Jessie Paul on Services Marketing For a FlatWorld

Tuesday, May 18, 2010

Separating the Stuff from the Fluff (via

Assuming that social media is right for you, you probably want to know how to measure its effectiveness. Marketing metrics are always a contentious issue, but in the case of social media it is further complicated by the newness of the media, absence of standards, and plain ignorance. For example, 41 per cent of those surveyed in a 2009 study conducted by US-based firm Mzinga-Babson Executive Education were not even sure if the social media they use can support measuring ROI.
At this point I think I should make a clear distinction between ROI and metrics. Social media makes it very easy to track data. The challenge – as always – is how to make sense of that data and connect it to impact. Measurement and impact are also tightly coupled with the expectation of the media, so it makes sense to structure this discussion along that dimension.
Observers: Hello, World
This is usually at the early phase of adoption where the company is first trying to understand what is the external perception and who is interested in them. As Ankur Anil of Serena Software which dipped its toes into social media marketing two months ago says, “We measure headlines and summaries of social media hits, number of search results per day by region and time, search term, search category, popularity, network analysis (Wikipedia, Linkedin, Twitter).”
Metrics here are similar to those used in old-school PR - number of mentions, reach, sentiment, share of voice. Free tools such as Samepoint, Socialmention can help you listen in on conversations.
This can be a powerful way to learn what customers want from you. Since this is primarily a listening post functionality, ROI should be evaluated in the same way that you would a customer service hotline or satisfaction survey.
Digital Salesperson: Leads, leads, leads
Here social media is being used almost exclusively as a lead generation tool. This is typically the entry point into the social media landscape. It allows the company to gain comfort with the media, while providing quick data to justify ROI and further investments. This includes both outbound (push) and inbound (pull). Social media is more effective at pull with a Hubspot survey finding that companies that spend 50 per cent of their budget on inbound marketing experienced a 61 per cent lower cost per lead than outbound oriented organisations.

In this case, the data measured is cost per lead and/or cost of revenue generated through this medium. Typically the cost is only that of cash spent, and does not factor in effort – that should be done as labour costs are pretty high in social media.
Connectors: Let’s Get Engaged
The program is intended to create a touchpoint, or engagement with the customer as opposed to generating a sale. For example, Dell, which is one of the few companies to publicly state its revenue generated through social media ($6.5 million) is using that media to highlight its green philosophy with its Dell Go Green campaign Competitions, events are being used to create awareness and excitement around the concept. When asked about metrics, the team says, “Since we are an ideas contest our baseline metrics include: Number of ideas submitted, number of registrations, number of votes, and number of comments. We also track all the metrics provided by Google Analytics. For our presence on Facebook we track: Number of fans, number of interactions (likes, comments and wall posts by fans). For Twitter, we are only tracking number of followers and mentions.”
Integrators: Social Is Just Another Media
Companies that view ‘social media’ as a new category and look for ways to explore it are likely to be in one of the above slots. They will measure the metrics, but it is very hard to show true business impact, and it is shame to be locked into these boxes by the pursuit of numbers.
A more evolved approach is to take the company’s business strategy and see where social media can be applied. Social media then becomes a tool to execute the company’s vision and is tightly aligned with business goals, and hence more impactful. While Dell is well known for having embraced this approach, closer home Ching’s Secret has integrated Facebook into its marketing strategy, and Tata Tea’s Jaago Re used digital media effectively in conjunction with traditional media.
Rob Leavitt of Solutions Insights, a consulting firm, says, “Some of the more advanced companies are trying to get more strategic with social media metrics, and are looking at things like: Competitive insight, New opportunities, Cost avoidance (for example if using social media for customer service and support), Employee satisfaction.”
I would also factor in the cost of not being available on a channel that customers frequent, or worse allowing negative conversations to take place without any intervention. The tools for this are evolving too – LinkedIn recently launched a feature which allows you to “follow” a company – so you can find out who is joining (or leaving) your competitors, news articles, etc.
The metrics for social media ROI are similar to that for traditional media. The bigger driver for ROI is whether the social media strategy is aligned with the business strategy.

This blog post was written for and first appeared at


Anonymous said...

Great article and very catchy title.

Anonymous said...

Hi Jessie. Very interesting article. i found the example of Ching's Secret facebook activity very pertinent. Awesome how cos r leveraging social media. US ofcourse has gr8 examples in dell, starbucks and dunkin donuts. Nice to have a chings Case study in india

Samba said...

Wonderful article. One of the points frequently missed in the analysis of social media as a marketing platform is the difficulty in recruiting loyal fans/followers. Whether we marketers like it or not, it involves very creative spamming. This spamming is not the same as mass emails and SMSes. These are hand crafted, customized for almost every user and most importantly personal, even if targeted at strangers.

One of the things we need to understand is the fact that social media is very different from newspapers, TV channels, radio stations and even internet portals. People do not use social media to consume content generated by media houses/corporates. They use it to communicate/connect, make their own statements, react to those made by their peers and indulge in self promotion. It's very self centered. Being part of market research, engaging with brands, helping brands do business with them et al. are typically not high on the user's agenda when she visits social media sites. But yeah, if she is upset with a brand, she is likely to make very good use of social media to vent the frustration out.

Does it mean that social media is useless to businesses? Heck no. It means brands need to benefit from and learn to let the user do whatever she usually does on social media and strive to be associated with this process. Or empower the user do more stuff (and stuff that she cares about) than she otherwise would. Slideshare, Reading List and Tripit on linkedin are very fine examples of this.

Unknown said...

Hey Jessie,

Have you been to your doctor recently?

Web presence of Indian doctors for keeping up with advances in medical health & reaching beneficiaries of their expertise is like tiny unseen speck in global world, which is rapidly being accessible.

Not good for you. Not good for doctors. Time to dawn.

Dr. Ashok Koparday

Audrina said...

I am starting to understand better how making money using blog works.

but it's really nice article.thanks for sharing.


Biplab Pal said...

Hi Jessie

You are absolutely right that business houses are still not upto the speed to understand the impact of social media for their PR and marketing.

I run and advice American corporates on their social media campaign-if you have time, we can discuss some business - my email :

Angelina Marshall said...

I read this article, this article very informative and interesting..I refer your blog to many of my friends as well.
Thanks for sharing knowledge..
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