How to Measure the Results of Social Media Marketing

In some ways, marketing has changed a great deal in the past few years: there are fewer big tradeshows, there's a lot less paper collateral, no more middle-of-the-night press checks, more time spent online, more time spent tweeting and Webcasting and podcasting, and a great deal of focus on SEO and SEM.

Yet the mission of marketing hasn't changed. It's still the function that represents customer needs and wants to the rest of the business, directing the development and delivery of products and services. And it's still the function that introduces, explains, and promotes the product and services the business has created. Marketing is just doing that work with a lot more @ signs these days.

But does social media marketing, which relies of Facebook rather than direct mail and Twitter instead of phone banks, deprive marketing of the instrumentation it has come to rely on? Consider:

1. Over the past decade, marketing has become increasingly instrumented, and marketing professionals have been measured (and sometimes compensated) according to their results.
   Online advertising, which allowed click-throughs to be measured, facilitating A/B testing and brutally frank assessments of a campaign's ROI, contributed to this Taylorization of marketing. So, too, did CRM systems, campaign management systems, marketing automation systems, and a variety of other management tools. The goal of this instrumentation to eliminate the vague connection between effort and reward that seemed inherent to marketing, especially in advertising. That vagueness was neatly captured by John Wanamaker's quip: "Half the money I spend on advertising is wasted; the trouble is I don't know which half." Web 1.0 and 2.0 marketing automation promised to clear up the mystery.
   
   
2. As a result of both consumers and businesses working and playing increasingly online, businesses have reduced marketing investments in print and in live events, while increasing marketing investments in e-commerce, online promotions (e.g., email marketing and Web seminars), and other Web-centric activities.
   No doubt that many of the decisions supporting this change were supported by the glaring metrics made available by sales force and marketing automation systems mentioned above.
   
   
3. In the past year, social media marketing has emerged as the hottest area in marketing.
   Companies are trimming and sometimes slashing investments in other areas of marketing and focusing on social media activities: tweeting, blogging, interacting with customers on Facebook, etc. For example, I know a mobile services company that has trimmed marketing to two people: a product manager and a social media manager. I suspect that there are many reasons for companies making this switch. Customers are increasingly familiar with these tools from their recreational time outside work. Most of the tools are free, so companies investing in them largely are only paying for their marketing staff's labor. And the use of the tools must be effective. Customers success stories about Comcast and Zappos on Twitter, for example, demonstrate the viability of social media marketing.
   
   
4. Measuring social media activity itself offers little information about the value of social media activity.
   Are 60 tweets better than 30? It depends on how the tweeter's audience responds to the tweets. Ten thoughtful, empathic, and helpful tweets will likely be received more positively than twenty hype-laden tweets. Mere numbers alone can't convey the effectiveness of social media, because social media rely on human values such as tone and empathy that resist numerical characterization. This is an important point that Forrester analyst Jeremy Owyang made during a panel discussion on April 1 at the Web 2.0 Expo in San Francisco. Here's a summary of his remarks on this topic from Susan Etlinger of the Horn Group:
   

   
   Jeremiah says that most marketers are measuring social media incorrectly; they're focusing on the measurements of yesteryear. There is no access to server logs on Facebook and other tools/networks, so you have incomplete data. And even if you had that data, it wouldn't tell you what is happening: there just aren't good enough automated methods to measure changes in tone. (As someone who does this regularly, I can attest to this: quality analysis doesn't scale that well.) A lot of companies are trying to tackle this problem.
   

   
   


5. Is it true then that marketing, which has become increasingly quantified and Taylorized, can't apply metrics to its hot new practice, social media? Well, yes and no.
   No, because, as Jeremy points out, measuring the frequency of tweets is largely meaningless, and measuring Facebook activity is difficult and in some cases impossible. (True, you can measure some Facebook activity, such as the number of fans who have signed up on a company's profile page, but most activity will be difficult to quantify.)
   
   However, outside of social applications themselves, marketing teams can certainly measure key performance indicators such as:
   
   
   
   • customer satisfaction (through surveys)
     
   • inbound leads to landing pages referenced in tweets and on Facebook
     
   • length of sales cycle
     
   • mean-time-to-resolution on trouble tickets
     
   • sales overall
     
   
   Think of social media activity as a conversation. If you have lots of good conversations with lots of customers, you would expect that your customers' overall opinion of your company would improve and that your new sales and maintenance renewals would increase—so measure those things.
   
   The companies that have cut back on data sheets and trade shows and invested in Twitter, YouTube, and Facebook are doing so not because they love being tactful and responsive 24 hours a day, but because they think it's the best way of serving their customers and growing their business. Recession notwithstanding, if a company treats its customers well, serving them through any channel of communication, then it should see positive results on the bottom line. And those traditional bottom-line results are probably the best metrics for judging the success of social media marketing.
   

I'm launching a social media project for a new client, and that's how we'll be measuring the project's success: by the numbers of inbound leads and units sold. The marketing technology might be new, but the nature of a business's bottom line hasn't changed at all.

If you have other ways of measuring social media marketing success, please share them in a comment!

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