Growing the Magic Bean of Social Media Metrics

To gain competitive edge in the online social realm, companies adopt social media as part of their marketing mix. Social media analytics is available to assist companies learn from what consumers are saying online about their brand, products and competitors. Thus they can take proper actions to grow customer relationships and improve bottom line. Companies want to integrate social media data across the organization in business areas such as marketing and brand management, customer service, market research, and corporate communications. Thus they want to be able to measure the return on investment (ROI) of social media.

Today, there are ongoing debates about the ROI of social media, not only on how to measure ROI of social media, but also on whether ROI can be measured in the first place. Here are the two sides of the argument:

• Some people feel that it is impossible to measure ROI because social media represents the value of consumer conversations and relationship building on the web (which is intangible). Because we cannot measure the impact of a conversation or relationship between two people, it would be difficult to measure social media.

• Other people feel that social media insights are only valuable if they can be converted to data. This way, management can base their marketing strategy and decision on concrete statistic-based metrics.

To effectively measure the ROI of social media, a company must first define its business goals, and assign the right attributes for measurement. There are new attributes for social media such as authority, interaction, velocity, attention, sentiment, and actions. The company will have to benchmark its programs according to established goals and assigned attributes. Measurements of ROI can be both qualitative and qualitative in nature.

Qualitative data includes information such as corporation reputation, conversations or customer relationships. In order to measure how well a company is performing in these areas, it needs to:

• Determine specific area(s) it wants to measure (e.g. corporate reputation)

• Come up with the right benchmark (ask questions such as what consumers are saying about the quality of our product and service?)

• Take appropriate actions to achieve success (ask questions such as are we getting higher marks on how consumers rank our product and service?)

Quantitative data includes metrics such as network traffic, amount of sales, or SEO ranking. To measure the performance in these areas, a company needs to:

• Determine which metrics it wants to collect

• Use the right tools to capture the data (there are free tools available like AidRSS, Google Analytics, Feedburner, and Xinu)

• Analyze the data and make changes for improvement

According to Jason Fall, it is a waste of time to try to measure ROI in social media because we can never quantify human interactions and conversations. Katie Delahaye Paine claimed that the only way to measure is ROI is to assess whether we are getting what we want from the conversation.

The real question is: Is building customer relationship really that different between online and the traditional setting? It seems like traditional marketing measures success in terms of how many leads, proposals, presentations, and contracts are generated over a set period of time. Won't it be the same for online marketing as well?

Sources:

Falls, Jason. "What Is The ROI For Social Media?" Social Media Explorer. 28 Oct. 2008. Web. 17 Apr. 2010.

"Social Media FAQ #3: How Do I Measure ROI? « Web Strategy by Jeremiah Owyang | Social Media, Web Marketing." Web Strategy By Jeremiah Owyang: Web Marketing, Social Media. 26 Feb. 2008. Web. 17 Apr. 2010.

Spataro, Mike. "Understanding Social Media ROI." VisInsights. 29 Oct. 2008. Web. 17 Apr. 2010.

Uhrmacher, Aaron. "How to Measure Social Media ROI for Business." Social Media News and Web Tips – Mashable – The Social Media Guide. 31 July 2008. Web. 17 Apr. 2010.

Tapping into the Power of the Crowd

The phenomenal growth in the popularity of social networks has expanded its user base from individuals to include businesses of various sizes. Millions of people spend hours eacy day on multiple social networking sites such as Facebook, Myspace, Twitter, and LinkedIn. Contemporary businesses quickly respond to this trend by integrating social networks into their marketing strategy to gain visibility, connect to their customers, promote their products and services, and improve their bottom line.

While knowing how to tap into these social networks effectively can greatly benefit smart businesses, the adoption of social networking tools into the workforce can also pose major concerns such as lowering productivity and raising security threats. Some potential benefits and threats associated with integrating social networks into a business include the following:

The Benefits:

• Expand online contacts by establishing an impressive profile, thus minimizing costs associated with advertising and marketing efforts.
• Reach out to people personally by encouraging them to connect and become friends. This also extends connections to their network of friends as well.
• Present an online image of a business that is innovative, reputable, and reliable.
• Implement market campaigns such as special promotions, important announcements, and directed web links.

The Concerns:

• Reduce overall productivity when employees spend too much time on social networks during work hours.
• Lower company morale when some employees have to cover the workload for those who are addicted to social networking sites.
• Create problems for IT administrators to deal with high level of bandwidth usage when employees visit those sites with audio/video interfaces.
• Introduce spams and infecting malware when using third party applications within the social network sites. E.g. Koobaface worms associated with messaging software.
• Damage the company's reputation when disgruntled employees make derogatory comments about the company or when they are found to view sites with offensive and illegal content.

Faced with the dilemma of embracing this new way of online communication and confronting major security threats, companies have to decide how much access, if any, to grant their employees. Is it better to ban access to all social networking sites altogether, or grant full and unmonitored access, or settle somewhere in between? It appears that the option favored by most companies is to strike a balance by offering their employees restricted access and setting limits on Internet use. In doing so, they must also equip themselves with the following measures:

• Install current anti-virus software in all computers
• Set up a company firewall to guard against unauthorized access
• Establish and enforce company's security and Interney usage policy
• Monitor Internet usage by the employees and monitor social networking sites
• Grant employees restricted access and monitor access using web filtering software
• Conduct web security awareness training to all employees

The scary thing is that recent Facebook's privacy changes allows sharing of its users' information with other pre-approved third-party applications so that our friends would know about us, not just through Facebook, but through other sites that have alliance agreement with Facebook. Even scarier is that government agencies including the FBI and IRS also use social networking to piece together information as part of their clues to chase down criminals.

The question is: Is our life becoming public just because we joined social networking sites?

Sources:

Internet Addict Image.

Diaz, Sam. "Facebook Fan Pages Get Boost with 'Social Engagement Hub'" ZDNet Technology News. 10 Mar. 2010. Web. 9 Apr. 2010.

Dignan, Larry. "Facebook's Privacy Changes: When Will It Go Too Far (and Will You Even Notice)?" ZDNet Technology News. 29 Mar. 2010. Web. 9 Apr. 2010.

Dignan, Larry, Sam Diaz, and Andrew Nusca. "FBI, Feds Collect Facebook, Social Media Data; Why Are You Surprised?" ZDNet Technology News. 17 Mar. 2010. Web. 9 Apr. 2010.

Kelleher, David. "5 Problems with Social Networking in the Workplace." Information Management. 6 Oct. 2009. Web. 9 Apr. 2010.