Reliance on luxury could prove expensive The Guardian http://ow.ly/2Jvr
There’s so much talk about social media that it is easy for people to become cynical, perhaps losing track of the fact that it can have a positive impact on your business.
So how can you determine whether a social media strategy is proving beneficial to your business? How do you know that it is working out for you? And is now really the best time to find out?
Rather than focusing on individual social media campaigns, I’d like to look at social media measurement from the perspective of a business that a) buys into social media, b) commits to it over a period of time, and as such c) has an integrated social media strategy. You people know who you are!
Let it breathe
The key with social media measurement, I think, is to stand back and take a widescreen approach to measurement.
Rather than focusing on the smaller, campaign-specific metrics, such as traffic from Twitter or the number of fans on Facebook, wouldn’t it be better to look at how it helps to shift the most important business KPIs, such as sales, profits, as well as customer retention and satisfaction rates?
To do this effectively, you’ll need to give your social media strategy time. Like a good wine, it needs to breathe. In doing so you will be able to look at your overall business performance, as well as the performance of your social media campaigns over the duration.
Take the Skittles campaign. I called it ‘brave’, ‘amazing’, ‘sensational’ and ‘ballsy’. I still think it is all of those things, and I’ll think that next year even if it fails miserably. It was a big move. But nobody yet knows for sure whether giving over a brand’s entire website to consumer-powered media channels is a smart move. Only time will tell.
Social media vs TV advertising
Here I want to make a small point on accuracy, and attribution. I firmly believe that if you can spend tens of millions on TV ads and make any kind of sense out of that investment, in terms of TV ads helping to boost sales while increasing the key brand metrics, then you can make sense of your (much smaller) investment into social media.
TV campaigns can run for a long time, and the effects on the business are a) not known immediately and b) possibly overstated. Hindsight is a beautiful thing, and advertising executives (and creative agencies) like to take credit for improving sales, when really these sales might have little or nothing to do with TV ads. Attribution is one thing, but knowing that something works is entirely different. Social media appears to be a mixture of the two.
Maybe we can create a model for scoring the performance of social media, or for splitting up attribution by channel, but the truth is that there needs to be some room for manoeuvre when making sense of things. There are few absolutes in measuring advertising campaigns, if you work outside of paid search. You can far more accurately measure social media than you can a TV ad, but like TV advertising, or PR for that matter, there has to be some scope to play around with attribution.
Like TV advertising, social media will play a role in moving brand metrics, and perhaps more so (it is easier to make a noise and to be socially active; there’s an anytime, anywhere factor at work here. And hey, shit sticks around longer when you throw it online). There is a huge viral factor with social media sites (behold ye retweeters). You can really see word of mouth in action on social media sites, and as such there is less guesswork involved when measuring the results – less extrapolation is needed. If 500,000 consumers start saying good things about your brand, with few dissenters, then surely it is fair to say that brand favourability will have improved?
If brand indicators matter, or if you subscribe to the AIDA model, or if you care enough to undertake research to find out your own brand metrics (PDF), then by all means factor in your social media efforts when attributing the success of your overall marketing campaigns.
Take a snapshot
Before you start the clock it is a good idea to benchmark where you’re at…
- Make a note of the obvious numbers (number of Facebook fans, Twitter followers, Digg links, Delicious bookmarks, and referrals from social media sites, plus existing website traffic).
- Make a note of the less obvious benchmarks (such as SEO rankings and referrals, customer satisfaction scores and other business data).
- Make a note of ROI benchmarks. How much are you paying to acquire customers via other marketing channels? How vast is that advertising budget, and how is it being split up? And what proportion is being directed into channels that you cannot accurately measure?
After that make sure you’re doing the right things. There are lots of social media experts handing out lots of advice for free. There are all manner of social media agencies out there that will help you, if you don’t have the appetite to do this in-house. And there are sites devoted to measuring social media. Get some, get some.
Measuring the effects of social media in 10 steps
This is one of the more obvious ways of measuring social media. Remember that quality often beats quantity, though not always (as many CPM-focused publishers will surely testify).
Participation is a valuable indicator for many publishers (and brands). It says something about the kind of traffic you are attracting. Remember that an engaged customer is a highly valuable one. Interaction can be anything from leaving comments, to participating in support forums, to leaving customer reviews and ratings. It can happen on your website and on other websites. Keep your eyes and ears open!
We at Econsultancy are tracking sales from organic Google referrals and also paid search. It didn’t seem like much of a leap to track other channels, such as Twitter. Try it. Dell did, and discovered that it made $1m from Twitter in 18 months. Blendtec’s ‘Will It Blend?’ campaign on YouTube helped to drive “a five-fold increase in sales”.
Some companies simply cannot process sales online, because their products or services do not allow for it. For example, the automotive industry, which tends to measure the effects of its online ad campaigns by the amount of brochures requests, or test drives booked in (as opposed to car sales, which is, in marketing terms, an altogether more macro effort). B2B operators are in a similar position. If you are a consultant and spend time interacting on LinkedIn Answers then there’s a way of tracking that activity to enquiries about your services. The same applies across the spectrum of social media sites. Choose your weapon, thought leaders.
5. Search marketing
The SEO factor cannot be understated. Social media can be far more powerful in this regard than you might initially imagine. For example, a well-placed story / video / image on a site like Digg will generate a lot of traffic and a nice link from Digg itself, but the real win here is that it will generate a lot more interest beyond Digg. Bloggers and major publishers are following Digg’s Upcoming channel to unearth new and interesting stories (Sky News now has a Twitter correspondent). One link and 20,000 referrals from Digg might lead on to 40,000 referrals and 100 links from other sites. The long tail, in action. 100 links means that your page might well wind up being placed highly on Google, resulting in lots of ongoing traffic. Remember too that you can use sites like Twitter and YouTube to claim valuable search rankings on your brand search terms (‘social search optimisation’).
6. Brand metrics
Word of mouth and the viral factor (inherent in sites like Twitter, Facebook and Digg) can help shift the key brand metrics, both negatively and positively. These include brand favourability, brand awareness, brand recall, propensity to buy, etc. Expensive TV ads are measured in this way, so if these metrics are good enough for TV then they’re surely good enough for the internet? Positive brand associations via social media campaigns can help drive clicks on paid search ads, and responses to other forms of advertising. We know that TV ads boost activity on search engines, resulting in paid search success stories, so I’d bet that social media can do the same.
The nature of public relations has changed, forever. The last five years have been largely about the traditional PR folks not really being able to figure out the blogosphere. But if PRs cannot control the bloggers, then how on earth will they handle consumers? The distinct worlds of PR, customer service, and marketing are fusing. Twitter means everybody has a blog these days, and somewhere to shout about things to their friends (and beyond). Social media sites are the biggest echo chambers in the world! In any event, if you can measure PR (beyond adding up column inches and applying a random multiple to the equivalent size on the rate card!), then you can measure social media.
8. Customer engagement
Given the prevalence of choice, and the ease with which consumers can switch from one brand to another, customer engagement is one of the most important of all metrics in today’s business environment. Engagement can take place offline and online, both on your website and on other sites, particularly social media sites. Customer engagement is key to improving satisfaction and loyalty rates, and revenue. By listening to customers, and letting them know that you are listening, you can improve your business, your products, and your levels of service. The alternative is to ignore customers, which sends out a terrible message. Our research found that an engaged customer will recommend your brand, convert more readily and purchase more often.
A positive side effect of increased customer engagement – assuming certain other factors in play work in your favour – is an increase in customer retention. This is going to be a crucial factor in the success of your business in the years to come. Make no bones about it: we are moving into an age of optimisation and retention. Watch your retention rates as you start participating in social media. Over time, all things remaining equal, they should rise. Zappos, which is a case study in how-to-do-Twitter (and active on MySpace, Facebook and Youtube), is closing in on $1bn of sales this year, and “75% of its orders are from repeat customers”. Go figure, as they say.
If you can reduce customer churn, and engage customers more often, the result will surely be that you’ll generate more business from your existing customer base (who in turn will recommend your business to their network of friends, family, and social media contacts). This reduces your reliance on vast customer acquisition budgets to maintain or grow profits. It makes for a far more profitable and more efficient organisation. I really hope that more businesses will find a better balance between acquisition and retention, sooner rather than later, from a resourcing standpoint. Too many acquisition strategies appear to be ill-conceived, are not joined up (both in terms of marketing and also operations), and as such are ripe for optimisation. Plug the leaky bucket and you won’t need to turn the tap so hard to top it up. And remember that old adage about it being cheaper to keep existing customers than to seek out new ones.
Agree? Disagree? What did I miss? Let me know in the comments below…
By Michael Calore 12.30.08
Every year, we see scores of innovations trickle onto the web —
everything from new browser features to cool web apps to entire
programming languages. Some of these concepts just make us smile, then
we move on. Some completely blow our minds with their utility and
ingenuity — and become must-haves.
For this list, we’ve compiled the most truly life-altering nuggets
of brilliance to hit center stage in 2008: the ideas, products and
enhancements to the web experience so huge that they make us wonder how
we got along without them.
Nitpickers will notice that a couple of these technologies arrived
two or three years ago. Others aren’t even fully baked yet. But each
innovation on our list reached a level of maturity, hit the point of
critical mass, or stepped in to fill a burning need during 2008 that
resulted in it significantly changing the landscape of the web.
Here’s to the technologies currently making the web a better place than it was 12 months ago.
Few things carry more value than your digital identity, and yet most
web users have only a tenuous grasp of it. That’s because on the social
web, identity is no longer just who you are. It’s who you know, how you
know them and how much you want them to know about you. On the web,
your identity is explicitly tied to your relationships, both with your
friends and with the websites you visit.
These ID systems all offer a way to take control of your social
capital, that cache of “friend data” you carry with you as you sign up
for and use different web services. They also all offer a more tangible
advantage — an easy way to log in to any website using one set of
credentials. You get one virtual ID card that gives you access to
hundreds of websites. As a bonus, you don’t have to go through the
painful process of filling out a profile and adding or approving
friends on every new blog, community or social network you want to join.
The end of 2008 saw a flurry of activity around identity. Facebook
Connect, which currently lets you log in to a few dozen high-profile
websites using your Facebook ID, went live
the first week of December. Google’s Friend Connect and MySpace’s
MySpaceID, similar systems that aren’t yet as widely adopted, launched soon after it.
There’s a hitch, though. Facebook Connect, while elegant and easy to
use, is built on proprietary code and isn’t compatible with the
offerings from Google and MySpace, which are built using OpenID and
other open source standards.
We should expect this battle for your personal data play out over
the next year, maybe longer. But 2008 will be remembered as the year
that identity stepped into the spotlight.
One of the most important technologies on this list doesn’t fully
exist yet — HTML 5 — but in 2008, key features started to trickle out.
will eventually replace HTML 4.01, the dominant programming language
currently used to build web pages. But the governing bodies in charge
of the web are still drafting the details, and nobody expects HTML 5 to
fully emerge as the new standard for at least a few more years.
But HTML 5 is no vaporware. Many of the changes to the way the web
operates as outlined in early versions of the new specification are already being implemented
in the latest browsers, and some of the web’s more adventurous site
builders are already incorporating HTML 5’s magic into their pages.
HTML 5 will be great step forward, standardizing things like
dragging and dropping elements on web pages, in-line editing of text
and images on sites and new ways of drawing animations. There’s also
support for audio and video playback without plug-ins, a boon
for usability and a worrisome sign for Adobe’s Flash, Microsoft’s
Silverlight and Apple’s QuickTime. The language will also give a boost
to web apps, as there are new controls for storing web data offline on
your local machine.
Want Gmail on your desktop? HTML 5 makes it possible. Alas, the blink tag isn’t invited to the party.
A new breed of social app has arisen to help us manage the mess of information overload — the lifestream.
Not long ago, keeping track of your friends on the internet was
pretty easy. Everyone belonged to Friendster or MySpace and that was
it. Now, the web is littered with thousands of social sites, each with
its own special purpose — Flickr for photos, Last.fm for music, Twitter
for tweeting. Even the most rudimentary services are tied to the social
web. Renting a movie, buying a book or writing a blog post? Let all
your friends on Netflix, Amazon and Blogger know about it.
Keeping tabs on your friends now is all too easy and all too much, all at once.
Sites like FriendFeed, Plaxo Pulse and Digsby
serve as social-network-activity aggregators. They’re like virtual
funnels. Dump in all the notifications, feeds and updates from your
various networks, and the services will bring it all into one master
stream, relieving you of the responsibility of visiting a dozen or more
sites to learn what your friends are up to, what they’re listening to,
who they’re snogging and so on. Controls let you dial back the flow by
sorting and filtering the flow, pruning it down to only what matters
Many such services have emerged, but FriendFeed, an elegant and simple site designed by a crew of ex-Googlers, is our favorite.
Oh, and don’t expect to be able to add Facebook to your lifestream.
The network lets all sorts of data in, but precious little out.