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Measuring the Influence of Social Media

by Brian Cavoli
One of the most common questions companies have today about social media is how to measure and evaluate success of their efforts. Since we are well beyond need to “do it because it’s cool”, marketers need to demonstrate how their blogging, community participation and influencer outreach is impacting their business.

Social media is all about relationships. Everything you do in social media is about cultivating and nurturing the relationships of the people that shape your brand. The different ways to measure that influence is what the slides below are all about.

This short presentation summarizes the different types of influence in social media and how they can be measured. Since that elusive business impact is so difficult to quantify, I included some interesting industry studies that point to the specific ways social media is impacting business results.

I’d love to hear what you think about these slides and if you have additional ideas to make the story better. Leave a comment, send an email or find me on Twitter (@bcavoli)

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Measuring the Influence of Social Media

  1. 1. Measuring the Influence of Social Media
  2. 2. Social Media is All About Relationships <ul><li>Individuals creating new connections and openly sharing ideas, experiences and opinions </li></ul><ul><li>Participation requires: </li></ul><ul><ul><li>Listening and learning </li></ul></ul><ul><ul><li>Joining the conversation to contribute value and build relationships </li></ul></ul><ul><ul><li>A new approach to marketing effectiveness measurement </li></ul></ul><ul><li>Goals of brand participation: </li></ul><ul><ul><li>Gain deep customer insight </li></ul></ul><ul><ul><li>Cultivate, facilitate consumer influence </li></ul></ul>
  3. 3. A New Type of Marketing <ul><li>Social media surrounds your marketing funnel </li></ul><ul><li>Influences prospects at every stage and can move them forward </li></ul>Brand Marketing Direct Response Awareness Interest Evaluation Trial Referral Commitment Upsell Blogs Communities Social Networks Discussion Boards Video Sharing Social Bookmarking Twitter Review Sites New Type of Marketing: Social Influence
  4. 4. The Power of Consumer Influence <ul><li>91% say consumer content is the #1 aid to a buying decision (JC Williams Group) </li></ul><ul><li>87% trust a friend’s recommendation over a review by a critic (Marketing Sherpa) </li></ul><ul><li>Social network users are 3 times more likely to trust peer opinions over advertising when making purchase decisions (JupiterResearch) </li></ul><ul><li>1 word-of-mouth conversation has the impact of 200 TV ads (BuzzAgent) </li></ul><ul><li>Social media sites are the fastest-growing category on the Web - doubling their traffic over the last year (Comscore) </li></ul><ul><li>Information Technology buyers trust social media more than any other content source (PJA IT Social Media Index) </li></ul>
  5. 5. The World’s Top Brands Listen and Respond <ul><li>“ The best brands follow their stakeholders’ journeys so that they provide effective, consistent and appropriate messaging throughout the experience.” </li></ul><ul><li>“ The turnaround brands all show a sense of understanding consumers’ needs and desires, and rediscovering the appetite to meet their customer promise.” </li></ul>Interbrand Best Global Brands
  6. 6. New Marketing Attitudes “ Social media allows customers to express their opinions and publish them to the world, and we cannot afford not to participate in the conversation. I think in five years, you won’t specifically talk about social media. It will just be an integral part of how you go to market, and how you get your marketing mix . ” Eric Kintz, Hewlett-Packard “ We need to think about giving the users the ability to connect with one another, which is the real interactivity of using the Web. This will allow brands to be the connection point between two or more parties and not just a connection point to the brand .” Eric D’Ablaing, Hyundai “ Display advertising's main role will be to quickly, straightforwardly, informatively draw you into a broader brand experience .” Bob Garfield, AdAge &quot;Advertising is not dead; it's really important, but it's more about fanning the flames of word-of-mouth than anything else.&quot; Rory Finlay, Beam Global Spirits & Wines
  7. 7. Measuring Influence of Relationships <ul><li>Measuring the impact on social media is about determining influence of these relationships on: </li></ul>Media (social media and traditional media) Target Audience Business Results
  8. 8. Types of Success Metrics Goals Metrics How Compiled Action and Insight Engagement and Influence Reach <ul><li>Sales inquiries </li></ul><ul><li>New business </li></ul><ul><li>Customer satisfaction / loyalty </li></ul><ul><li>Marketing efficiency </li></ul><ul><li>Risk reduction </li></ul><ul><li>Sentiment of reviews/comments </li></ul><ul><li>Brand affinity </li></ul><ul><li>Commenter authority/influence </li></ul><ul><li>Time spent </li></ul><ul><li>Diggs, votes </li></ul><ul><li>Favorites / Friends / Fans </li></ul><ul><li>Viral forwards </li></ul><ul><li>Number of downloads </li></ul><ul><li>Opinions expressed </li></ul><ul><li>Membership </li></ul><ul><li>Visits / views </li></ul><ul><li>Unique visitors </li></ul><ul><li>Pages viewed </li></ul><ul><li>Volume of reviews/comments </li></ul><ul><li>Navigation paths </li></ul><ul><li>Links </li></ul><ul><li>Files embedded </li></ul>Surveys Market Mix Modeling Social media platform metrics Social media analysis tools Free tools: Google, Technorati Social media platform metrics Web analytics Business Influence: Outcomes Audience Influence: Outtakes Media Influence: Outputs
  9. 9. Examples: Media and Audience Influence Sentiment Across All Media Sentiment in Online Mainstream Media Competitive Brands Mentioned in IBM-Related Posts Topics Discussed Viral Video Statistics Most Influential Posts
  10. 10. Business Influence Examples <ul><li>Difficult to measure directly – measuring the value of insight and relationships </li></ul><ul><li>Several studies have addressed the business impact: </li></ul><ul><ul><li>Aberdeen Group: </li></ul></ul><ul><ul><li>Surveyed 250 companies currently using social media to determine how it has impacted their business </li></ul></ul><ul><ul><li>Fox Interactive / TNS / Marketing Evolution: </li></ul></ul><ul><ul><li>Study on the impact of marketing on social networks </li></ul></ul>
  11. 11. Best-in-Class are Making a Business Impact <ul><li>Companies with “Best-in-Class” social media practices far outperform average companies in many key areas </li></ul>Source | Aberdeen Group 2008
  12. 12. Success Requires Active Engagement <ul><li>“ Best-in-Class” companies are actively involved in communities surrounding their marketplace </li></ul>Active Engagement Monitors and contributes to the conversation Passive Engagement Monitors but does not contribute to the conversation Source | Aberdeen Group 2008
  13. 13. Best-in-Class Focus on Success Metrics <ul><li>“ Best-in-Class” companies are defining specific business metrics to quantify success </li></ul>Source | Aberdeen Group 2008
  14. 14. The Value of Social Networks <ul><li>70% of the value from social networks is from the “momentum effect” where consumers use and share brand elements on their profile </li></ul><ul><li>Visibility </li></ul><ul><li>The Adidas page in this study was viewed 600,000 times in a month </li></ul><ul><li>Momentum effect resulting in 21 million interactions with the brand in that time </li></ul><ul><li>Purchase Intent </li></ul><ul><li>The average cost to influence purchase intent in social networks is 3X better than the average for all of online marketing </li></ul>Source | “Never Ending Friending”
  15. 15. The ROI of Word of Mouth <ul><li>ChatThreads determined the value received from a word-of-mouth conversation for a consumer package goods product is almost twice the cost </li></ul>Source | ChatThreads ARF Audience Measurement 3.0 $ 0.24 Net Value $ 0.27 Cost Per Conversation $ 0.51 Value of a Single WOM Conversation
  16. 16. Many Departments Benefit From Social Media <ul><li>Many groups have an ownership of social media – these programs connect departmental silos </li></ul>Source | Aberdeen Group 2008
  17. 17. Clear Objectives are Key To Success Source | Portions from Forrester <ul><li>Product ideas generated </li></ul><ul><li>Speed of development </li></ul><ul><li>Questions answered </li></ul><ul><li>Customer satisfaction </li></ul><ul><li>Avoided support calls </li></ul><ul><li>Community membership </li></ul><ul><li>Recommendations </li></ul><ul><li>Sales inquiries / leads </li></ul><ul><li>Awareness and buzz </li></ul><ul><li>Time spent </li></ul><ul><li>Change brand perceptions </li></ul><ul><li>Purchase intent </li></ul><ul><li>Customer knowledge </li></ul><ul><li>Competitive insights </li></ul><ul><li>Cost savings over focus group </li></ul>Goals Social Media Activities Objective Corporate Function Product Development Customer Service Sales Marketing Research <ul><li>User communities </li></ul><ul><li>Suggestion boxes </li></ul><ul><li>Observe reports </li></ul>Embracing <ul><li>User communities, wikis, support forums </li></ul><ul><li>Loyalty programs </li></ul><ul><li>Observe reports </li></ul>Support <ul><li>Brand communities </li></ul><ul><li>Influencer outreach </li></ul><ul><li>Widgets </li></ul>Energizing <ul><li>Blog, video blogs </li></ul><ul><li>Social network communities </li></ul><ul><li>Viral videos, contests </li></ul>Engagement <ul><li>Observe monitoring reports </li></ul><ul><li>Private communities </li></ul><ul><li>Digital vision development </li></ul>Listening
  18. 18. Keys to Success in Social Media <ul><li>An open, transparent communications approach </li></ul><ul><li>Listening and learning before acting </li></ul><ul><li>Internal resources dedicated to social media </li></ul><ul><li>Active engagement in the conversations </li></ul><ul><li>Clearly defined goals and expectations </li></ul><ul><li>Risk mitigation plan </li></ul><ul><li>Success analysis metrics </li></ul>
  19. 19. Thank You Digital Influence Group