How to Measure Social Media Marketing Performance

social media how toEarly efforts in social media marketing have created a tremendous amount of buzz and interest, but surprisingly few case studies focus on monetization.

A recent study by Ketchum and Nielsen shows the number-one activity of social media users (online or offline) is reading blogs – even above TV!

So it’s clear that social media is here to stay, and accountable programs must be created to deliver performance and ROI. Here are 3 steps to help you get started:

#1: Define Key Performance Indicators (KPIs) and Measure Against Them

In order to hold any marketing channel accountable, there first must be a framework of metrics that can be tracked, compared to a benchmark (industry or prior program performance) and analyzed over time.  Social channels are no different.  When looking to assign accountability to social programs, the first step is to define KPIs and measure against them.  The three key components to track are:

Expanded Reach to New Audiences

Reach refers to the additional impressions that social channels provide to a program.  Reach addresses the first value of social media marketing: tapping into the power of the social web to engage previously unreachable prospects to your brand message.  In addition, reach through social channels increases a brand’s credibility as new consumers touched by social programs are being introduced by their peers or other respected “voices” on the social web. For example, the impact of a consumer seeing a friend recommend a brand as a result of a social program is much greater than seeing a static ad from the brand.

Influencer Sharing Behavior

Influencers (a.k.a. customers advocating for your brand) are essential to maximizing the viral impact of your social media programs. In order to leverage them properly, you need to determine the level of engagement between an influencer and the members of their social graph.

All influencers are not created equal. Some are exceptional at sharing a message but offer little in the way of engagement with their peers. Others generate little groundswell or buzz, but the peers they do touch take their advice.  Understanding who your influencers are within your customer base and tracking their sharing behavior are critical to optimizing program performance.


With the rise of social media, consumers are increasingly relying on user-generated content for purchase decisions.

Conversions and Monetization

Every social program must be associated with a call to action. Subscriptions to email lists, product purchases, signing up as a Facebook fan or downloading a free trial are all examples of calls to action.  In order to measure monetary contribution to business goals, the marketer must assign value to the social program’s call to action and then track the conversions.  Too often, social purists take a passive approach to program execution. The call to action need not be a sale. In fact, it could be motivating users to generate content to be added to a brand’s online community.  The point here is that a defensible value for the action must be defined and tracked.

The combination of these three KPIs (reach, sharing behavior and monetization) provides clear program success criteria and can be weighted based on a program’s objectives.  In the case of an awareness campaign, a marketer may place more weight on reach and sharing activity.  In the case of a direct response program, the opposite weighting could be applied.

#2: Create Predictable Results With Targeting

When looking at potential advocates to share a brand message on the social web, the number of friends one has on Facebook or the number of followers one has on Twitter is important, but it’s not the most important factor.  The real key to driving a predictable program is targeting.

Too often, social media programs start on the social web (where customer-specific data is scarce) and not within the CRM databases that companies have developed to provide deeper insight into their customers.   Accountable marketing programs need to be predictable, and predictability can only be driven on the social web once a brand identifies its most engaged customers and who among those are willing to advocate on its behalf.

Consider the current crisis faced by Toyota and how targeting could help drive advocacy, while a lack of targeting could be a disaster!  I am a lifelong, loyal Toyota owner.  I had my first Camry in 1996 and leased my second Camry in 1998.  In the meantime, my wife purchased a Toyota 4Runner in 1999 and another three years later.

We followed these vehicles with a Sienna Minivan, a brief stint with a certified pre-owned Lexus and finally my 2007 Camry.  I have owned no fewer than 6 Toyota vehicles in the last decade.  I love these cars; I stand ready to defend them.

As I mentioned before, marketers need to understand that all customers are not created equal on the social web, and the number of fans and followers the brand has is not the critical data point. It’s how customers feel about the brand and the relative propensity they have to share POSITIVE sentiment with their social graph.  Under the current system without proper social media targeting, Toyota is likely to ask my neighbor to advocate for the brand, who bought his first Camry last year and would love a reason to share his negative sentiment with his over 2,600 followers on Twitter and 700 friends on Facebook.

#3: Foster Viral Sharing With Incentives

Social media purists – take a deep breath before reading on.  Social media marketing is subject to the same rules and limitations as other marketing programs.  Specifically, there’s no way social media can become an accountable channel if it’s reliant on “lighting in a bottle” –type programs.  Viral activity from a set of advocates needs to be predictable. Equally important, marketers must be able to influence the social participation in their programs.  Incentivized sharing provides this level of predictability as well as an opportunity to throttle activity.

Rewarding customers for behavior, once again, is not a new concept.  Airlines, hotels, financial institutions and even coffee shops consistently reward customers for loyal patronage.  Why not apply that same logic to advocacy on the social web?  Marketers need to build bi-directional incentives into social programs. This means they reward the influencer for inviting friends to participate in a brand’s program and then reward the influencer’s friends for acting on the viral invitation.

In other words, both the brand advocate and the advocate’s friend are treated like VIPs for engaging with the brand via the social web.  Programs that include these bi-directional incentives perform two times better than those that rely solely on altruistic motivation for sharing activity. As long as marketers are transparent about the incentivized offers, the integrity of the channel is maintained while the marketer can access a dial to turn KPIs like reach, sharing behavior and monetization up or down.

There’s been real innovation in the last year around social media marketing and many leading brands have taken advantage of the wave.  In order for it to continue, marketers must introduce a program-level discipline to their social marketing efforts. The concepts above are a great place to start. Define KPIs and track at the individual and program level over time, target social programs at your most engaged customers and introduce incentives for social sharing activity.

What are your thoughts? Is your organization holding social media marketing accountable, and if so, how? Please comment in the box below.

Tags: , , , , , , , , , , , , , , , , , , , , , , , , , ,

About the Author, Ryan Deutsch

Ryan Deutsch is vice president of Emerging Media for StrongMail, a provider of online marketing solutions for email and social media. He has 12+ years of direct marketing experience. Other posts by »




More Info
  • http://www.thinktankmen.com Michael Van Osch

    Ryan – best discussion of this topic yet. So many in the industry seemingly just push forward ‘doing’ social media because ‘you’re supposed to’ without any measurement to it, justification, etc.
    Great insights, thanks.
    Michael Van Osch

  • http://twitter.com/rdeutsch Ryan Deutsch

    Thanks Michael, I am a big believer that Social Media Strategists need to push for program measurment. SoMe can drive real engagement and business value, the ability to communicate that up to the C-Suite will drive additional investment in the channel.
    Cheers!

  • http://johnhiemstra.com John Hiemstra

    Excellent summary, Ryan. We are currently developing a KPI standard for our social media consulting services that can be customized for each client, so many thanks for reinforcing our best ideas and suggesting some new ones!

  • http://marketing-strategy-management.com Ken

    Hi Ryan:
    That was a good summation and worthwhile read. I have a question: how might a provider of services, such as yourself, incentivize advocates and the advocates they propagate? Particularly as it pertains to the small business owner?
    Thanks

  • http://www.infinigraph.com Chase McMichael | InfiniGraph

    Ryan, Totally spot on and best I have seen! I put in my latest blog http://bit.ly/9p3a8T about the importance of Social Relevancy and the impact it will make on a brand relating to Social CRM. How do you measure the reach of a brand is directly related to the number of brand advocate that are connected to the right composition and how active their community is around the same industry vertical. ie. Influencers don’t equal number of friends or how many followers you have like you said . Last night was at http://smcsfsv51810.eventbrite.com/ the Social Media Club Social CRM event and a big topic discussed was authenticity around Incentivized sharing. Are you seeing there are levels to just how far Incentivized sharing can go?

    @ChaseMcMichael

  • MantisMK

    This is a very great article. As I work in the realm of social media, there is always the question of measuring success of your social media campaign. Another great article on this topic is: http://javasocialnetworking.com/why-you-need-us/measuring-success/
    Hope this helps!
    Thanks!

  • http://twitter.com/rdeutsch Ryan Deutsch

    Ken, thanks for the comment. We work with companies to create incentives based on the profile of the custoemrs they serve. Our solutions allow companies to then test these incentives to see which drive the most sharing and conversions across the social web. Here is an example of a program running today: http://mozy.com/share-pro
    -Not all programs use monetary rewards, many successful programs use self expression or Altruism to incentivise advocay.

  • steveborowski

    A lot of my coaching clients are confused about Social Media and how to measure the results. Some have hired someone to help them so I am going to forward this article to a few of them to help them understand if they are getting what they need. Thanks for your insights.

  • danjab

    Great article, but I would like to get a little more specific:
    1. How do you stat the “reach” – is it based upon number of friends in FB plus number of followers in twitter, etc? What are all the components, and exactly how are you measuring reach?
    2. How are you measuring the sharable incentives?

    I think definitions of how to collect the specific stats would help businesses immeasurably.

  • http://budurl.com/ynfr Megan Zuniga

    Great article! I just have an issue with step #3. While in theory, this is a good marketing move. What better call to action than to offer your audience with incentives. My problem is some companies do not deliver their end of the bargain. Sometimes, they just scam people into joining a Fan page without actually giving any relevant value to the customer. So, if you’re planning on doing the incentives, make sure you deliver what you’ve promised or you lose their trust.

  • http://startups.com/ juliacassidy

    @SteveBorowski I will do the same because as usual, the article is very well explained and the content is very well organized. That is actually very necessary when it comes to showing other entrepereneurs the information they need to implement these kinds of strategies.
    Even when some of the tips seem to be obvious and easy, trust me, they are not when it comes to implementing them. It is always good to read these tips.
    Thanks for sharing.

  • http://twitter.com/rdeutsch Ryan Deutsch

    Great Questions danjab.
    1. Reach is equal to the number of friends, followers, etc. of the Influencers that actively share a brand’s message. We break Reach into two distinct audience segments: Direct Audience: This is a brands direct followers (likes, followers, etc.) and Extended Audience: This is equal to the friends and followers of only the ACTIVE influencers in a brands direct audience. So, If Acme Co Tweeted an offer to thier 2,000 followers and 100 of them retweeted, extended reach would be calculated as the total followers of the 100 Influencers that retweeted. The same would apply to Facebook, email forwards, etc.
    2. StrongMail has a tool called Influencer that allows us to track sharable incentives and thier impact on the social program. Watch the two Influencer Videos at http://www.strongmail.com/social-studio/free-trial-offer.php for detail. You can get through both videos in under 5 minutes.

  • http://twitter.com/rdeutsch Ryan Deutsch

    Megan, I could not agree more. In fact, I think many firms have forgotten that it is the customer expirience that really drives social media success. Have a read of a Blog I recently posted on the subject here: http://www.mediapost.com/publications/?fa=Articles.showArticle&art_aid=128180

  • http://www.citycliq.com/ CityCliq

    Great article! I especially like the description of a “bi-directional incentive” plan. Makes total sense, thanks!

  • Russ Harmon

    Very good article and insights. SM campaigns are truly different in ROI as many marketers need to take the view of measuring ROI from “engagement” first and then ultimate conversion later. The KPI’s you describe will certainly help set the measurement for grading a campaigns success both in the short term and long term.

  • danjab

    Hi Ryan,

    I guess I have to improve my profile, because all my contact info didn’t show up. I’ll just sign this a little better.

    Regarding Reach, are you actually calculating the friends of the fans? Is there some tool that does that?

    Will watch the videos for sure.

    Thanks!

    Dan Jablons
    Retail Smart Guys
    http://www.retailsmartguys.com
    dan@retailsmartguys.com

  • http://phonemarketinginsider.com Rocky Brody

    Thanks Ryan for a great, informative post. As the blog editor of Phone Marketing Insider, http://phonemarketinginsider.com, I find that the greatest challenge comes in the third tip, of offering incentives to foster viral sharing. I experience the concept of rewards for being a good customer at my own local coffee shop all the time in a very natural and informal way… such as offering my kids a small cookie or splitting a drink into two small cups (which they don’t officially offer on the menu. But when it comes to social media, I find that the incentives and rewards seem less natural. Programs like giving away prizes for blogging contests, etc. seem much more like bribery than natural recognition and reinforcement for one’s loyal followers. What concrete actions would you suggest to bridge the concepts of the local coffee shop into the world of social media? Looking forward to hearing from you. Thanks.

  • Heather Dougherty

    Great post. One of the few that provide truly actionable advice. Earlier this year, two other great minds in Social — Jeremiah Owyang (Altimeter Group) and John Lovett (Web Analytics Demystified) — put their collective minds together to create a social measurement framework which is similar to what you’ve outlined in this post. Their hope is that it will be widely adopted and serve to standardize social measurement to increase its business validity. You can download it for free here: http://www.slideshare.net/jeremiah_owyang/altimeter-report-social-marketing-analytics (27 whole pages of measurement goodness, complete with formulas.)

  • http://MagnoliaJazz.com/blog Robbie Schlosser

    Thanks for your clear and thorough discussion of how to monitor the performance of social media marketing. For me, and I assume for anyone running a business with online marketing, this is the real “meat & potatoes” of the whole endeavor. Your step-by-step presentation, with examples, is very helpful, and I’m sure I’ll be re-reading many times in the coming weeks.

  • http://www.buzzdock.com/?utm_source=YontooPR&utm_medium=Direct&utm_term=AG&utm_campaign=Comment Stacy

    This is a great article! I especially like your point about “all influencers are not created equal.” This is precisely why you can’t just go hog wild and open up accounts with every social media outlet and then scratch your head about why you have no ROI. You need to understand where you target audience is and what they respond too.

  • http://twitter.com/josh_beaty Josh Beaty

    Ryan,
    Thanks for taking out your valuable time to write such an amazing post. This is definitely true that we must use social media to make the most of campaigns and marketing. I will definitely take this information into account when consulting with future clients, and also be sure to give you the credit for the fantastic tips/advice.

  • http://pervarakapadiaatmoney.blogspot.com/ Pervara Kapadia

    Thanks a lot for this post. It is time that we realize and have a clarity on Online Social Media accountability – with its positive points and limitations as well. It is good to see traditional direct marketing [CRM] being built into the Social Media Network.

  • http://www.klout.com Megan Berry

    Hey Ryan,

    Great points about defining key performance indicators, lots of people think just being in social media is enough, but you have to do know how you’re doing and see when you’re improving. I’m curious, have you taken a look at Klout for measuring social media influence? We’ve done some changes recently and would love to hear what you think.

    Thanks,
    Megan
    ——
    Megan Berry
    Marketing Manager, Klout
    @meganberry

  • http://www.facebook.com/people/Alisha-Tannersby/100000348490277 Alisha Tannersby

    There are lots of cool social/brand tools to measure and monitor the impact of brands.

    Here is a huge list (with links)!

    http://tinyurl.com/3y9mxzx

    Cheers,
    Alisha

  • Pingback: How to Measure Social Media Marketing Performance | netWire web design, development & promotion

  • Pingback: Best Internet Marketing Posts of 2010 » Techipedia | Tamar Weinberg

  • Pingback: How do I measure this stuff anyway? « Waves and Ripples

  • Pingback: A Simple Way to Calculate Social Media Return on Investment « Klurig Analytics Social Media ROI Tools Internet Social Media Marketing Dag Holmboe Boston Massachusetts

  • Pingback: | Prof. C.J.M. Beniers

  • Pingback: Twitter, twitter followers, twitter follow, followers twitter, followers on twitter, get more twitter followers, get twitter followers, purchase twitter followers, twitter get followers, twitter following, get followers, buy twitter follower, twitter for

  • Pingback: First Things First Part 3: An Introduction to Social Media | Internet Marketing Strategy, Planning, & Consulting

  • Pingback: cptnjamieblacksblog

  • Pingback: How to Measure Social Media Marketing Performance | cyberetto

  • Pingback: What is social media ROI? The definitive answer. : Wright Creativity

  • Pingback: A Simple Way to Calculate Social Media Return on Investment | Prof. C.J.M. Beniers







Check out the Social Media Marketing Podcast!
Check out our Blogging workshop!
Join our Social Media Marketing Networking Club
Download the free Social Media Marketing Industry Report
Check out our sister publication: My Kids' Adventures