Social Media ROI: Measuring the unmeasurable?

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On Friday we posted about an experiment running on one of our online communities, comparing paid and organic search strategies. This is just one of the ways that our clients measure the ROI of their online community - by increased traffic from organic search or significant savings on their paid search bills.

Measuring ROI is an important topic in social media, all the communities that we build at FreshNetworks have very clear ROI cases. We spend time during the planning and strategy phases working on the objectives of the online community and how we can measure this. This may be increased sales, a specific number of new ideas generated for the business, increased retention rate, traffic to an ecommerce platform, savings in market and consumer research spending… The areas where online communities can contribute to business objectives can be vast and depend on the specific needs of the business. Time spent working on this is time well spent.

That’s why this week’s Required Reading is a great presentation on Social Media ROI from Egg Co. I particularly like the way that they break down an ROI measure into a Success Metric and then into a Goal. This is very similar to the way we work with clients at FreshNetworks, and the examples in the presentation show how this approach to ROI can show the real impact social media can have.

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Comparing paid and organic search strategies for online communities

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Image via Wikipedia

Three months ago we started a small experiment with one of our online communities at FreshNetworks. The site had been in seeding phase for about 10 weeks and was starting to get some activity and some real traction, there were loyal members and real conversations starting to grow. At this stage we wanted to grow the number of members and also to grow the quality of the contributions to the site. There are a number of ways you can do this, but one of the real benefits of online communities is the ability to drive natural, organic, search. We wanted to test this and to start to build an ROI model for brands.

We decided to put paid and organic search head-to-head. To devote a modest sum to Google AdWords and also to monitor the organic search on the site. We didn’t spend any more time than usual optimising the content on the site, with the community manager working to organise content and correct spelling but not to make sure that user-generated content was keyword-rich. We wanted to do a real test - putting real organic search against paid search.The experiment is to run for six months and we are now halfway through this.

My hypothesis was that organic search would take time to grow and that at the three-month stage we would still be seeing significantly better results for paid search - higher traffic, more conversions to signing up, greater loyalty and deeper, longer visits. Then during the second three months of the experiment I’d expect organic search to really take the lead and over the six months this to be the clear winner.

Things never work out quite like you expect them to. And in this case they are actually much more interesting.

We’re going to be working on this experiment for another three months so we don’t want to reveal too many details, but initial results are, in part, as expected, but in other areas really not:

  • More visits to the online community come from paid search than from organic search (although if we take just the last month then this is reversed). In total about 1.5 times as many visits came from paid search as from organic search in the last three months
  • But, those coming from organic search are more likely to sign-up to become members of the community. The difference is marginal at the moment, but there is a clear trend to higher conversion rates for organic search visits
  • Those coming from organic search are spending much more time on the site and visiting many more pages per visit. In fact time on site is almost three times as long for organic search as paid search, and they visit almost twice as many pages per visit
  • Finally, those users that first came to the site by organic search are more likely to become active Members of the online community.

So the results are not quite what I expected, but a clear trend is developing. Whilst paid search delivers more search traffic (although this balance is changing) the quality of organic search is significantly better. Traffic to the site is important, but in an online community people signing-up, spending time on the community and actively contributing is much more interesting. For this, organic search seems to be significantly better.

Stay tuned for the final results of the experiment in three months time when we should be able to show the real power of organic search. These initial results are exciting.

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