrate that we don’t need to prove a paradigm shift in order to establish the right way to measure the progress of a social media strategy. The Word of Mouth Marketing Association (WOMMA), for example, recommends measuring the share of online voices around brands and conversational themes to determine the impact of multiple campaigns—a critical way to flesh out core strategic principles.
The EngagementDB index, for example, ranks the Interbrand Best Global Brands according to its own definition of social media engagement. The report measures two major criteria: depth of engagement within each social media channel and the actual number of social media channels in which the brand has a presence. The former is determined by a weighted average of channel-specific sub-scores.
WOMMA’s assertion highlights a notable but not so obvious characteristic: Much
Another tool that can be used to find value comes from the emergence of social media engagement indices. However, it is important to recognize that their utility is proportional to the strength of logic behind their frameworks.
EngagementDB’s analysis of this reveals many interesting conclusions. One is that the number of channels a brand engages with exponentially increases the
Cutting through the clutter: measuring social media
effectiveness of its singular activities. From a dollars and sense standpoint, this implies that brands that invest more resources in social media get more bang for their buck. It’s no surprise that the biggest conclusion of all in the report is a co-relation between financial performance and overall social media engagement. Another growing area is social media analytics monitoring. Roughly valued at US$ 1 billion, the landscape is filled with many vendors offering an array of useful tools, from segmentation, to sentiment analysis, to varying degrees of conversation identification. As such, there’s limitless potential for finding new ways to measure business value through social media. But while every tool claims to be more precise than the other – and although conducting analyses that account for errors by appropriate benchmarking and calibration is incredibly important—at the end of the day, the accuracy of each tool matters less than our ability to formulate the right questions and hypotheses. In order for any analyses of this massively large data set to be truly usable, it is necessary to establish a process that tailors the research to the business goals at hand. While it’s very easy to romanticize data for the sake of data, the trick is to focus on using human—not just machine—evaluation to determine where there is meaning. The right tools + the right questions = meaningful insight In conclusion, the best way to start measuring social media is by engaging in simple strategic discussions. High demand for industry standard metrics and the wide
Interbrand | Pg. 3
range of tools available make analyzing social media an exciting and complicated task. Yet finding its true value is a task that can’t be completed in a vacuum. The need to combine existing approaches and research with an open and comprehensive discussion of business and brand strategy highlights the need for a customized approach to a social media strategy that is rooted in clear definitions of success. Until there is an industry accepted standard for social media ROI, businesses must continue to ask the right questions, formulate the appropriate frameworks for evaluation, and select the right tools. They must derive insights from the facts that matter most. ■
Josh Ingram Josh Ingram is an Associate Consultant in Strategy at Interbrand. He has quickly developed a strong foundation in Brand Strategy, carving his niche as a thought leader in the development of Interbrand’s Digital and Social Media offerings, as well as a critical problem solver in the Technology and Music/Entertainment fields.
interbrand.com
Creating and managing brand value
TM