Social Media ROI – is this the measurement framework we’ve been waiting for?

Richard Pentin (of TMW) has done some sterling work by teaming up with the IAB Social Media Council to tackle the hottest digital marketing potato; measuring and benchmarking social media ROI. Well, more specifically measuring social media activity that in turn impacts ROI.

Despite the very serious sounding name of the IABSMC, we feel that this provides some great thinking that in a framework could well help us all to formalise a way to manage, measure and compare social media performance.

The SlideShare presentation talks through each step of the process from establishing your intent, assigning the most relevant KPIs around the 4 As "€“ Awareness, Appreciation, Action and Advocacy "€“ and references other benchmarks in order to draw meaningful comparisons.

What do you think are it"€™s strengths and weaknesses? It would be great to hear your feedback and ideas.

A framework for measuring social media activity

Why do we need a recognized framework for measuring social media performance?

• for industry reasons like standardization
• because of internal, company reasons like performance management and optimisation
• there are shared reasons like benchmarking

The solution is around the "€œiab"€ framework - so what is it?

Intent - this is your intent - your objectives and the context for setting your KPI"€™s. "€˜Intent"€™ can be anything from building brand awareness, influencing opinion formers, building a prospect database to uncovering product insights or enhancing customer service

4 A"€™s - Collate KPI"€™s into meaningful groups to tell a bigger story - this is similar to our RACE framework which defines a holistic approach to digital marketing including engagement with social media :

• Awareness (Reach): Awareness of social media platform
• Appreciation (Act): Engagement and appreciation of social media platform
• Action (Convert): Solicits a response or influences purchase behaviour in some way
• Advocacy (Engage): Creates WOM or stimulates advocacy

The importance or weighting for each of the 4 A"€™s is dependent on the intent, notes Richard Pentin. So "€œbuzz creation"€ intent may be more weighted to awareness and advocacy, whereas "€œlead generation"€ would likely be more about action metrics

Benchmark - without this in place metrics, Pentin notes, are completely meaningless:

• His point is that you need to be able to ascertain how one social media platform compares with another when they share the same objectives - so a blog vs a forum or review site
• You also need to be able to compare social media to other marketing channels, again where there are similar objectives to warrant like for like comparison - so social media vs direct marketing, for example
• You will also value industry benchmarking against competitors to understand if you"€™re getting the most out of a particular channel, or not
• Most obviously you also want to benchmark over time to check if you"€™re getting better

Guidelines to defining KPIs

Richard suggests several ways for defining KPI"€™s:

• Using the 4 A"€™s. The example explains that if you were defining hard financials across the 4 A"€™s it"€™d look something like this:
  • Awareness: Cost per Impression
  • Appreciation: Cost per Engagement
  • Action: Cost per Lead
  • Advocacy: Cost per Referral
• You can apply KPI"€™s by social media platform (e.g. blog, micro-blogging, community forum, social network, fan-page, video sharing site, branded channel widget/application etc). Slides 23 onward show specific examples through a suite of tables to help outline some of the main KPI"€™s that you can use. Here you"€™d select what"€™s most relevant to your objectives - and of course create your own since they need to be altered to meet your business, it is just a framework after all.

Check out the slides from 32 onwards where TMW have put the theory into practice for a client"€™s campaign.

In summary we think this framework is a positive move forward on the quest towards a better understanding of Social Media ROI. What do you think?

An alternative approach - 6 key metrics for a social media dashboard

We also like this approach to create a social media dashboard for its simplicity and practicality - any organisation can create this without a sophisticated social media monitoring tool. The six measures to include on the dashboard are:

1. Gross views on main networks network and own blog/community
2. Connections or subscribers on main networks
3. Engagement - comments and interactions
4. Social media referrers - visits to site measured through web analytics and where necessary campaign tracking tags
5. Social media conversions - conversion to goals or sales measured through web analytics
6. My engagement - a different class of measures to the others - how the brand interacts through posts, videos, comments, etc