Understanding Social Media Worth
Social media is a big deal.
We have conferences exclusively dedicated to social media.
It is an essential portion of the marketing mix for nearly everything and everyone.
We understand it, and supposedly, so does everyone else.
But do they?
“Sure!” you say. “We understand that our consumer group is on it, we understand how they use it, and we strive to create interesting and relevant content frequently.”
If you said “No” to any of the above things, then please hire someone who can nurture your social media needs with love and understanding.
If you said “Sure”, then you comprise a handful of organizations that are on the same page as the public.
The truth, however, is that a lot of companies – a lot of clients – jump into the social media pool with a big question at the top of their minds:
“Why do we need to invest so much time and money in social media?”
“What is our social media ROI?”
I hope that we could all agree that ROI is an outdated approach when it comes to social media. This point has been proven and discussed during Advertising Week, and again just last week during Social Media Week. Multiple companies and individuals jumped to building various conclusions about what we can translate ROI into when it comes to online.
The one term that has been around for quite some time is Return on Engagement – ROE. It’s not quite the same as calculating your dollars earned versus dollars spent; return on social media is as simple as consumer engagement.
Although social media is potentially a good platform to sell more products, it is primarily a platform that helps you build and maintain relationships – to manage crisis, to put the brand top of mind. The ROE theory argues that social media value is measured through dollars spent versus consumer engagement:
Number of page Likes, posts Likes, comments and retweets.
Most recently, I came across another ROE term – Return on Effort. In this case, ROE is engagement against the amount of effort you put in to managing social media and creating content. The effort here is all the people involved and the time spent.
Now all of this makes a lot of sense. But something about the ROE does not sit quite right. Here is why:
The basic idea of ROE is incredibly close to ROI, a formula that was developed for traditional media with very low levels of engagement. The idea of return is a grand gesture expected from a consumer – as grand and straightforward as a purchase.
Although it is now possible to buy things on Facebook, or click through Twitter links to get to a shop, it is not what people are on Facebook and Twitter for. No one logs in and says, “Let’s see what Twitter has ‘in store’ for me today.” Social media is an outlet for public rage. It is where people share, overshare, and complain. It is not a place where people shop.
So why the hell are we on it once again?
To build brand awareness and to nurture relationships.
The basic idea of brand awareness has not changed since the 80s. Back in 1985, RC Stokes wrote a genius book about memory theory in which he argued that brand awareness is an essential first step in a basket of associations a person collects about a brand. It’s that first step that occurs before purchase. Quite simple.
Now here’s the thing:
Brand awareness is forgotten as easily as it is created. It needs maintenance.
Today – with the growing levels of basic ADD and decreasing attention spans – the maintenance takes on a much larger role than Stokes could have imagined.
In the ink-and-paper times, you had to bring the brand to the consumer in order to build awareness. Primetime TV, billboards, essential real estate in print. Today, if all the steps are taken strategically, the consumer will come to the brand.
Social media is simply that place where consumers can go; it’s a kitchen party and God help you if you did not bring enough booze.
With all this in mind, let’s get back to the ROE. The return in social media is brand awareness. It’s the relationship that you built while throwing it back at the kitchen party.
The relationship is clearly and immediately visible, but if you insist on measuring your investment, then the first thing that should be measured is the amount of active Likes. How many people out of a million actually still remember that they Liked your brand on Facebook? The active Likes are the only ones that matter; the rest of them are like the shoes you never wear – they’re useless.
From here on we should measure not just the level of activity, but its quality.
Are people writing on your Facebook Wall and responding to your tweets for a coupon – or because they are genuinely interested in the conversation? The couponers will always remain the couponers. They are not your brand ambassadors and they are clearly not interested in spending money.
Followers who are interested in your content even when there is nothing in it for them are the ones that should be taken into consideration. These are the people who will drive the conversation about your brand and spread it to their immediate circle of friends, thus multiplying your exposure tremendously.
Lack of relevant content results in a deficit of quality active Likes, so the bottom line is always in your own hands.
These active Likes should be combined with the rest of the promotional outlets like newspapers and TV (measured in relevance to what they are), and only then put against the total profit margin.
To bring this conversation home, social media should not be measured on its own.
The measurement system should concentrate on measuring Grade of Relationship and the Return on (the overall) Investment will follow.
- by AWSC
- posted at 10:53 am
- March 1, 2012