social media newsHow are you measuring social media in 2015?

Do you know which metrics to watch?

Research reveals that over the past four years, most marketers switched to measuring more intangible goals like brand awareness, message effectiveness and brand perception.

In this article you’ll discover findings from studies to help you determine which metrics to use to evaluate your social media efforts.

social media metric research

Research shows the metrics marketers value most.

#1: Consider Shifts in Metric Choices

In August 2014, Duke University’s Fuqua School of Business along with the American Marketing Association surveyed 408 chief marketing officers and 4,582 marketers total to gauge how metric choices and priorities have shifted over the past four years.

As the eMarketer chart below shows, four years ago in August 2010, nearly 18% of marketers used sales as a metric for success. By August 2014, that number had actually dropped by 1% to 17%. Further, using “profits per customer” as a metric dropped from 9% to 6%. Also, following “revenues per customer” dropped from 17.2% of all marketers tracking this metric to 12.5% in 2014.

emarketer report data

Using revenues and sales as metrics for social media success has waned.

During the same period, brand awareness–type metrics rose significantly. Tracking numbers of followers/friends, for instance, nearly doubled from 24% to 45% in the same four years ending 2014. “Buzz indicators” enjoyed nearly a 50% increase, also indicating prioritization of brand awareness over sales and profits.

Interestingly, the top metric, “hits/visits/page views,” remains the most-used, with an additional 30% of marketers relying on it in 2014 than in 2010. This metric, too, can fall into the brand awareness category, as it brings visitors back to websites where brand identity, offers and conversion opportunities live.

Despite the difficulty tying sales to social media or even proving social media has an impact on revenues, tweeting and updating continues at a furious pace. Duke University’s CMO Survey reports that social media as a percentage of marketing budgets now stands at 9.8%, but is expected to rise to 21.4% over the next five years.

duke survey report data on future spending

Spending on social media marketing is expected to double in the next five years.

In fact, Simply Measured’s Quarterly Facebook Network Study (Q3 2014) of 100 of the top global brands reveals that 65% update Facebook at least five times each week and 97% have Facebook pages. Clearly, companies are convinced that the brand awareness that social media provides has value, despite its intangible nature.

Key Takeaway: Marketers are well aware that social media marketing is not driving sales directly. Despite an absence of dollar return on investment, they view social media impact as worthwhile and intend to allocate more money to social media marketing over the next five years.

#2: Pay Attention to Total Interactions

Since its inception, social analytics company Socialbakers has encouraged companies to use its “engagement rate” metric to compare success against competitors. Engagement rate is the number of likes, shares and comments divided by the number of audience members. Socialbakers concluded that competitors with higher engagement rates were producing more powerful social content.

Findings from their 2014 study of 300,000 Facebook posts from more than 2,700 businesses, however, have prompted them to change this recommendation.

With the rise of news feed advertising, Socialbakers explains that the engagement rate metric has become skewed because many brands now pay for reach, at least on Facebook. They’ve switched their recommendation for top metric to absolute count of interactions.

Mining their data from the large study, they report in How Social Engagement Drives Site Visits that the number of absolute interactions correlates directly with website visits.

socialbakers report data

According to Socialbakers, social media interactions directly correlate to website visits. (Alert: Socialbakers uses the terms “engagement” and “interactions” interchangeably. Also “engagement rate” differs from “engagement”.)

Research authors conclude:

Here we can deduce that if a brand garners a high amount of Interactions from their social media activity, there is a high probability that it will increase traffic to their websites.

Every like, share, comment and retweet on social channels raises the number of consumers going back to the company website to be exposed to brand identity and offers to sign up for an email newsletter, call or even buy.

Useful Social’s State of Corporate Media 2014 echoes these findings. “Engagement” and “web traffic” stand at the top of their preferred metrics list for measuring social media engagement, too.

useful social report data on emarketer

Useful Social, too, found marketers relying most on engagement/interactions metric and website visits.

Key Takeaway: Social media is doing something: it’s getting consumers to interact with brands and channeling them to websites. Each company must decide whether this amounts to sufficient value.

#3: Focus On Customer Lifetime Value

Forrester reminds us that just because most marketers are using engagement/interactions and website visits/hits metrics, it doesn’t mean marketers SHOULD rely on them.

The research giant’s December 2014 report Stop Measuring Social Engagement concludes that engagement rarely translates into sales or customer loyalty. A business is in business to make money after all, and if social media cannot clearly prove it drives direct sales, marketers may want to reassess their fascination with it (see the above prognostication that social media marketing spend will double by 2021). Popularity contests do not necessarily pad the bottom line.

Forrester encourages marketers to put more energy into email marketing where measuring customer lifetime value and customer loyalty is far more clear and conclusive.

customer lifetime value shutterstock image 98445005

Customer Lifetime Value is a clear and conclusive metric. Image: Shutterstock.

Key Takeaway: The Forrester study’s authors insist that social media prove itself in terms of return on investment measured in dollars. If that can’t be done, budget and effort should be diverted elsewhere. The futility of measuring the value of brand awareness in the abstract will resonate with some companies.

The Bottom Line

Social media’s impact on either profits and revenues or the more abstract measurement of brand awareness is proving difficult to measure, even for Fortune 100 companies. The many steps and interruptions that can occur between a social channel interaction and purchase cloud how sales are actually won.

It’s not surprising then, that most marketers don’t have a clear picture of dollar amount their social media efforts add to business profits. Although some companies are creating “attribution models” that measure the various paths consumers take from acquisition channels like social, email and website to a sale or conversion, these figures aren’t tracked accurately as of this writing. This recent Social Media Examiner article explores attribution models in more depth.

social media examiner google analytics conversion report article

Explore using attribution models in this article from Social Media Examiner.

Just because the return on investment cannot be tracked in dollar amounts, however, doesn’t mean that social media has no effect on a business’s success. Brand awareness has been shown to drive revenues and profits, and social media has proven to raise brand awareness. The most encompassing way to measure social media success would be to track how overall business revenues and profits correlate to increasing or decreasing social media efforts.

Still, many marketers believe having business goals that aren’t directly revenue-focused can add to the bottom line over time. Some are confident that changes in reach, audience numbers and interactions are the concrete metrics that measure brand awareness.

What do you think? Does your company set objective goals for measuring brand awareness? What metrics do you use? Are you being asked to prove return on investment in dollar amounts? Leave your comments and questions in the box below.

Customer Lifetime Value photo from Shutterstock.
Tags: , , , ,

Get Social Media Examiner’s Future Articles in Your Inbox!

Join 465,000+ of your peers! Get our latest articles delivered to your email inbox and get the FREE Social Media Marketing Industry Report (56 pages, 90 charts)!

More info...
  • I’d be interested in seeing more date behind the stats, that cover how much of this is down to clients asking for crappy metrics. Most marketers I know want to provide the stats that matter – lead gen, churn, social activity to bottom line.

    But too many clients see the shiny toy syndrome of “viral traffic”, thanks to empty sites like Buzzfeed and Upworthy, and want similar. Therefore, no amount of education from business-led marketers will matter – it’s all about the Likes, Shares and Buzz for clients (because that sounds better at the golf course).

  • Im surprised also to see ‘chatter’ ranking so high. For some reason I cant get my head around #2. So the best metric to use is total number of impressions divided by absolute count of interactions, have i got that right?

  • Im surprised also to see ‘chatter’ ranking so high. For some reason I cant get my head around #2. So the best metric to use is total number of impressions divided by absolute count of interactions, have i got that right?

  • SuzanneDelzio

    “Likes” are intoxicating! They can blind clients to other metrics.

  • Alcohol is also intoxicating, and too much of that leads to idiocy. Apt parallel to vanity metrics. 😉

  • Rog

    Facebook calculates engagement rate already in ‘Posts’ within the Insights page. Admittedly it is per post but can an average rate not be calculated over a week/month by adding up the rates and dividing by the relevant number of posts?

  • Pingback: Marketing Day: Email Marketing Report, Google Opens Domain Registration Service & Twitter Planning New Homepage()

  • Since the beginning of time corporate management has continued to ask the question: “Is my marketing/advertising spend bringing in business?” Having been in the role of advertising/marketing director, I can tell you that most CEOs aren’t sold on the idea that an increase in brand awareness translates to increased sales. You have to take in on faith. And most managers who are responsible for ROI don’t have much faith. Direct response advertising and email campaigns — nothing new here — are the only forms of marketng that can truly correlate engagement with sales. I once had a folder filled with articles that proved brand awareness leads to sales. The folder had the tab “Selling management on advertising.” I threw it away a long time ago.

  • Good information. I am surprise to see impressions and engagements ranked much higher than leads generation and leads to sales conversion. Are marketers using digital buzz as their KPIs?

  • Agree.

  • SuzanneDelzio

    No. Total interactions, period. No math involved. According to Social Bakers, that is.

  • SuzanneDelzio

    Yes, but keep in mind that Social Bakers is not using engagement/interaction RATE so much as total number of interactions.

  • SuzanneDelzio

    Email . . . that’s what Forrester recommends.

  • Hello Suzanne,

    Thank you for sharing this information. Personally for our small company it really helps realize how important is to set objective for brand awareness.

    In order to answer to your question, we use the following metrics: Productivity, Revenue, and Transactions but definitely we will pay attention for the others metrics.

    Have a good day!

  • Lawrence Pickup

    For e-commerce businesses, if you don’t concentrate on trying to create new customers through your social media efforts and instead concentrate on delighting your existing ones it is much easier to see the value. By capturing email addresses of people who you know are following you on social media you can compare the lifetime value of fans versus non fans. In my experience fans spend up to four times more than non fans so why wouldn’t you want to keep engaging with them?

  • Lawrence Pickup

    For e-commerce businesses, if you don’t concentrate on trying to create new customers through your social media efforts and instead concentrate on delighting your existing ones it is much easier to see the value. By capturing email addresses of people who you know are following you on social media you can compare the lifetime value of fans versus non fans. In my experience fans spend up to four times more than non fans so why wouldn’t you want to keep engaging with them?

  • Puranjay

    I’m disappointed that vanity metrics like ‘Number of Followers/Friends’ have actually grown in importance for marketers. These metrics yield no real results; they make you feel good but unless they lead to increased engagement/traffic/leads/conversions, they are absolutely meaningless.

  • Puranjay

    The funny thing is, sites like Buzzfeed and Upworthy have notoriously dis-engaged audiences (which Buzzfeed, I should say, has done a remarkably job of remedying). This is why so many fly-by-night Buzzfeed clones/competitors exist, using similar headlines and content to get gullible folks on Facebook to click on some ads.

    In contrast, a blog like this, or Tim Ferriss’ 4 Hour Work Week has the kind of engaged readership these publications can’t even dream of.

    Value inspires more value. “Viral” content gets traffic, but not traffic you can do much with

  • SuzanneDelzio

    Thanks Lulia!

  • beckahh!

    Particularly with the increased number of bots and spam accounts. Agree with you completely.

  • beckahh!

    I do think you’ll see a shift in the social media stats (engagement, particularly) vs success rates with loyalty and sales as Millennials become the buying power, particularly when it comes to companies who effectively use their customer support social media to ensure brand loyalty. If I have an issue, I am much more likely to reach out to a twitter/facebook than I am pick up the phone/write an e-mail. 1) It’s faster, 2) It’s public, forcing the company to not only acknowledge me, but own up to their mistake. Companies who use their social media for customer service with efficiency will absolutely be seeing a growth in their loyalty and sales: those who merely “ask” for engagement will suffer.

  • beckahh!

    Also remember though that if you’re an empty site with paid advertising, each Like you receive can appear on someone’s Facebook/Twitter, driving clicks and therefore driving your advertising business. It’s an easy money maker. I fully (and shamefully) admit to getting suck into those CRAP stories where every photo/paragraph is on a new page, with new clicks and new ads. I feed into it KNOWING that what they’re doing SUCKS for me as a “customer,” but I just can’t help it. I’m easily sucked in. I’m a sheep 🙁

  • I just love seeing new facebook marketers potentially encouraging meaningless likes. 80/20 you silly people 80/20!

  • Pingback: Conversion rate optimisation for e-commerce, smart content distribution, SEO best practices & important metrics for 2015 - Online Marketing Brief - Engagement Engine()