Social Media Metrics: ROI or Just Numbers

I’m looking at various ways people are trying to attach social media marketing metrics to ROI.  Some of the insights being provided leave me wondering if we are really measuring ROI or if it is just reach within the online community.

Leading the way on social media metrics is Networked Insights.  Their measures of interactions looks at reading, rating, sharing, linking and inviting is one way to determine impact.  They are coming to be the source of social media metrics as Nielsen is for TV ratings.  They released two grids of information connecting off-line media with social media – one in October looking at TV ratings and social media interactions and the other with Superbowl ads and social media interactions.  If you’ve been tracking, I’m sure you’ve seen these.

I’ll say this, I love the numbers coming from Networked Insights.  It really puts together an easy way to monitor and measure social media.  However, there are a a number things that bother me with how the metrics may be used as well as inherent bias in these numbers.

1. On TV ratings: Interactions are a measure of topic interest.  Viewership is about a single event.  The program is a catalyst or topic of discussion.
2. Advertising winners in the the Superbowl ads are more closely related to social trends as opposed to real marketing effectiveness. Winners are associated to key events in people’s lives: jobs, taxes, Valentines Day, need for money.  Many of the losers are for big ticket items that are already hurting.  The only one that stands out is CareerBuilder vs. Monter.com.  The other point is how much social media marketing is available for thes loser brands?
3. Inclusion of “reading” in the interaction metric is a huge bias.  This is like saying that someone that opened an email is really engaged.  In terms of ROI, there is no value in “reading” unless there is an outcome.  I think this inflates the ROI value of a social media property.
4. Interactions to rate a program are biased based on the overall bias of social media community.
5. Interactions as a rating don’t account for the fact that some programs have more emphasis and effort on generating social media buzz and interaction opportunities.
6. The Social ROI score is great if you are focusing only on the online interaction conversion.  But, the real goal of marketing spend is to convert to purchase.
7. Each of these reports is focused on lift in a specific point in time.  Real ROI is over the course of a sales cycle.
8. Are these interaction unique individuals, households, or an overall impersonal and duplicative/exponential number

When leveraging social media metrics such as provided by Networked Insights, it is important to remember the business objective you are trying to attain rather than just the number of impressions and interactions in the online world.  How do you tie these metrics to your business objectives?  Ultimately spend on social media needs to generate a financial gain to the company either directly or indirectly.  Similar to traditional marketing vehicles, we must start to recognize social media interactions as part of the strategy rather than just the strategy.  So, when we do measure, it connects to what we are really trying to accomplish, growing our business.

Filed under: metrics, social media, Advertising, Business, business intelligence, marketing, Marketing and Advertising, marketing effectiveness, marketing metrics, metrics, Networked Insights, performance management, roi, social media metrics, tv ratings