Why social media deserves a smarter ROI
From the dawn of the Web, marketers have been bogged down by chasing the wrong kind of return on investment. In the early days of the Web, site owners would chase hits and try and sell advertising based on the huge numbers they would report. Of course, a hit doesn’t equate to a visit, but that didn’t seem to matter.
Alas, things are little better now. In the social media world, many marketers still have to report on useless things such as the number of followers on Twitter or the number of likes on Facebook. Research suggests that as many as 50% of big brand Twitter followers are fake accounts, while Facebook conceded this week that almost 9% of its own accounts fall into the same category.
The crowdturfing industry plays on this weakness. It sees people pay money to generate lots and lots of fake followers. You’d think it would be the seedier side of the Web that falls for this, but the evidence suggests otherwise. Mitt Romney’s Twitter account suddenly ballooned by 140,000 new followers in just two days this week, when his normal rate of increase was 2,000 per day. Digging into that suggests many were in fact fakes. And of course, earlier this year Reddit banned several big name publishers after they’d been using fake accounts to vote up their own content.
With so much fakery around, you might ask, “Why are marketers not using better metrics?” I suspect that, in many cases, marketers sell themselves short. The number of executive-level managers that engage on social media is incredibly small, and while there are clear cultural concerns over the example this sets, it also creates something of a vacuum when it comes to setting targets for social media projects. If you’re clueless about social media, then going for easy headline targets is an easy trap to fall into. Of course marketers could argue the case for more meaningful targets, but it would appear many do not.
So how do you create meaningful social media ROI?
For me, creating successful social media ROI means you need to define two elements.
- The purpose of your community.
- The financial value of that purpose.
Lets look at each in more detail.
The purpose of your community
Too often marketers decide to go onto a social network just because everyone else is. That’s not a great approach. Instead, you first need to figure out the purpose of your community. What problem will it exist to solve for your users? Is it going to be a customer service facility or somewhere you can solicit feedback from users on how good your products are? Is it somewhere for your best customers to hang out? Define your purpose and you then find something you can measure that indicates when that purpose has been fulfilled. This will allow you to record each successful iteration of your purpose. For instance, if you’re doing it for customer service, each resolved problem is one win for your purpose. If it’s idea generation you want, each great idea is a tick in the ROI box.
Once you have all of the above figured out, you can then decide which social network offers the right tools, the right environment and so on to deliver that to your customers. Don’t let the tail wag the dog though, and definitely don’t follow fashion for the sake of it.
The financial value of that purpose
OK, so you’ve figured out the purpose of your community and therefore how you can measure success in achieving that purpose. The next part should then be quite straightforward, as you’ll then have to figure out what each social win means in terms of dollars and cents. So in the example above, you should be able to determine the financial value of a successful customer problem resolution. It could be for instance that your community solves the problem for them, thus saving your customer service department money. You can determine the value of that. Add them up and you have a clear financial ROI.
If you can get both of those things right then you can begin to unearth the real value of your social media work to the company and forget forever these quite useless metrics of followers.