Below is a synopsis of my talk sitting on a panel at Joseph Thornley’s well organized and attended Third Tuesday Measurement Matters conference in Toronto:
I think that there are a number of things that social media does pretty well, including promote advocacy, provide customer support and inspire innovation, but the metrics are still too fuzzy and not closely connected enough to business performance to substantiate increased investment. Too often social media measurement results in information that’s “nice to know” rather than “need to have”.
Don’t get me wrong, I think there is still merit in measuring social media against each of these objectives, but until business can draw a straighter line between social media and ROI, specifically in the form of sales and profit, social media will remain a small line item on the marketing budget. There are three lines that matter in business, top, bottom and expense line, and right now social media has only really proven itself at contributing to the expense line, when used for customer service and crowdsourcing initiatives..
Not too long ago, I was approached by a senior client and he asked me if there were any industry benchmarks that would give him perspective on whether having 10K fans on Facebook was good, or not – particularly in light of the fact he’d already spent thousands of dollars in media in order to attract that fan base. Now I know that there’s been a few studies around the value of a fan, and how Facebook fans tend to be loyal and buy your brand more often – but I was having a hard time looking him squarely in the eye to try and convince him of these findings, particularly when they were so divergent. It’s probably because he would probably feel equally uncomfortable standing in front of his CFO citing the same numbers.
There needs to be more direct, causal link between online chatter, followers and fandom with sales. That’s why I am very interested in the notion of social commerce – essentially the linking of social media and e-commerce. Initiatives that effectively leverage the power and connectedness of social networks to drive the top line is what I think will substantially legitimize social media. Then marketers will have concrete evidence that their investment in social media is actually paying off, even if the dollars are small at first, there will be some direct linkage between having a fan base and metrics that truly matter to business.
Until then, as a measurement industry we will need to concentrate on enhancing its measurement capabilities – moving beyond tracking mention activity and brand sentiment, getting into more detailed aspects of social media data. I personally believe and have been selling solutions that provide clients a perspective of what people are talking about – using text analytics solutions to derive meaning out of aggregated posts online, tracking things like purchase intent, or more specific topics relating to brand and product attributes.
Short of being able to track commercial activity, I think the standard needs to be about what consumers are actually talking about – getting to the meaning of the conversation, rather than a 50 000 foot view of online chatter. Then ultimately, when social commerce takes hold, we can start providing concrete linkages between things like purchase intent with conversion, which is all business really cares about anyway.
