Most marketers agree that there is inherent value in social media, but today success metrics are primarily limited to measurements of 'engagement' (measures including the number of likes/follows, shares, comments/mentions or pins) and 'brand awareness' (measures including the number of positive mentions or share of conversation).
Unfortunately, these metrics aren’t sufficient when trying to quantify true P&L impact, and significant ‘share shift’ to social, if warranted, will not happen until a marketer can quantify the short and long term effects of these investments.
Over the past several years, the attribution and optimisation imperative has moved from ‘nice to have’ to ‘need to have’.
As digital marketing has increased as a relative percentage of marketing spend, so has the complexity in measuring, and the old world of media mix models, attribution models and the like are no longer capable of giving accurate answers.
With the rise in digital marketing, people have become accustomed to highly granular reporting that makes it rather straightforward to attribute online interactions to online conversions.
Yet, with social media, the effects are not nearly as easy to measure. There are definitely instances where you can attribute a conversion to the 'last-click' interaction on social media - last minute or promotional deal tweets or Facebook coupons - but the 'network effect' is not as easy to measure.
The social network effects
The challenge is akin to measuring the impact of word of mouth or brand loyalty, two assets which marketing scientists - and by extension, advanced marketers - have figured out how to accurately measure.
With social media, we know that the network effect and magnification of a message can be significant - and we are just now figuring out how to accurately attribute financial outcomes to it.
And, with the increasingly complex media landscape, the interactions between different media channels and social media are incredibly difficult to measure.
Think of all the marketing touch points that are available to us - both online and offline - that we have to account for: radio, print, out of home, television, display, search, social, mobile, in-store … this is not an easy problem to solve.
We now have tools to measure the impact of social media. Some of them are overly simplistic, measuring the commonly used (and accepted) but rather toothless - disconnected from financial outcomes - engagement metrics.
What they fail to take into account is how social media complements and enhances the overall consumer journey - how it influences consumers as they are exposed to advertising, interact with brands, and discuss products and brands with friends online - and, ultimately, the contribution of social media to a conversion or sale.
Measurement through marketing science
With solutions such as resource allocation analytics and multi-channel attribution, forward-thinking marketers are now able to measure the impact of their social media efforts.
Developing marketing impact models that take into account the journey that consumers take to purchase, it is now possible to evaluate how marketing campaigns result in increased social media interaction with the brand and how that translates into information search activities, trial, and, finally, (repeat) purchase. Also, the long-term effect on brand equity - not simply the short-term effects.
Brands are collecting a huge arsenal of social media metrics. Now it’s time to identify the metrics that demonstrate the most effective 'dynamic persuasion paths' consumers are following to purchase.
For example, new metrics from Facebook enable brands to isolate the consumer response generated by paid social media efforts from organic response from consumers.
Utilising the latest techniques and thinking in marketing science, and layering on a healthy dose of predictive econometrics, true visibility into social media ROI is becoming more of a reality for all marketers.
At MarketShare, with our analytics solution and platform, we are able to measure actual social ROI as opposed to engagement metrics that are disconnected from financial outcomes.
For instance, we have observed in some of our initial analyses that a 10% increase in offline and online impact on the social graph would result in up to a 2% increase in sales.
For a major car manufacturer, we were able to uncover a direct relationship between Facebook engagement (brand impressions and different types of interaction - comments, likes, etc) and actual auto sales. We continue to scale the solution across multiple industries and brands.
Taken to the next level with predictive analytics, some marketers, and soon all marketers, will be able to plan their social media efforts using financial impact focused metrics such as ROI.
This, in turn, will allow people to see what truly works and what doesn’t.
Is your social investment generating a return? Is it one you can bank on?