Understanding Social Media Metrics: Basic Modeling

Why are Social Media Metrics Important?
- Deciding if Social Media is Good for You
- Estimating Effectiveness of Social Media
- Creating Measurable Success Goals
Understanding the Fundamentals Behind Social Media
- Charlene Li Video
- Related Reading
Required Information and Variables
- External Variables
- Internal Variables
- Outcomes
Creating a Basic Model
Related Social Metric Patents
- Social Analytics System and Method for Analysis
- System and Method for Measuring Business Transformation Impact Using Social Network Analytics
- System and Method for Optimization of Viral Marketing Efforts
- Method and System for Analyzing User-Generated Content
- Social Network-Based Internet Search Engine
Further Reading

Disclaimer: This is a very rough model for measuring social media. I simply put together my initial thoughts on the idea, and leave it open for others to add on to. Econometric model, although interesting, tends to be more difficult than many realize. Take this post as just a beginning in what must change. None the less, creating a model for social media is needed and I hope that one evolves from this.

Why are Social Media Metrics Important?

Creating metrics for social media is like finding the holy grail. Most Internet marketers have been spoiled, being able to quickly and easily determine if their SEM campaign is working. Being able to track a consumer from ad to sale is the cornerstone, and one of the greatest reason many are willing to advertise on the web

Social media changed that. It’s pushed us a step back when we consider analytics and tracking. How do you measure buzz? How do you consider interaction and ROI? How do you estimate the success or potential success of social media?

What we, as intelligent marketers, need in the end is an econometric model that allows us to use multiple variables to determine the outcome of our social media campaign.

So how do we do that? What do we need to know? and is there already a basic model?

Deciding if Social Media is Good for You
With a social media model, a metric and measurements, we can decide if social media is worth it for companies. Keeping that in mind the model must include as inputs, monetary resources, human resources, brand demographic, current brand loyalty, and reach.

These variables are going to be unique to each company, and not dependent on external forces.

Estimating Effectiveness of Social Media
Once we have the variables that are dependent on the company, we need to remember external forces.

This includes the overall effectiveness of word of mouth. Consider that most people say that now the idea of recommendation marketing, is more effective than TV advertising. Our model has to take that “effectiveness”, or consequently potential distrust of advertising into account.

Other external variables may include, competitive use of social media, technical ability of demographic, and overall ease of sharing.

Creating Measurable Success Goals
The other side of the equation is what we call the success goals. In my mind success boils down to two things: ROI and engagement.

ROI is simple to measure, it’s simply money. Engagement, however, is not an intuitive measurement. This variable will evolve with the formula.

Understanding the Fundamentals Behind Social Media

Before we can begin measuring it, we need to understand it. The following resources should give a primer course on Social Media.

Charlene Li Video
Charlene was invited to Google to talk about her best-selling book Groundswell. She spoke about the basics of social media and everything you need to know about creating a two way conversation with consumers.

Required Information and Variables

Now that we know what social media is and have a rough idea of what the variables are let’s begin listing them.

External Variables

Social Media Effectiveness – A:
This is an index, that measure the general populations view and use of social media. Much as TV advertising is not looked down upon, since social media is currently considered to be effective we have to show this in the formula.

Economic Well Being – B:
The over-all economic well being is important as it refers to the likelihood that someone is going to buy something. As the economy gets better, advertising becomes more effective.

Demographic Size – C:
The overall size of the demographic has to be taken into account because it determines how many people are going to the product, and how many people can share information.

Ability to Share – D:
An index of how many ways the consumers can share information. Whether it be things like Facebook, Twitter – the average user has more opportunities to engage in word of mouth marketing and this must be factored into the formula.

Internal Variables

Human Resources – F:
The amount of people able to work on the project equates to a more successful campaign, to a degree. Companies need to invest human capital and this variable emphasizes that.

Monetary Capital – G:
The Investment in social media can make a program more or less effective. Similar to the human capital – monetary capital is only effective to a degree.

Current Community Size – H:
Since the formula must be able to update overtime, it’s important that it take into consideration current information. The current community size is important since the larger a fanbase the more likely for things to be shared, and more likely the success of a campaign.

Brand Demographic’s Likelihood to Share – I:
Although we considered the overall likelyhood to share of people as a whole, it’s important to understand that different demographics share differently. This variables takes into consideration the technical ability of the brand’s demographic.

Outcomes:
Return on Investment – J:
A monetary figure that signifies the number of money made through conversions from a social media campaign.

Engagement -K:
An index that measures the number of interactions between consumer and brand. For some brands, a higher engagement index is more important than ROI.

Creating a Basic Model

Once we know which variables are important, and which variables effect each other, we can create a basic model. Here is my initial try at it, with no testing to prove its effectiveness.

We add each variable, with a coefficient since each are a ‘part’ of the formula. However, Social Media Effectiveness, and Ability to Share are multiplied to create an overall social media index.

Human Capital and Monetary Capital are a logarithmic function because of their ineffectiveness after a certain level.

Also, we multiple the Current Community Size and their Likelihood to Share to create an over-all Current Share Index for the Brand’s Demographic.

Obviously this is a rough idea, and hopefully people will add on to it, and over-time test it.

Related Social Metric Patents

Social Analytics System and Method for Analysis

Abstract:
Conversations in an online content universe are monitored. A social analysis module analyzes individual conversations between publishers in the online content universe. Publishers that influence a conversation are identified.
Patent Link

System and Method for Measuring Business Transformation Impact Using Social Network Analytics

Abstract:
A system and method (and method of deploying computing infrastructure) of a system, method, and framework for measuring the impact of a collaborative activity, or set of activities, based on social networks and attributes observed before and after the collaborative activity.
Patent Link

System and Method for Optimization of Viral Marketing Efforts

Abstract:
A system and method for improving the performance of a viral marketing program develops a plurality of trials of a viral marketing program having a business objective with each trial having a plurality of attributes at least one of which differs from an attribute of the other of the plurality of trials, exposes a first plurality of users to a first trial and a second plurality of users to a second trial, collects data indicative of the users response to the trial to which they were exposed that is reflective of the likelihood of the trial obtaining the business objective, compares the data to identify a trial more likely to achieve the business objective than a non-identified trial and continues to utilize the identified trial in the viral marketing program while ceasing use of a non-identified trial.
Patent Link

Method and System for Analyzing User-Generated Content

Abstract:
A method and system for collecting and analyzing data found across multiple sites on the internet or stored in a self-contained or pre-loaded database, is disclosed which captures, extracts, analyzes, categorizes, synthesizes, summarizes and displays, in a customizable format, both the substance and sentiment embodied within user-generated content, such as comments or reviews, found across such sites and/or stored within such databases.
Patent Link

Social Network-Based Internet Search Engine

Abstract
Filtering Internet content includes receiving a search query message comprising a search query to an Internet search engine. Data is received from the Internet search engine, responsive to the search query message. Filtering of the data produces a data subset. The filter selects data for inclusion in the data subset based upon occurrence of the data in a database. The database includes content selected for inclusion by designated users. The data subset is displayed in a browser.
Patent Link