Understanding the Business Value of Social Media Marketing

Last week David Carter, Founder and CTO of Awareness, provided insights about how the field of social media marketing is maturing. We are a long way from completely understanding the business results for social media efforts and an even longer way from fully integrating them into a single-source set of marketing metrics. But real progress is being made in understanding and communicating business outcomes.

Awareness has a new ebook, with the lengthy but descriptive title “The Social Marketing Funnel: Driving Business Value with Social Marketing.” That is, after all, what we as marketers want to do, and we have to link our efforts to actual revenue generation, not just to having a bunch of people who like us! This is the funnel; the entire book is well worth reading. Note that they start with what is essentially segmentation. Their definition of a social profile is the “aggregated interests, comments, and overall behaviors of a fan, follower, or RSS subscriber to a branded social network platform such as a brand’s Facebook fan page, Twitter profile, or blog.” The definition alone is challenging; it requires a full view of the person’s behaviors in social channels which is a big order for the social media metrics capabilities of most firms at this point. However, in order to influence, the marketer must first listen to what the customer is saying. That’s a keystone of SMM strategy.
Next, the marketer must have clear goals that impact the business. Those can range from qualifying and nurturing sales leads to providing excellent customer service and more. Then there are a variety of engagement strategies that marketers can use including engaging in conversation and collecting feedback. Most marketers will find that they need to use all these engagement strategies at one time or another. Which they use will depend as much on the stage of the customer’s relationship with the firm (customer lifecycle) as on the marketing campaign or on the product. This all fits nicely with the organization of Awareness’s social media hub software—publish, manage, measure and engage.

In his presentation he talked about these stages:
• The first is a robust content marketing strategy, deploying (and “repurposing”) your content widely across the web. A large firm will need a robust content management system to both facilitate and control the content marketing process.
• It is essential that the marketer first listen, then engage in the conversation the customer wants to have—not the product-oriented conversation the marketer wants.
• Collecting feedback required monitoring and, carefully done, leads to the social profile.
• Then measure results that can be linked to business outcomes.
The presentation represents reflections on the state of our art from a respected practitioner. Take a look.

My Slides from speaking to Harvard's Social Media Marketing class

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In it he asks the question that all marketers must keep asking themselves—for their corporate SMM strategy as a whole and for each campaign they run: what stage of the customer lifecycle do we need to impact? If you buy my argument that all SMM is lead generation, then the practical question becomes “what is the definition of ‘conversion’ for this particular SMM activity?” Is it a fan for our Facebook page, a qualified lead for our sales force—what exactly? Can we link it directly or indirectly to our SMM activities? Those two questions help focus the mind of the social media marketer.

It also leads me to my favorite quote from the ebook. Jeremiah Owyang says, “Don’t give engagement data to executives, as it doesn’t measure the actual effect on business goals.” Ouch; I wonder how many of us have made that mistake.

Social media marketing is moving in the direction of proving its actual business value. It has a way to go, however, and all of us should play an active role in moving it forward.

ROI From Social Media Marketing

I'm looking forward to the Combi2010 Conference in Helsinki this week and to my own talk on social media marketing on Thursday. The plenary speeches are being broadcast live here. This is my presentation.

Roi from social media marketing

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I've spent the early fall thinking about my next-stage writing plans. I'll have announcements to make when I return from Finland and a brief pleasure trip to Russia.

Should all be a great experience!

Support Your Social Strategy With a Metrics Framework

In late April Altimeter and Web Analytics Demystified released a thought-provoking white paper on social media metrics. Authored by Jeremiah Owyang and John Lovett, it presents a process for developing a metrics framework in the chaotic world of social media metrics. The authors don’t expect the chaos to subside soon; too many platforms and vendors creating constant change. They’re most likely correct. Consider, for example, that Apple has a new iAd platform for its mobile devices, and you can always safely put Facebook in the “constant change” category. And the examples go on, endlessly.

The whole white paper has a lot of value, but I’d like to review just their steps for building a framework and a couple of concepts that go with them. The generic framework is straightforward; strategy guided by social media marketing and business objectives, management guided by Key Performance Indicators, and execution which, of course, provides the metrics.

To achieve that sort of integrated framework, they recommend 5 steps. They are:

Step 1: Revisit Tradition for Solid Innovation. “Many [businesses] don’t think through the traditional business rules that they know prior to deploying social initiatives or when measuring their effectiveness.” This is part of your integrated marketing strategy, not a vast new wasteland!

Step 2: Make Learning Your Primary Goal. “Every measurable business objective provides an opportunity to learn about consumers and the ways in which they interact with you, your brand and each other.” Note, that as I suggested in the post on strategy hubs, social media will not provide the conversion venue for most marketers in the near future. The authors include a chart that maps metrics to generic objectives. The original includes selected vendors in each area (p. 10). Sergio Balegno of Marketing Sherpa gave us another example last week that includes B2B segmentation, with objectives and metrics for each segment. That’s a useful way to think about understanding your customers!

Step 3: Define Requirements First, Then Select Vendors. “Organizations must determine a measurement strategy for their social marketing activity that aligns with internal goals, objectives and cultural capabilities.” Your needs, not off-the-shelf vendor products. Good advice! Do you have free solutions working now? If not, it’s likely you’re not ready for a paid solution.

Step 4: Develop Your Social Media Measurement Playbook. The authors advise marketers to “Start by creating a social media measurement playbook that aligns your organization on the goals, objectives, expectations and actions of your social marketing efforts.” In other words, a document that will keep the entire organization (all of whom are hopefully social media participants in one way or another!) moving in the same direction in social media. Think guidelines, and go from there.

Step 5: Make Our Measurement Framework Your Own. The authors “encourage readers of this report to adopt sections of our Social Marketing Analytics Framework and modify them to fit your specific business needs.” In other words, there are no cookie-cutter solutions to any of these issues. Each organization has to think them through for itself.

The while paper goes on to take each of the four generic objectives—dialog, advocacy, support and innovation—and identify KPIs, operationalization of each, and potential vendors. I hope by now I’ve convinced you to read the entire white paper for yourself!

The process is useful, but there are no new strategic insights here. It’s the same mantra; organizations must integrate social media marketing into their overall marketing strategy, then measure its accomplishments with care. Sounds so simple, but in practice, it’s so hard to do!

Do Facebook Ads Work?

I’ve always understood the conventional wisdom to be that ads on social networking sites like Facebook don’t work well. The reason given is that people go to social networks to network—communicate—and don’t pay attention to ads. Harry Gold of Overdrive Interactive mentioned in my class recently that they had purchased an ad on Facebook’s home page for Harley-Davidson, which has had great success on Facebook. That started me thinking. This chart makes the point that Facebook is now the third-largest site for display ads, so something is going on!

Facebook ads (except for major placements like the home page) work like Google’s AdWords. The advertiser creates ad content; selects targeting options; and sets budget, scheduling and payment parameters. The mechanics are the same; the targeting is completely different. The AdWords targeting that most of us are familiar with is by keyword (content). The basic targeting options on Facebook are demographic; everything from gender to birthday. There is a keyword filter that is based on items from the profiles of Facebook users. That’s different from the search-based keywords of Google but it’s an interesting possibility if you’re looking for, say, fans of a particular rock band. It’s self-service, so there’s a strong help page associated with the main advertising page.

Ok, it’s easy to set up a Facebook ad. Question is, do they work? The answer, of course, is partly dependent on your objectives.

It’s not arguable that a lot of people would have an opportunity to see an ad on Facebook. According to Inside Facebook’s analysis of site data for January 2010, “More than 108 million people are now using the site every month, up from nearly 103 million people before.” The absolute numbers can be disputed, but the trend has been relentlessly upward for a long time. The post has more information about the composition of the Facebook audience and growth segments. The stats are fascinating, but don’t make the mistake of thinking that Facebook is a broadcast network. The real possibility is microtargeting of ads.

Data from comScore, accessed on the Inspire Media blog, give some insights into the effectiveness question. All users were asked where they would be likely to notice advertising and User Generated Content sites ranked below both news and content sites and corporate sites. Another question, presented for the 18-34 age group, is very revealing. The type of sites that score highest by a large margin is music/ movies/ entertainment. Makes sense, doesn’t it? These Millennials want the opinions of their peers when it comes to use of their leisure time, something they find on the social networking sites, including Facebook. That should make them more receptive to advertising there for leisure activities. Note that consumer electronics, travel, and apparel also score relatively high on the “likely to notice” metric; I hypothesize that the reason is the same.

Noticing is nice—do they take action? Click Through Rates (CTR) are not high anywhere. One well-known marketer gives the average for Facebook as 0.01 – 0.05%. Search ‘Facebook CTR’ for a lot of anecdotal evidence that CTRs are low but can be impacted by strategy.

You also see the occasional story about finding motivated buyers on Facebook. Those are super-anecdotal, but you might find this case history on the Facebook advertising page instructive. Think about the product category and the ability to target, both by age and relationship. Again, it makes sense, but it’s also clear the Facebook ad was supported by an active lead management program.

So I’m back to my point about microtargeting. In a lead generation campaign (and that’s one of the obvious marketing objectives), the quality of the leads is more important than the quantity.

Reaching the right people with the right message is always important. Does Facebook advertising make sense for your product/service? Here are some links that may help you think about that question for businesses (1, 2), for small businesses, or for non-profits.

More recent posts on Facebook ad effectiveness:
Targeting Your Facebook Ads
Stronger Evidence that Facebook Ads Work

Developing a Metric for Engagement

For several years the topic of measuring engagement has been important to marketers and still is, according to the recent study quoted in eMarketer (newsletter, January 26, 2010). The most desirable metrics can be interpreted as engagement—with your website or with your ads. As the chart suggests, the state of the art is still single metrics. Here’s another example that's interesting both for content and for metrics; the level of engagement with social media in various countries by comScore late last year. They use time on site and number of pages as the key—and separate—metrics. It seems to me there’s a need for a multivariate measure of engagement. I’ve looked around and have found two different approaches.

Business Week has taken a variety of steps to increase engagement with its readers, including hiring an engagement editor. Here’s an interesting summary of what they have done; I don’t find an update so far in 2010. Most germane to my point, they have developed a proprietary User Engagement Index. Here’s how they describe it:

We developed a proprietary set of metrics to help us both track, and make us accountable for, our goal of being the business and financial site with the deepest and most meaningful engagement of its users. The index is the ratio of our outputs to the world (the stories and blog posts we publish) to the world's inputs to us (perspectives on stories and blog posts from readers as well as their guest columns.)

It makes sense to me and it is an approach any business could sit down, think about, and adapt to its own product category and situation.

If you want a ready-made solution, I found that also. Dutch metrics supplier Nedstat has an engagement solution that’s based on basic website metrics. Web Metrics Demystified recently did a good post, which included this graphic. There are two basic components to the Nedstat approach. First, the user develops her own engagement algorithm; that follows the Business Week example. Engagement is not the same for every product category, every website. Perhaps even more important, it’s going to differ on the basis of your own communications strategy—what you are doing to try to encourage customer engagement.
Second, Nedstat has a solution they call Live Segmentation that allows you to choose a customer segment and calculate the engagement index for that segment. Both the engagement algorithm and the segmentation choice are said to be easily varied as the marketer considers better metrics or strategy options. Aurelie Pols’ post rightly points out that you can do this with traditional web metrics, but it may be easier to work with a metrics company that can guide you through the process.

What it comes down to is interesting. If you are serious about measuring engagement, you need to construct your own multivariate metric. You can DIY or you can engage a consultancy. Either way, it’s going to take some thinking, some work.

Another object lesson reinforcing the fact that none of this is easy!

Strategy for Effective Listening

On Friday I wrote about the importance of listening to brand-related conversations on the web. It’s an important source of information these days. It’s also a potential source of qualitative data.

The problems with thinking of web conversations as data are twofold:
1. There is so much of it
2. It is qualitative.
A lot of us use Google Alerts to manage our own personal brands or brands with limited reach. Google Alerts are great, but if there’s a lot of conversation taking place, it quickly becomes unmanageable. I’m also not smart enough to filter what comes in so I only get the specific types of items that I’m looking for. Google Alerts picks up items that have a URL but in order to monitor microblogs and other social media conversation you have to use different services.

I’ve tried Social Mention in the past. I used a rather generic search string and I was inundated. That tends to cause the user to just give up and cancel the alert. Fortunately, cancelling them is easy, so you shouldn’t hesitate to give it a try. I just set up another one on Social Mention with a very specific search string. It immediately sent me an email to catch me up on what I think was the last month’s activity and the first dozen or so entries (of 28 for this specific, local issue) were spot on.

When there’s a problem web entrepreneurs arrive to try to solve it. I wrote about Techrigy last summer as a social media metrics service. Obviously, in order to produce the types of social media metrics described in the post it has to collect social media data. That huge database made it attractive to a larger firm and Techrig recently became part of Alterian. According to the site, the SM2 monitoring product continues to grow in line with the ecosystem it monitors.

What really interested me on Friday, though, was a firm called Clarabridge. They describe themselves as providing data for customer experience management, another recent subject. They do it by content mining. Data mining for quantitative data; content mining for qualitative data—concept makes sense, doesn’t it?


The relationship is that Clarabridge uses the Techrigy database of social media activity and puts its proprietary content mining algorithm on top of it to produce actionable insights in various aspects of marketing operations.

And that’s my point. Every business needs a listening strategy. Start small, say with Google Alerts. If that works for you, fine. But you also need to be monitoring social media and that requires another service. If the volume is high, you will need more help.

But that’s not all you need. This is a lot of effort; it’s going to require some resources. That means you must have a thoughtful listening strategy. Jeremiah Owyang outlines 8 Stages of Listening. We all must be progressing through those stages as our needs and our resources allow.

Evolution: The Eight Stages Of Listening

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Designing Customer Experience for Social Media

Having recently written a post about the Forrester Customer Experience rankings it’s no surprise that I paid attention when I noticed an article about Deborah Schultz of the Altimeter Group and her recent presentation on social media experience. It’s embedded below and it’s worth paging through. Her carton from the final slide represents the essence of the message.

There’s not a huge body of writing about customer experience on social networks like there is on designing for good experience on websites. Some of it is transferable, but most of it is not. Website usability is more about the mechanics; social media is about communication and human experience.

With that in mind, I found one recurring piece of advice; social media is about telling your story. For social media marketers that means it’s about telling the story of the brand. Actually, it’s even more about getting your customers to tell their stories; that helps to create a strong emotional tie with the brand.

Writing on the HBS blog, Peter Merholz of Adaptive Path has four useful rules. He says:

1. Only hire people who embody your brand. That’s the basic rule for customer service and it applies here. Further, it means you will have to do less policing of what your employees say in social media because they will have the brand story straight.
2. If you do need policies, keep them lightweight and human. Merholz admits that not all companies can be a Zappos and allow employees to participate in social media without restraint. He points to Intel’s social media guidelines as a good example. I also like Fresh Networks guidelines for writing a social media policy.
3. Experiment, prototype, pilot — try stuff out. There aren’t a lot of tactical guidelines when you get right down to the nitty gritty holding a conversation with your own customers. You must experiment, track and understand what works and what does not.
4. It's a conversation, which means you both listen and take part. Amen!

Good customer experience is like the facetious definition of pornography: “you know it when you see it.” That’s important; it’s part of the humanity of social media. Take your own good customer experiences and translate them into interaction with your customers. It’s also the Golden Rule; treat them as you want to be treated.

Understanding good customer experience is important because we certainly don’t know how to measure it. It is more than customer satisfaction, so don’t let that well-understood metric get in the way of trying to understand the experience of your customers at each of your brand touchpoints. That will take qualitative understanding as well as wise choice of metrics.

I’ll fall back on my long-time favorite and suggest you read Bruce Tempkin’s 6 Laws of Customer Experience.The bad news is that designing good customer experience is more art than science. The good news is that each one of us has potential to be an artist—we are, after all—all customers!

It's the People Stupid

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Did You Get a Twitter Wake-Up Call?

Black Friday has been a retail shopping phenomenon, probably ever since shopping malls were invented. A few years ago, Cyber Monday joined the retail scene as an important online shopping day, although last year December 9 was actually the heaviest online shopping day of the year. This year, the lines seem to have blurred as the amount of online shopping continues to increase, stimulated by social media. Marketers are using social media to get shoppers revved up earlier, both in the stores and especially online.

I’ve written before about the importance of Twitter and Facebook to consumers who are looking for bargains. This year marketers took advantage of that to promote deals—sometimes on an hourly basis—on both days. The New York Times called it the "first Twitter Christmas” and has links to more examples of corporate marketing efforts. The Motley Fool has more.

Two examples:

• Penney is the one with the wake-up call—take your pick of a message from Cindy Crawford, Kimora Lee Simmons or Rascal Flatts. A wake-up call was needed; they started Tweeting special deals and coupons at 4 a.m. Black Friday morning. That’s good, but why do they have a Facebook link on their site but not a Twitter link? Worse, their Black Friday press release gave a twitter account link that doesn’t work. This annoying one does. http://twitter.com/JcPenney

• Best Buy has been pushing their TwelpForce since last summer, complete with television ads. I took a quick look around the blogosphere and there are some positive, some negative posts about its effectiveness, but Best Buy is clearly putting effort into it. It’s easy to find other customer service options from the Best Buy home page, but not TwelpForce.

Do you see a pattern here? The Twitter initiatives, especially for Christmas shopping, are important. Why are they so hard to find???

With apologies to an article I read over the Thanksgiving weekend and promptly lost, there’s a point beyond successfully integrating these social media efforts into the overall communications program. I’m not sure how Penney’s got the word out except for the zillions of Black Friday/Cyber Monday, coupons, and deals sites and blogs. Did they do some ads that included the Twitter deals? Perhaps; I didn’t see any. Best Buy used a significant amount of television to support the TwelpForce launch. These two firms are a small sample, but the skew is heavy in favor of Twitter and Facebook—non-paid media.

The article I read pointed out that newspapers stood to lose even more revenue as businesses come to understand effective uses of social media. Good for business, bad for newspapers. Today’s eMarketer newsletter quotes a study from The Center for Marketing Research at UMass Dartmouth that pointed out that “the Inc. 500, a list of the fastest-growing private companies in the US, is outpacing the larger, more traditional companies in the Fortune 500 in many social media activities.” (“Social Media Marketers Declare Success” December 2, 2009)

Could that be the biggest impact of social media on retailing in the long term? As small businesses wake up to social media like Twitter they will be able to reach their customers-- directly and in a timely fashion--with relevant information. The impact could be huge. Again, bad for newspapers and perhaps other local media, but very, very good for small businesses – and for all organizations that want direct, authentic communication with their target audiences.

That said, remember that I wasn’t signed up for Twitter from either Best Buy or Penney. One reason is that they never asked. Retailers have to aggressively build their networks—opt-in email lists, Facebook Friends, Twitter Followers and maybe others. Then they can, indeed, reach customers with timely, relevant information—information customers have chosen to receive!

Kraft Celebrates Football Season with Social Media

When I wrote about the Kraft iFoodAssistant widget recently, I realized that Kraft had more going on in social media and resolved to look into it. When you look, you find all the usual blogs pointing out coupon availability, which is ongoing for most CPG brands. It certainly is a new way of distribution though; and therein lies one social media impact.

What you also quickly see is two seasonal promotions for Velveeta cheese. Tis the season for tailgating or football on TV, and snacks made with Velveeta cheese are a seasonal item. The Kitchenistas blogger promotion has been going on since September; here's the microsite. In fact, today is the last day of activity for the five compensated “Mommy bloggers” who have participated in the promotion.
How does this kind of promotion affect sales? Velveeta brand manager Sherina Smith admits they don’t really know:

“It’s hard to say,” Smith says. “What we do know is that this consumer is online looking for ideas for meals. We know she blogs a lot and looks to other bloggers for tips and ideas. The more that we can be where she’s looking for ideas, the more we can be top of mind when she’s grocery shopping.”

All this context seems to create warm fuzzies for the brand, and that may be all we can say at present. I’d love to know the ROI of a low-cost promotion like this, incorporating real people, compared with the ROI of, say a traditional television commercial. Yes, I’d like to know, but what is the dependent variable—brand awareness, favorable brand attitudes, what? We’re back to the difficulties of measuring attitudes and their impact on behavior. Marketers have operated on faith that positive brand associations do matter for a long time, and I don’t think that’s going to change any time soon.

Enter the Big 10 promotion, also for Velveeta and also tied in with football season. Here’s the Big 10 Conference home page for today. Note a banner ad at the top by Rotel with a dish of cheese dip beside it. You probably won’t be surprised when you click through and find that most of the featured recipes feature Velveeta cheese. Rotel is a ConAgra brand with a non-corporate-looking website that pushes recipes and attitude.
Note that on the Big 10 home page there’s a square box pushing a contest for bowl tickets, again featuring Rotel. At the bottom of the page there is another banner that makes the Rotel Velveeta partnership more explicit. It’s all quite integrated—and hard to miss!

Kraft’s website, the iFood Assistant, and one guesses its relationships with bloggers will go on. Promotions for various brands, many of them seasonal, can also be expected to continue. What do you suppose they have on tap for Thanksgiving and Christmas? Stay tuned!

Sharing with the Information Ecosphere

I started thinking about social sharing and bookmarking when I was writing a post about small business and the local content site that’s actively supporting their Internet Marketing efforts. As you can see, Cape Cod Today makes it easy to share content, exactly what any content publisher should be doing. When you share something, they encourage you to share it again! You can sign up for their Twitter feed, which puts all headlines in your Tweet stream (they hope you’ll retweet it). It all comes under the heading of getting the content out, perhaps reaching readers who wouldn’t otherwise have seen the article or were not even familiar with the website. This article from the NYT last week discusses issues and has a funny graphic; be sure to expand it.

This advice is all well and good for a business site. Could/should bloggers and other types of websites do the same? That’s the easy one—of course they should! More difficult is to decide how to do it in order to have the most success in reaching your target market.

This set of icons from AddOn.com puts the issue in perspective. Note that this includes all the ways of sharing content, not just social bookmarking services. How on earth do you select from all of these? Probably the first thing you notice is that many of the bookmarking ser vices you’ve never heard of; every time I look at this chart I see an unfamiliar one! Next you might notice that some of them are clearly specialized—TellMyPolititician, for example. Some of them you might not think appropriate for a general-audience publication—PimpThisBlog strikes me as something I wouldn’t use even if it works for some audiences. Frankly, though that still doesn’t eliminate many of the bookmarking services.

You could start with the biggies; that’s what most people seem to do; they are also the most readily available. Here’s a list of the top 20 bookmarking sites if you want to start down that path. The AddOn.com graphic includes all major ways of sharing, not just the bookmarking sites, so their ranking—not surprisingly—has Facebook at the top. Here’s an article that gives some advice on what to look for.

Some of the sites are well known for catering to a particular target audience. Reddit is beloved of young tech folks; little known to the rest of us. An American Library Association division actually has a list of the best bookmarking sites for teachers.

What’s the best way? Choose several bookmarking services that seem reasonable and install them on your site. It’s easy, as long as you have access to the HTML. Then study the analytics; see what sites are sending you the most traffic. You may be able to get keyword data; that’s even better.

All bookmarking services have some reports available. You may find it necessary to use a metrics program (Google Analytics remains free and easy to use) to really understand the sources of traffic to your site. Then you can refine your choices and your visitors can help you share your content with the world?