The science of social media ROI

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Last week I presented at a webinar as part of a series looking at the science of social, focusing on social media ROI and demystifying the confusion that surround it. The problem with social media ROI is that it is so easy to measure so many things that we become overwhelmed by measures. We think that everything is important and that everything is a measure of ROI. It isn’t. And it isn’t. Followers and Likes do not make ROI; moreover they stop us from thinking about the bigger business benefit of social.

We need to measure different things for different reasons, not just for ROI. There are three broad areas of measurement that we should be looking at in social:

  1. What’s the business benefit? How does any activity contribute towards our business objectives and how do we measure this? Often overlooked in the plethora of social media specific measures, the single most important ROI piece is to think about the business, how social contributes to it and then how we might measure this link.
  2. How successful are my channels and campaigns? More of a quality measure but an important one for anybody who is in charge of social media. With a clear business objective that we have to deliver against, what do I need to measure to make sure that we have the quality of engagement and interactions to get there.
  3. How suitable is my engagement and content? Finally we get to the range of social media measures that are out there - Likes, Followers, views and the like - these are incredibly useful for the people working in social media and managing your channels and engagements. If they write a blog post that gets 10 times as many views as a previous one, these are the people who should be questioning and querying what has caused this change.

The first, and most important, measure is the business one. Why are we doing this? What business objective is social contributing towards? We should ignore, for the moment, the different things we can measure and focus on what social should be contributing to our organisation. Only when we are clear on that will we be able to establish clear ROI measures. And only when we have these should we think of any of the other measures that we can look at and report on.

The presentation I gave at the webinar included this and some case studies of work we have done at FreshNetworks showing business benefit.

The Science of Social
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The next Science of Social webinar is on Wednesday 20 June and looks at How to Identify and Reward Advocates. You can sign-up here.

Social Media ROI: Measuring the unmeasurable?

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Clipart of bills and coinsImage via Wikipedia

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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  • Should We Even Consider ROI in Social Media? (kylelacy.com)
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  • Is 2009 the year of social media & return on investment? (socialmediatoday.com)