In 2010, as per Pingdom, Twitter added 100 million new accounts; for Facebook, it was 250 million new people. About 25 billion tweets were sent out last year, whereas 30 billion pieces of content are shared on Facebook every month. These are just a few indications of the growth that the social media sphere is witnessing.
What becomes inevitable with such a growth of social media is its use by enterprises. And as all businesses would demand, the whole practice and the results of the spent budget needs to be ‘quantifiable’. This has lead to the keywords turning into metrics. Terms like ‘engagement’, ‘participation’, ‘involvement’, ‘fans’, ‘followers’, ‘likes’, ‘retweets’ are all now presented in graphical forms so that marketing decisions can be made based on these.
The objectives for social media programmes
As Brian Sollis of FutureWorks mentions in his post and I quote him,
Business leaders simply need clarity in a time of abundant options and scarcity of experience and answers. As many of us can attest, we report to executives who have no desire to measure intangible credos rooted in transparency and authenticity. In the end, they simply want to calculate the return on investment and associate Social Media programs with real world business performance metrics.
The objectives of each and every social media campaign varies. One can be for driving sales, where as another can be for spreading awareness or for handling customer feedback. The marketers may not focus on ROI of each initiative and keep in mind the business objective which would also than merge with the objective of their social media program. Though, it does get simpler than anything else, if the objective is just customer acquisition.
Measurement as per objectives
Considering a brand uses the social platforms to turn potentials into customers, the budget can be allocated as a percentage of the Customer Lifetime Value. As per an article by Jamie Turner of 60 Second Marketer, the basic approaches like allocating budget as percentage of Customer Lifetime Value work just fine.
For example, an average customer for a soft drinks brand X spend Rs. 150 on its products per month and stays loyal for an average time of 2 yrs, the CLV will come to: Rs. 150*12*2 = Rs.3600.
As per this figure, the brand can easily decide an amount for its digital and social media spending, relying on the percentage of customers who are also fans and followers on social networks.
But the calculation is not always this easy. When it comes to creating a buzz or monitoring the casual dialogue about your brand amongst stakeholders, quantitative or qualitative measures can both be used to limited extents.
The need for a brand can be something like getting more inbound links to the brand’s site from platforms like Twitter, or to analyze the tonality of conversations from the comments on a corporate blog. The whole purpose is to find a measure for every activity on the space, but the complete quantification in terms of unique visits, page views, bounce rate or growth in number of followers is not always advisable.
Also the metrics are usually different from the other terms used in conventional marketing. Last year, a claim by McDonalds about their Foursquare strategy created quite a controversy. The initial news was that the promotions on Foursquare in April had resulted in an increase of 33% in footfalls. The actual story being the 33% growth was in Foursquare check-ins not actual footfalls!
Expectations of Indian Brands
In India however, the brands and agencies have a goal-oriented view of ROI. As per the India Social Media Survey Report 2010, the percentage growth in number of participants matters most to marketers, while factors like co-creation or increased engagement have much lesser significance.
While the focus on lead generation and ecommerce opportunities are gradually increasing, we hope to see much result driven approach from the brands’ social media teams this year. More importantly, a more systematic ‘measure’ of that result would be required at this moment.