Wednesday, September 2, 2009
Measuring social media ROI - "hard" vs. "soft" metrics. Interview with David Meerman Scott & Ogilvy PR and digital specialists
Today brands are facing the challenge of becoming "sociable", or as some analysts describe - "open source brands". This means higher transparency, accessibility and obviously - authenticity.
Although new media "pushes" brands to speak to consumers, interact with them or even ask for advice , many executives perceive "being sociable" as an equivalent to "over-exposure", showing fear in front of web democratization.
Well, now when the benefits of social interactions are gradually becoming obvious (e.g.Dell reported $ 3 mln sales via links posted on Twitter, Zappos extended hugely its customer base, Ford launched their first Social Media Press Release and got free publicity during their new Ford Fiesta campaign, etc), managers are starting to wonder: how do we measure the effectiveness of social media?
I addressed a few questions to Ogilvy PR and digital specialists: James Poulter, Rebecca Perfect and John Heredea (Ogilvy PR Worldwide):
Digilunch: Do you think that certain companies (industries) should avoid social media?
Rebecca: It could be applicable to any brand if used strategically, whether it's for internal or external use. The major question is : what type of involvement is right for your brand/company?
James: Social media is extremely diverse in its use. There're so many applications for social media in customer service, knowledge management, asset management, human resources, etc. As for marketing perspective there're no particular limitations by sector, it's the strategy companies use to socialize.
John: Also, interaction with consumers adds to the level of trust the brand could benefit from.
James: Trust is key, since there's natural human ability to trust in people. We trust people implicitly day and day out, which could not be told in the same manner of companies. So it makes sence for the brands to come out from their "shells" and start talking to people.
Digilunch: What do you think are the main mistakes companies make when they first start using social media?
James: Spamming is one of the biggest mistakes companies make when using Twitter, for example. Remember the Habitat case? In order to get its tweets noticed, the company used Iranian election # hashtags that had nothing to do with their own tweets:
Digilunch: An example of negative public reaction:
Rebecca: That is why a massive re-education is needed in order to understand this phenomenon!
James: Eventually, the biggest mistake companies might do is: not listening. All brands should stop thinking like companies and start thinking like people!!
Also, when engaging, companies should think of long-term relationships. You've got to relate to it in the same manner you maintain a relationship with a friend: if you suddently break your relationship, you no longer can rely on this bonding as initially - it's commonsense!
Digilunch: Since there’s a strong debate about whether B2C companies should measure social media against brand awareness or tangible revenue figures. What would you say?
James: Any Marcomm methods are measurable. Social media could be addressed by: reach, perception change (measuring positive and negative sentiment) or ROI figures (PR/advertising equivalents) - which are the most debatable, because at the moment there's no universally accepted benchmark in the industry to measure social media ROI.
That's why each agency provides its own metrics to cover the client's objectives.
Digilunch: I've asked the opinion in this matter of David Meerman Scott author of the award-winning Business Week best-selling book “The New Rules of Marketing and PR”(2009),
his answer is below:
I’m often confronted with the issue of how to measure an online initiative’s results. Executives at companies large and small as well as marketing and PR people push back on the ideas of a World Wide Rave because they want to apply old rules of measurement to the new world of spreading ideas online. The beauty of the Web is that you benefit from instant access to conversations you could never participate in before.
The old rules of measurement used two metrics that don’t matter when spreading ideas, especially online:
1. We used to measure “leads”— how many business cards we collected; how many people called the toll free number; how many people stopped at the
tradeshow booth; and how many people filled out a form on our Web site, providing their email address and other personal information.
2. We used to measure “press clips”—the number of times our company and its products were mentioned in mainstream media like magazines, newspapers, radio, and television.
While applying these forms of measurement might be appropriate
offline, using them to track your success on the Web just isn’t relevant; they don’t capture the way ideas travel. Worse, the very act of tracking leads and collecting email addresses hampers the spread of ideas.
Generally, companies executives are looking for "hard" measurement tools, to see social media through "revenue lenses", whereas pactitioners incline to the importance of long-term engagement, suggesting "soft tools" to measure the interaction rate, customers' satisfaction and feedback.
And guess what? building strong relationships with consumers was never a short-tem task.
Sources that caught my attention while exploring this topic:
1. eMarketer "No single metric for digital success": http://ow.ly/nOTd
2. eMarketer "A tool for every purpose": http://ow.ly/nOTK
3. ReadWriteWeb "Social media ROI - Dell's $3 mln on Twitter..": http://ow.ly/nOUq
4. PageonePR "Using cost per click social media ROI" : http://ow.ly/nP6a
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