Measuring the value of social engagement

Measuring social media’s return on investment can be a tricky issue for brands. Here, Neil Major, strategy director at Yomego, provides insight into an effective framework for measuring the value of social media.

Marketing metrics have long been the source of lively debate, as the century- old quote from advertising pioneer John Wanamaker attests: “Half the money I spend on advertising is wasted; the trouble is I don’t know which half.” The rise of the web has changed things to some extent and it is now possible to track the customer journey, from awareness to purchase, and directly attribute a cost per acquisition. This model starts with the assumption that purchase is the primary objective however – and that all visits follow a linear path. Some longer-established marketing disciplines, such as TV, radio and PR, have models in place for dealing with this conundrum. Many would argue they’re flaky, but their shelf life has afforded them a degree of validity. Social media is the latest pretender to pull up a chair at marketing’s top table. But up until now, the sector has been unable to combine behind a collective voice when it comes to ROI. It’s a tough brief, given its digital heritage: it must be measurable, scalable, observable (open), attributable, and, above all, relevant to the brand, whether you’re Marmite or Samsonite. Last summer we kicked off a process to tackle this thorny problem, adopting a social approach and working with a variety of different stakeholders from across the industry to canvass opinion and share suggestions. Clients, agencies, media buyers, industry commentators and academics have all been involved to date, and a simple and transparent framework is now within our grasp. Starting pointThe question that crops up in every client meeting is, “Yes, but what will social media investment actually do for my brand? How much budget should I commit if there’s no tried-and-tested ROI model?” The starting point of the model needed to encompass the cornerstones of all social media strategies: development of relevant content planning; identification and outreach to the most influential advocates; amplification of the reach and impact of the positive messages; and quantified value aligned with other existing ROI metrics. The Approach – The Three As1. AnalysisThe starting point of any social campaign is always to see what people are saying. The web is essentially a huge unfocussed focus group, and tools such as Brandwatch, Radian6 and Sysomos can help provide some structure to the many voices and opinions that any brand will find exist out there about them. This data is useful, but apply a level of insight and analysis and you can reveal:

• Its nature: Where are people talking? What are the key topics? What is the sentiment?
• Its depth: Are audiences truly engaged or mentioning you in passing? Is there a groundswell of loyal supporters willing to support / defend your brand? How can they be segmented and embraced to help drive third-party advocacy?
• Its focus: Finally and allied to the above is the question of whether social commentaries are talking to you (direct) or about you (indirect). How and when should the brand invite itself into the conversation?

The analysis phase helps brands assess the relative value of each interaction. Marketers instinctively know an in-depth review of their product from an influential blogger on a popular platform is more valuable than a Facebook Like. But how much more valuable? A weighting system will possibly need to be applied but we need to beware of metrics that apply an arbitrary sector-wide ‘multiplier’, like the (now widely discredited) advertising value equivalent used in the past by the PR industry. Weightings will be applied on a client-by-client basis based on their individual business model. 2. AlignmentNo two businesses are the same but there are things they all have in common. To provide a framework for discussion, the working party has identified 11 common business drivers that regularly apply. Clients would simply pick those that apply to them. The 11 can be segmented into four categories:

• Media value: These are the typical measures of many ad campaigns – awareness, reach and degree of engagement.
• Sales value: The value of social mentions can directly be applied to sales conversion if, for instance, an e-commerce client knows its traffic conversion rate. We can apply a value based on traffic derived from social media sources, either directly or indirectly. This section can also deliver a value in terms of increased customer retention if year-on-year sales data is made available.
• Growth value: Market share and share price can sometimes be the real determinants of marketing success, as assessed by board members. If attribution can be applied to social, a direct value can be applied in terms of the incremental value of the brand.
• Cost saving: Effective adoption of social media can slash costs. Some brands have saved millions by facilitating peer-to-peer query resolution so this should be added into the pot.

Intelligent social CRM can enhance the single customer view and significantly boost response rates, reducing wastage. Social is made for crowdsourcing/ R&D, so savings via co-creation and customer feedback need to be quantified and applied to the overall total. 3. AttributionSo we have relevant data, and we know what we’re measuring against. The key to establishing successful measurement now lies in an open partnership between the agency and client. The key to attribution isn’t to use an advertising equivalent value broadly applied across all campaigns but something specific to the particular circumstances we’ve scoped and campaigned within. To make this as accurate as possible, clients will need to provide access, for instance, to sales data, average customer values and ROI metrics from other disciplines. Of the four types of campaigns identified, market share or stock price are potentially harder to attribute but value can still be ascertained by using a subtractive model. That is to say when all other channel effects have been quantified, then the remaining should be attributed to social. This model is not perfect. For instance, it still equates an advertising click (eg promoted tweet) alongside an editorial click (eg retweeting a friend). But every model needs a starting point and all respected, tried-and- tested metrics have been here before. This framework needs to be interrogated and refined if social is to continue – and potentially increase – the level of support it deserves. In this article, we’ve scratched the surface. A more detailed discussion is available if you download the free Value of Social Advocacy white paper at Yomego.com. But one thing is crystal clear. The Holy Grail of social media ROI will only be achieved via a concerted and collaborative effort. Neil Major (@neilmajor) is strategy director at Yomego (@YomegoSocial). The company's white paper, on the Value of Social Advocacy, is downloadable for free at Yomego.comThis feature is part of The Drum's social supplement, published in partnership with Yomego.