Considering the Return on Investment for Social Analytics

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Calculating ROI – The return on investment for a social media analytics solution may be slightly ambiguous, similar to other business intelligence and Big Data initiatives. However, rest assured it is possible to calculate the value generated from these products as compared to their total cost of ownership. Let’s delve deeper into the calculation with an eye toward the people, time and expense required for this effort while keeping in mind the inherent risks.

These solutions may provide multiple capabilities, each with a tangible benefit to the company. When marketing within the social media channel, there is a need to measure activity. While many sites have their own metrics that are accessible at no additional cost to their customers, there is a cost to compile this information across sites and make it actionable within a company. Therefore, part of your calculation may account for the people and time required to aggregate the data from multiple social media sites and present it to selected audiences in a coherent fashion.

If your company is monitoring the market’s comments and corresponding sentiment about your company, brands and the competition, there may be an yet another staffing consideration to take into account.  Fine tuning of the algorithms that categorize data may be a cost. This aspect will be affected by data volumes as well as the flexibility and features of the selected solution.

Quantifying lead generation and the resulting sales may be the easiest way for a marketing executive to justify the overall cost of a solution path. Transforming lead data into actionable information may have a cost depending on the source of the leads and the complementary processes already in place. A calculation may need to consider incremental volumes, sources and any additional staffing.

Since a core component of social media is creating content and distributING it, there may be a resource cost to identifying influencers and formulating access to them whether it is performed in-house or by an agency. Tracking also may require a planned approach to tagging the related content for accurate measurement of results.

Industry and Company Specifics – Any company’s situation may present industry specific considerations. For instance, if a business has a response center, the solution may be able to monitor existing call, email or chat activity, funnel it into an inbox and analyze it similar to social media text. The sales and marketing capabilities of a business may present other options for managing data shared among sales people, value added resellers or distributors. These all present potential costs and data sources that may feed a social media analytics solution. It quickly becomes evident that the value for each company may be quite different even within the same industry.

A Marketer’s Perspective – Ultimately, a marketer must consider the total value created by the solution and quantify it based on today’s baseline and plans for change in the future. It may also be relevant to determine the value of the touch points along the path to a lead or sale, similar to an attribution model, when defining the value of a solution.

Ready for the Big Leagues – These social media analytics posts provide a sampling of what you should know about understanding, evaluating, selecting, implementing and managing a measurable social media program. Start with your marketing strategy and objectives to enable success for your organization. Diligently identifying the cost and value associated with this type of solution will keep you aligned with your strategic priorities.

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Aligning Marketing Objectives and Social Analytics

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Connecting Social Media Marketing Objectives and Analytics – First, let’s define marketing objectives. Simply stated, these are measurable outcomes that indicate progress toward goals. In this case, they may be either corporate or marketing specific goals. Applying this within the confines of social media, analytics should consist of metrics that support the tracking of progress toward the aforementioned goals.

The Rule of Engagement – Essentially, social media engagement is the many different ways a customer interacts with your brand or company across social media sites. The metrics associated with engagement are often those that become the measurements for objectives. As an example, if a company has an objective to increase the retention rate of existing customers, they may want to measure response levels to various types of customer service opportunities that arise within social media. If a company is able to monitor what existing customers are saying within this channel, it becomes possible to identify issues and provide resolutions in a timely manner in a forum preferred by the customer. Effectively, an organization needs to concentrate their efforts for measuring results by choosing parameters that accurately reflect success within their objectives without missing key metrics that are secondary, but critical. For instance, driving a car requires the monitoring of many imperative indicators, such as speed. Other indicators such as RPM and engine temperature are also important, but during the typical drive in a well maintained car they are referred to less frequently and become secondary to speed. The point here is that you may need to track metrics that are secondary to your stated objectives and then determine what audience within the organization needs access to each and when.

A Marketer’s Perspective – A marketer needs to identify all the necessary metrics to support the accurate and comprehensive tracking of the agreed upon objectives as this becomes the basis for their social media dashboard. For instance, if a company wants to acquire new customers, then social media analytics could support the measurement of this objective by monitoring actions along the way, such as social media views, clicks and follows.

A B2C travel site selling air, hotel and car products may emphasize destination searches and product views on their site, but rely on likes, follows and clicks to their website from social media pages to better understand a consumer’s purchase intent from a social analytics perspective. Furthermore, engagement in the form of views and clicks with selected content within social media may be indicative of a consumer’s dream destinations for future vacations.

A B2B site selling business services on the other hand may find inquiries, blog follows and pricing requests more relevant to understanding purchase intent while follows and clicks to a website are more important when evaluating progress toward objectives with respect to social media sources.

Therefore, alignment occurs when a company correctly identifies the metrics that support its objectives and goals. Diligent progress toward achieving success in these metrics should create an opportunity to reach the marketing objectives of a company.

Planning for the Return on Investment – While there is an innate form of return with regard to social media analytics platforms since they enable the measurement of essential metrics, this by itself may not be enough to prove value to a company’s executive team. A company may want to consider if the solution allows it to better measure:

  • The key metrics associated with social media programs
  • Progress toward strategic marketing objectives
  • Responsiveness of the Company to the inquiries of Customers and Prospects
  • Market opinions from a market research perspective

This list of benefits, and many others, provides the return part of a Return on Investment calculation. ROI will be explored further in the next post on this topic.

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Managing the Complexities of Social Analytics

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I Thought This Was Simple – The intricacies of social analytics do in fact exist, but are manageable. The solutions are reliant on the data as they ultimately need to interpret the data accurately. The keys to understanding the specifics of an implementation, whether it is existing or planned, is to manage the Data, Percentages, Sentiment, and Metrics.

The most complicated of these is managing the data, but that is also where the golden insights exist for a business.  When talking about Data these days, it is often preceded by the word “Big” and followed by slightly ambiguous, yet important terms such as: Volume, Velocity and Variety. These are known as the three V’s of Big Data.  Social Media data is subject to these words and their definitions if you have a meaningful amount of information being tracked for your company or the competition.

The Rule of Percentages – It is important to keep in mind that not all shared information is trackable simply because it originated in social media. People print to paper and electronic documents and share via file systems, chat systems and email.This is a classic marketing conundrum where it may not be possible to know the actual percentage tracked. Most estimates place the amount of tracked shares at a relatively low percentage, but meaningful from a market research and many other perspectives. Similarly, you must consider how much of your corporate data is captured within social media channels as this will influence the level of emphasis you place on the analysis. Data should always be taken in context.

A Few Thoughts on Veracity – Accuracy is an important facet in and of itself. This characteristic directly influences the quality of any analysis originating from the data.  Depending on the decisions being made, this may be a critical aspect to consider. What causes inaccuracies? They may be caused by variations in the origin of the data, such as posts coming from different channels or software. Semantic analysis algorithms, if used by a specific solution, may evaluate reviews or comments very differently causing variations in results. However, those solutions with semantic analysis often provide customization of how it is applied to the data.

A Marketer’s Perspective – Then how will these complexities be managed? Implementing consistent tracking methods within social posts will supply better initial data. Adding complementary information and transforming data as it is prepared may dramatically improve the resulting analytics and reporting. Finally, further improvements may be made by providing context when necessary to accurately comprehend the information. A marketer relying upon or presenting this information must be familiar with the details affecting the net result.

Staying Aligned – This sets the stage for aligning social analytics with sales and marketing objectives. Furthermore, it ensures the goals agreed upon are in fact measurable and actionable. Additionally, it proves progress against these goals can be tracked in order to determine what amount of variance in action will cause a certain amount of variance in result.

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