April 5, 2011

Metrics advice: Think KPIs not ROI

JD LasicaOne of the most packed sessions at this last’s Web 2.0 Expo in San Francisco was “Measuring the Future: New Metrics for New Media,” a solo talk given by Margaret Francis, Vice President of Product at Lithium, one of our top 10 social media monitoring vendors.

“Social media is an effective way to create awareness of and interest in products and services,” she told the 400 onlookers. So, how do you do that?

Those of us who do social media consulting for brands bump up against this all the time: The client — properly, of course — wants metrics to gauge the success of their social media or social marketing efforts and to shift course when they’re not hitting their goals.

There are tons of things you could be measuring. David Berkowitz even listed 100 ways to measure social media, but that’s the way to get lost in the weeds.

Instead, Francis said, “Measure strategy, not stuff.” That is, focus entirely on what you’re trying to accomplish with your social media program or campaign and then identify the Key Performance Indicators that will tell you, over time, whether you’re getting there.

Four kinds of applied metrics

While companies want to talk about their social media ROI, they really need to focus on identifying KPIs that map to business objectives.

Francis laid out four kinds of applied metrics that you should be focusing on in your metrics program:

  1. Brand perception: “It’s why Visa sponsors the Olympics and why Coca-Cola sponsors the Special Olympics,” she said. “It’s why you’re on Twitter.” It’s about maintaining or enhancing your brand’s reputation, perception and visibility. So you measure KPIs that inform factors like customer satisfaction score or likeliness to buy.
  2. Marketing efficiency: You should be look at your website, optimize for SEO and study where your traffic is coming from: Twitter, Facebook, blogs. (Twitter, I’ll add, now drives more than 10 percent of the New York Times’ traffic. Facebook drives at least 13 percent of MSN’s and Yahoo’s traffic.) Study your analytics. “You’ve got to have a web analytics tracking system on your website,” she said. “It’s all about reach.” And that means you may need to track the “little ticky-tacky metrics” that add up to painting a fuller picture.
  3. Continue reading

August 12, 2010

Social media’s return on investment

social_media_monopoly
Image from Bite Daily.

 
Ayelet NoffHow do you measure the ROI of social media? This is a question that we are often asked by companies that want to enter the social media realm but are afraid or unsure of how to prove its success to their superiors. Want to show your bosses that social media works? Below is a great video from Erik Qualman (@equalman) at Socialnomics that showcases several social media ROI success stories.

Here are the top 10 facts you should remember from this video:

1) Gary Vaynerchuk grew his family business from $4 million to $50 million using social media.

2) Wetpaint/Altimeter found companies that widely engage in social media surpass their peers in both revenue and profit. (See Ranking the Top 100 Global Brands — PDF.)

3) Lenovo has experienced a 20% reduction in activity to their call center since they launched their community website for customers.

4) Burger King invested  less than $50,000 in their Whopper Sacrifice Facebook application and received an estimated return of over $400,000 in press/media value. They received 32 million impressions as a result of this campaign.

Ford-Fiesta-RS5) Blendtec quintupled sales with its “Will it Blend” series on YouTube.

6) Dell has already made $3 million in sales via twitter (I’ve heard this number has already increased to $6.5 million).

7) Only 18% of traditional TV campaigns generate a positive ROI.

8 ) 37% of generation Y heard about the Ford Fiesta via social media before its launch in the US. 25% of Ford’s marketing budget is spent on digital/social media. They are the only US auto company that didn’t take a government loan. Continue reading