Over the years I’ve been attending internet marketing events and whenever the subject of ROI and Social Media came up… the answer seemed to be…” There’s no silver bullet”. Why? Because social media is so new and every company has different goals and therefore are measuring different things. Well… fast forward to 2011 and now people, well actually Scott McAndrew from Terralever, are talking “real-life” ROI. Yes, now we’re getting down to the nitty gritty. Real projections, real measurements, and real-life case studies.
Scott McAndrew is the Vice President of Strategy at Terralever and on April 12th shared his expertise with the attendees at AZIMA. I was one of those attendees and here’s what I soaked up from Scott’s presentation.
It’s 2011 and real-life social media ROI is happening now….
Research is indicating that companies are adding social media to their line-item budgets and as that budget increases, companies want to see measurements beyond the intrinsic values. The intrinsic values, or soft measurements, such as community relationship building, direct access to customers, number of followers or likes, re-tweets and comments are still important in the mix of social media, but now CEOs are interested in conversion, increased channel sales, and revenue.
Tracking “real-life” ROI is possible, but it’s still a big challenge in the world of social media. Several complicating factors such as imperfect data or no pre-existing data, no direct access to stakeholders, unreliable data with channels such as Twitter and Facebook, and lack of measurement consensus make it tough to create and deliver a strategy for “real-life” ROI. However, in the midst of all these challenges Scott and Terralever have found a way to track it and have been successful in their endeavors. Per Scott, here are some of the common social media ROI measurements… direct revenue, earned media, cost-savings or cost avoidance for customer service, research and development, and recruitment.
Real-life case study…
In the case study of eHarmony, one of the social media channels used was Facebook. Scott and Terralever were able to experiment with eHarmony’s postings on Facebook to find the right voice and questions for the brand. Once they found the right mixture they saw a growth in interactions and thus an increase in impressions, which is an increase in touch points for potential customers. Terralever also experimented with Facebook ads; tracking conversions and cost per ‘Like’. They were able to decrease eHarmony’s cost per ‘Like’ from $10 per ‘Like’ to a couple of dollars per ‘Like’. That’s a cost-savings and tangible element of measurement. As a result of the success, eHarmony cut their TV budget to increase their social media budget. Again, another tangible item of measurement; earned media.
Tips for success…
It’s important to look at the intrinsic value and “real-life” ROI of social media. Align your strategy with goals, strategies, tactics, and measurements; then look for improvements. Put the tools in place to measure KPI’s and be open about the calculations. Check out Scott’s Presentation to learn more.
Social media is fairly new and takes some experimenting, acceptance, and reliance. As you perfect these elements, you’ll reach the point of increased reliance, increased budgets, and increased accountability and, with increased accountability comes the importance of tracking real-life ROI to prove success to your clients.