Obviously I’m a huge fan of social media. I know it has the power to revolutionize how we market to consumers – in fact it already has. As powerful as it might be, it has a major shortcoming: tracking.
Tracking is a major issue because right now, we really can’t quantify the power of social media. We’re able to identify a community, show pages with large numbers of fans, and create campaigns with interaction – but how does that relate to sales? Sales is the only metric that matters, everything else is just a potential indicator.
The Problem With Indicators
In social media, the most common indicators we use tend to be engagement metrics. The hope is that if a user is going through the site or returning more often than they must be part of the community.
On Facebook and social media sites, we look to fan counts and interaction. Examples include comments and retweets. These are supposed to indicate a growing and more dedicated community.
On the surface that seems fine. But these indicators only look at the top level of interaction.
These questions remain to be answered: How often does someone in the community buy a product? How much did we spend on social media marketing for each consumer?
Why We Can’t Track Social Media
Whenever I tell clients that we can’t actually track social media, they look at me like I’m crazy. It’s true, seriously.
I can’t attribute Facebook to a sale unless the user clicked through from Facebook and bought a product. But, how do you attribute Facebook’s branding impact on the sales funnel?
Without being able to track each consumers interaction on Facebook and Twitter, we’re unable to determine who bought and why. You can’t tag users when they visit your social media profiles (something you can do on your own site).
At first the thought is, who cares if you can’t track it directly. We know that social media has an effect; we’ve seen sales go up since we’ve introduced social media campaigns. But not being able to directly attribute a specific sale to social media, creates other problems.
Forecasting Becomes an Issue
Right now if you want to start a social media campaign, you need to take a complete leap of faith. You have to hope that you have dedicated enough resources without spending too much.
Since we use indicators right now and are not using the actual sale metric, forecasting returns on campaigns becomes messy.
Imagine the following scenario: You’re building a social media campaign that incorporates user-generated content. The site is almost complete, when your developer comes back to you and asks you if you want it to be embeddable on Facebook. The cost of adding this functionality is $1,000. Is it worth it?
The only indicator that you could use right now would be the number of sales that occurred due to referrals from embeddable content (possible YouTube videos or previous Facebook campaigns).
But even this indicator would include a lot of noise. It doesn’t take into account the number of consumers that saw your Facebook page or just heard of the campaign.
If you simply used the indicator to determine the value of adding embed functionality, you might disregard it as a bad investment. The truth might be that the functionality is actually really important and create a high ROI. Right now, we simply just don’t know.
How Are You Projecting Return?
Armed only with indicators and little qualified data, how are you determining what is worth it and what isn’t?
I try to collect as much data as possible in the hopes of finding a true indicator – or at least a better one.
I’ve turn to marketing mix equations and econometric regressions to try and figure out what effect of each variable in the social media equation is. But so far, there just isn’t enough data.
So how are you assigning monetary value to social media marketing?
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{ 9 comments read them below or add one }
You are talking about two different pieces of Social Media, one is a branding function and the other is a component of strategy, tactics and deployment for conversion which is directly attributable to ROI and very easy to track.
Justmeans is a social media platform with tracking/metric tools. Justmeans members have access to the back-end tools of the website, which allows them to upload content (videos, press releases, podcasts, etc) onto Justmeans. They also have the option of distributing the content to Facebook and Twitter. With the tracking tools you can compare how many unique and total impressions each piece of content gets on each platform over a period of time. This data would be helpful in creating an effective marketing strategy and connecting to social media marketing campaigns to sales and socially-responsible branding.
What do you think of these tools?
Samir,
This is a fairly broad question with lots of variables depending on the type of business / site, e.g. e-commerce, B-B, B-C, etc.
One way I help clients track the effectiveness of their overall social media strategy as well as individual SM campaigns is to create a “custom segment” to specifically track visitors coming from SM. More info on that here http://code.google.com/apis/analytics/docs/tracking/gaTrackingVisitorSegments.html
I also set-up “goals” to enable us to determine the value of SM right down to the actual network e.g. Facebook, Twitter, etc.
Samir
Do you think that we will see a time when we can tag from the social media profiles? You would think that the sites would have this available and maybe be an add on for profit for the sites such as FB and Twitter? Seems almost like this should have been something all along.
In the meantime, I agree faith and hoping that you did the right thing to set up profiles and interact with people.
Nice thought and insight into this never ending question. I am always asked that and I say my measurement is “If my sales are up, I am making money and having FUN” then it is working for me. Worst case scenario is I had FUN doing something that did not work.
Good Luck and Great Sales!
@Ramon_DeLeon
Domino’s Pizza Chicago
V true insights on difficulties in measuring the sales in social media setting. There can be ways of linking sales to map the buyers to the source from where they have been influenced to buy the product/service. One way might be use of coupons(ex: buyer influenced from Twitter puts a code: twitdisc to attain discount or offer whereas a facebookie enters fcbkdisc so in the sales database we ca get the estimate of the real power of the social media source which influences a buyer more… There can be many techniques where we should be able to measure sales linking it to the right source.
Samir, great post here. I think that, for now, combined with the tracking of “actual” sales or conversions that you mention, the other indicators that are of importance now can only be informal.
The indicators that I am using are total sales or conversions, website traffic, social network influence (followers, retweets, interaction) but also, and here is the kicker, how motivated and happy my clients are. In the interegnum, before really quality metrics are developed, the leap of faith loop is closed by the fact if the faith is MAINTAINED throughout a campaign.
Happiness and confidence in social media, commitment to consistency are really important and something I focus a lot on.
How is that?
Thanks for the comment Zachary! Yeah I like the idea of faith. But how do you quantify it? I still need some way to determine if my resources are giving me a return. It’s tough. Hopefully, as social media matures we’ll have better metrics.