This document discusses measuring the effectiveness of social media marketing. It presents challenges in measuring social media due to the many platforms and metrics. The author advocates taking a holistic approach to analyze how all marketing activities, external factors, and economic conditions impact business goals. Econometric analysis of comprehensive data over time can determine what activities are most effective. The document provides examples of content, relevance, and impact social media metrics and recommends tying metrics to business goals to optimize marketing spend across channels. It raises measuring "social capital" as an emerging issue and invites participation in a pilot study.
The CMO Survey - Highlights and Insights Report - Spring 2024
Measure Social Media Impact
1. Measure Social Media
Presented by Barbara Lewis
MarQuantAnalytics.com
On-line Business Community Forum
Sonoma, California
March 20, 2009
2. Problem:
Too Many Marketing Activities ~ $400b/year
Events
1922
1980s
1856
1941
1889
1673
What’s driving sales?
2
3. Problem: Too Many
Internet Marketing Activities ~ $25b/year
Mid ’90s Late ’90s
Mid 2000s
Early 2000s
Late
2000s
Banners
Clicks
Key words
Paid search
Social Media
Affiliates SEO
Email
What’s driving sales?
3
4. Social Media Makes Measurement Harder
Podcasts
RSS Feeds
YouTube
Web 2.0
LinkedIn
MySpace What’s the result
Wikis that impacts the
firm?
Blogs
Twitter
2-way
Facebook
Delicious
Digg
4
5. Now we can determine what’s working & what’s not
Econometrics
Results determine the
effectiveness of
We gather variables that could
marketing spend –
affect outcomes and analyze.
what’s working & what’s
wasted.
Optimization
Results provide optimal
We take results of econometric
budget across marketing
analysis and build optimization
activities for maximum
model.
performance.
Econometrics & optimizations have been used for decades with CPG
companies; in the past 10 years for other companies. MarQuant Analytics
has been doing econometrics & optimizations since 2003.
6. Broad range of data inputs can affect outcomes
TV Print DM Web
Housing starts
Unemployment
Gas prices
Acquisition External Factors
Outcome
variables can be
customer equity, Other
new or total New Customers Controllable
customers, Factors
profitability,
market share, Sales force #
unit sales, etc. ATMs/branches per capita 6
7. Marketing Other
Factors
Week 1
National
Local
2
X
X
Segments
Pr
Brand
od
Marketing Other u ct
s
Factors
3
X
X
Segments
Pr
od
Product
Marketing Other
4
u ct
s
Factors
5
Segments
Pr
od
Marketing Other u ct
s
Factors
6
Marketing
Other Factors
Segments
Pr
od
Marketing Other u ct
s
Factors
7….156
among variables over time
Segments
Pr
od
Marketing Other u ct
s
Factors
Segments
Segments
Pr
od
Marketing Other u ct
s
Factors
Weekly data over a three-year period is ideal.
Segments
Pr
od
Marketing Other u ct
s
Factors
Segments
Pr
od
u ct
s
7
Econometric analysis determines relationship
Variation is key
8. Econometric analysis produces equation that
explains objective (revenues in this case)
Equation
Monthly Revenues=Base Revenues x Television 0.100
x Radio0.031 x Web Display0.154 x Web Search0.111
x Print 0.091x Direct 0.122 Internal Factors j=1 External Factors
n m j
i
i=1
R2 indicates % of variance that is explained in prediction compared to actual.
8
9. Econometric results include elasticities that
indicate the lift for marketing variables
Marketing Expense Elasticity
The response parameters
(predictors) are expressed
1. Television 0.100
as elasticities.
2. Radio 0.020
For example, if the “TV
3. Web Display 0.154
spend” elasticity = 0.1 then
4. Web Search 0.111
that means that increasing
TV spend by 10% will yield a
5. Print 0.091
1% increase in revenue.
If Print spend increases 10%,
6. Direct Mail 0.122
revenue increases 0.9%.
Elasticities guide reallocation of marketing budget to
marketing activities that are generating the most lift.
11. Typical Social Media Metrics
Content Metrics
Relevance Metrics
Impact Metrics
11
12. Content Social Media Metrics
Description
Who is talking about you?
Who is talking about your industry?
What are they saying?
What
Examples:
Net Promoter score, Google Alerts, Cymfony, Radian6,
Buzz Metrics, Techrigy, Blogsearch, Technorati, Social
Media Platform Provider
12
13. Relevance Social Media Metrics
Description – relate your offer with customer interests*
Fundamental Metric Source Reveals
Influence Time on site Web Analytics Value of the opinion &
Bounce rate Google Analytics conversations of
Omniture & Web Trends interested purchasers
Engagement Pass Alongs Above+ Message interest level:
Comment to Post Ratio DoubleClick & Digg will customers forward
Diggs, Stumbles & bookmarks StumbleUpon referral
Podcast Listen & Views Del.icio.us
Loyalty Blog Post for Brand BlogPulse Context & intensity of
Recommendations Google Alerts blog posts
Tweeters Cymfony & Techrigy
Blogserch & Technorati
*Social Media Marketing – An Hour a Day by Dave Evans
13
14. Impact Social Media Metrics
Description – measure effectiveness*
Fundamental Metric Source Reveals
Audience Referrers Web Analytics To Whom your social
Demographics Google Analytics media campaign is
Omniture & Web Trends appealing
DoubleClick
Influence Time on site Above + Audience involvement
Loyalty Bounce rate Repeat Customers with message
Action Conversions Above + Number of desired
Reviews Reviews & Ratings outcome (products
Recommendations Platform purchased) e.g. Tweet
Tweets, etc. Net Promoter reference to purchase
*Social Media Marketing – An Hour a Day by Dave Evans
14
15. What are the Social Media Metrics?
Depends on Business Goal
Business Goal $ Metrics
Subscription Customer Lifetime Value $ Spend
Retention rate
Advertising $ Demographics
Number of visitors/members
Time on site – pay attention
Pass alongs
Users Cost reduction # problems solved by users
# problems /time tech support
Insight Solutions
Quality of solutions
Demographics
# & volume of conversation
Predictive analytics
15
16. Case Study – computer company
Market Response
Self Contained Data
Problem: Can we leverage social
media to generate $
Solution: Offer only social media
special promotion
Benefit: Generated $1 million in
revenue
Holistic Approach
Problem: Determine if social media is working
Solution: Analyze data (all marketing activities, external,
economic, etc.)
Benefit: Identify impact of social media on business goals
16
17. Recommendations
Tie social media objectives to business goals
Identify data that measure business goal achievement
Capture appropriate data
Analyze data
Monitor changes in input/output variables to
determine what’s working and what’s not working
Test various options
17
18. What’s Next?
Social Capital – value of connections among people in
social networks
Currently no measure for social capital
What metrics would define social capital?
Pilot program to determine social capital
measurement and relationship to business goals
Do you want to participate?
18
19. For More Information Contact:
Barbara Lewis
Tel: (310) 471-8979
BarbaraLewis@MarQuantAnalytics.com
499 North Canon Drive, 4 th Floor
Beverly Hills, CA 90210
www.marquantanalytics.com