The ongoing crusade of answering “what it the ROI of social media?”, comes around every season. Two years ago I blogged about “Coping with Social Media ROI” especially since ROI was the yellow flag thrown onto the playing field to stall social media efforts.
The dogma? If you can’t measure the ROI, we can’t spend money on social media. This season, however, I’m optimistic that the ROI question gets traded for “what should I measure?”
In 2011, I am finally seeing valuable measurement discussions in place of ROI question. Many books, speeches have been given about measurement. Readers and attendees line up to hear about ROI. The ROI formula is easy, and in case you don’t have the formula handy, here it is:
But we might have been asking the wrong question. What we SHOULD ask is “what do I need to measure to signal success with social media?” And the question should be asked when designing social media strategies, not to prevent social media planning.
We’ve mentioned the Social Engagement Journey in blog posts before. A critical theme within this transformation journey is insights and analytics, the outcome of impactful measurement.
At the crux of this theme is that within different stages of the journey, businesses have different requirements for measurement. At stage 2, you should be asking, “what should I measure?” And within Stage 2, a simple answer is to measure what will get you to the operational stage – metrics that will signal success in your social media operation and align with your objectives. For example, if your objective is brand reputation, then sentiment is an appropriate measure.
AT&T was at this juncture in 2010. ROI was being asked for, but in reality, the question was “what should we measure?” Together with Ant’s Eye View, measurements were determined and a new framework devised that would support stage 2 and beyond. This measurement framework is a nominee for 2011 Forrester Groundswell Awards.
At stage 3, your needs are a more for a coordinated measurement framework to respond to the needs of multiple social strategies and outcomes. A holistic measurement framework is necessary to coordinate and communicate across business units and disciplines. Measurement is the stitching that can bring together siloed social media activities across the enterprise. If your culture that looks for measurement to validate, then you will need to update or align your current measurement framework to be inclusive of social media metrics (that signal business outcomes). If your culture is lacking a measurement discipline, then a social media measurement framework can be built.
Still struggling with measurement? Start with the following:
1. Conduct a self-assessment to determine current stage of the social engagement journey.
2. Include your analytics and finance teams to help validate your social metrics.
3. Be patient, you start first with operational metrics, refine over 2-3 quarters, then start planning for ways to align with financial metrics.
Let us know what you think. How do you measure Social Media ROI?
My first real inspiration to leave Microsoft after 15 years and form Ant’s Eye View came in February of 2007. At the time, I was General Manager of Community and MVP at Microsoft and responsible for the global online community and advocacy strategy.