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Marketers are struggling to find ways to validate the amount of time and energy put into their shiny new social media campaigns because measuring that return is important for getting buy-in from management. Measuring return on engagement (ROE), or the return on time and money spent building relationships that add value in some way to the company, is one way to do this.
Calculating the value of relationships in social media is just as difficult as it is for relationships in “real life.” Say, for example, that you’ve carefully nurtured a relationship with a journalist who writes for several magazines, and now, as a result, she occasionally writes about your area of interest. You’ve created this relationship in order to enlist her help in spreading the word about your company. And now, you’ve become friends (at least through phone or e-mail conversations), swapping stories and information. You help her with the stories she’s working on: You’ve connected her with people in your Rolodex who can answer her questions, and you freely share your knowledge in your own area of expertise. In return, the journalist occasionally quotes you or writes about your company when you send her a request, and refers other journalists to you as a resource.
There’s no doubt this relationship is valuable enough to spend time on, but how do you put a dollar value on it? How do you gauge the amount of time and effort invested in that one relationship?
One of the strengths of social media is that it enables the user to manage many of these types of relationships through various social media presences. With social media, it’s easier to share links to information, make virtual introductions, and exchange knowledge with multiple users at once, rather than with one person at a time. Online, you can establish yourself as a resource, and eventually (sometimes suddenly) find that word about your company has spread, bringing you new connections and referrals.
This does not mean that there is no way to measure the return on engagement for your social media efforts. Rather, measuring it depends on how you engage others online and what your expected results are. It is crucial that, before you start engaging and measuring, you set goals that are measurable in the first place and establish some benchmarks.
Traditional measurement vs. social media measurement
One theory is that you can track the value of a Twitter presence based on the number of views of a particular post, just as you would with ad placements. So if you pay US$20 per thousand ad impressions (cost per thousand = CPM) on a few moderately busy web sites, and your online advertisement is displayed 100,000 times, you’ve spent US$2,000 to have the ad seen. But what is the return? Hopefully, the value of your return is in increased brand awareness, and eventually a sense of familiarity with your product that leads to sales. Possibly the viewer has clicked on the ad and visited your web site, and maybe even made a purchase (although typically the click-through rate on these ads is around 20 percent).
CPM ads disappear entirely once you stop paying for them, and it’s difficult or impossible for the user to find the ad if they ever want to reference it again.
In contrast, social media mentions continue to build traffic long after you’ve forgotten about them. Not only do they continue to come up in searches, they often get quoted again when they are rediscovered and included in a new conversation.
Tracking this kind of return can be a challenge, but using a tool like Bit.ly (which gives you a specific URL to post and tracks how many clicks it gets) can help somewhat.
A post about Twitter manners on my blog received 86 clicks from my initial tweet about the post. Over the next three months, the shortened link to the post I got through Bit.ly was clicked 10,383 times. That means that once the link went out, people shared it in some way. It could have appeared in an e-mail, been re-tweeted on Twitter or an other microblog service, or mentioned in a blog post. Of course that 10,000 click rate doesn’t begin to tell us what the view of the Twitter post was, but if we’re guessing there was a 20 percent click-through rate, then it may have been viewed 51,915 times so far.
Bottom line, would you rather pay for CPM ads that end when you stop investing in them, or social media mentions that keep adding value?
I know everybody needs metrics to justify the energy (and money) spent on campaigns. I want to stress again that in social media, it takes time for these metrics to accrue, just as it takes time to create personal relationships. Don’t expect that you’ll get an immediate return, and even if you do get a big spike in interest, don’t think you’ve heard the last of it. Good content continues to return value long after the first engagement.
Engagement metrics
That said, here are some standards to measure your return on engagement for a specific or overall social media campaign.
- Putting out fires
Did your social media response slow down or reverse an ugly situation? Were you able to connect with a negative post on another site before a false rumor spread? If Motrin hadn’t been paying attention to social media, how much worse would the “Motrin Moms” incident (in which mothers posted vehement objections to a Motrin ad campaign on Twitter) have become?
- Consumer responsiveness
Are you able to respond more quickly to consumer concerns and requests? Best Buy has a new help desk that is fully Twitter-based.
- Search engine visibility
Have your efforts made your web site rise higher in search engines results? Find out here.
- Improved employee relations
Are you better able to keep staff informed and give them ways to provide feedback and innovative ideas? Best Buy uses its “Connect” platform to give their staff a voice and the opportunity to share tips with each other.
- Community evangelism
Have new evangelists for your cause cropped up and started blogging or commenting in your favor? Jive’s Sam Lawrence uses his personal blog to draw in new readers, including analysts, competitors and potential business partners.
- Cutting expenses
Has your social media outreach enabled you to reduce spending on print expenses for educational materials? (For a discussion of this topic, click here.)
- Deeper consumer relationships
Have your social media efforts enabled you to create richer relationships with your users? Read Charlene Li’s report on how engagement correlates to financial performance.
- Increased efficiency
Do you reach a wider audience more quickly through social media channels? Social media reach people in more formats than traditional off-line media. Read about how the two can work together here.
All of the above are potential returns on engagement, whether through social media or personal connections. Gauge how many more people you can reach and judge for yourself if social media is effective for you. Find ways to record the responses you receive so you can honestly say how the above measurements have significantly changed. In this way, you can demonstrate value.
Janet Fouts is a social media coach and speaker. She works with individuals and corporations to help them understand how to use social media tools efficiently. She is partner in the web design and development firm Tatu Digital Media, and she freely shares her knowledge on several social media platforms, including her blog.
Her upcoming book, Social Media Success! is due out in November.
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