Revolution: Social Media - ROI: Like it or lump it

Can brands determine the value of a Facebook 'like' or a Twitter follower? Yes, if they use the right measurement tools and view social activity in the context of the sales cycle.

Revolution: Social Media - ROI: Like it or lump it

Every day consumers are bombarded with requests to 'like' or 'follow' a brand, but what does this really mean in practice? Is it a sign that these consumers are more willing to buy a certain product over another, or are they just indicating a preference to mimic their peers and friends? And to what extent is it possible to measure how a 'like' has contributed to a sale?

Enter the world of social media ROI - it is one of the biggest issues facing brands today and one that few appear to have cracked. The challenge lies in the fact that historically, social media measurement has been far more aligned with the measurement methods favoured in the PR world, such as coverage, anticipated reach of readership and sentiment, to name a few. 'Realistically, however, brands are driven by sales, but trying to prove the relationship between increased buzz and conversation and increased profits is problematic to say the least,' says Amy Kean, head of consumer innovation at MPG Media Contacts. 'As such, the measurement approach brands take - and their key performance indicators - need to match the campaign objectives.'

That's not to say that 'softer' metrics such as engagement and recommendation have little value - in such cases it is important for brands to understand the role that social activity can play at the beginning of the customer journey, by using 'last click' technology, for example, to determine where in the purchase path social activity had an impact.

Econometric models are becoming increasingly important in the social ROI debate, but as Kean outlines, when a brand embraces econometrics to prove the value of its social activity, it is more than likely that it has moved far beyond the testing stage, and has already found some way to prove its value.

It's a theory borne out by Procter & Gamble's approach to social media. According to its chief marketing officer, Marc Pritchard, the brand has been using its Market Mix Modelling proprietary system for well over a decade to evaluate returns on its marketing spend, which is increasingly invested in social channels. Econometric analysis is used to attribute sales effects to various marketing inputs, ranging from temporary price reductions to TV ads, digital work and social media. P&G is then able to assess sales and spending data across its own and competitor brands.

'We've been able to apply it to every form of digital, be that search, social media or public relations,' says Pritchard. He adds that social media is not just about the number of fans or friends a brand has - it is the number of those fans that create 'amplification' that counts. In his words, high numbers of hits on social media translates to effective PR, and if brands can combine that with TV advertising, they can really fuel a great deal of awareness.

Data and tools

Many other brands are working with their agencies to help make sense of the social media ROI landscape. At the recent annual ISBA conference, Jamie Kenny, chief strategy officer at agency Jam, stressed the importance of collecting data for ROI, particularly as there are no benchmarks in social. In this fast-moving world, it is also vital for brands and agencies to audit and review social media tools regularly.

Yet the vast amount of social media measurement software available, which automatically measures trends in consumer sentiment, can often complicate, rather than simplify, the situation - the tools can often be out by as much as 50%. A manual approach to testing may work better for some brands, but this does come at a cost.

Jan Rezab, chief executive of Socialbakers, a social media and digital analytics company that works with brands such as Nokia, Vodafone and L'Oreal, says the most important metrics for measuring social media ROI include audience engagement and response rates, fan growth and what Rezab terms the 'most engaging types' of post: photos, videos and links.

Nokia has worked with the agency to gain insight into its Facebook and Twitter communities across more than 30 markets, covering more than 18m fans and followers. Thomas Messett, global editor-in-chief of mobile at Nokia, says by better understanding where its strategy is working and where it is not, the company is able to act quickly and maximise the value of its social properties to deliver business value.

Rezab believes that a hybrid of in-house proprietary models and outsourced resources will likely prevail. 'To outsource social media measurement, strategy and activity entirely would be to lose a valuable indication of marketing activity results,' he says. 'It is vital that brands have someone in-house who has a 360-degree view of all marketing and communications strategies and results. This includes social media.' He adds, however, that the amount of data that is gathered in monitoring and measuring social media is vast. When this is added to the data gathered from a couple of key competitors and a regular industry benchmark report, it can often be unmanageable for an in-house team alone to digest.

Those brands that have cracked the social-to-sales link have caught on to the fact that if you place an exclusive offer in social media, you can prove what sales were achieved as a result. Determining the value of social engagement to sales is a much tougher proposition, but one that brands must address if they are to ensure a return on their investment.


1. Facebook engagement measures a brand's ability to communicate successfully with its customers on the social network.

2. Social media revenue conversion measures how many people become customers through social media referral channels.

3. Social customer support metrics measure the impact of customer support on brand health and the cost of staffing a social support programme.

Source: Sudha Jamthe, social media strategist, eBay


The latest trend in social media is not being set by advertising executives. It is emerging from the powerful and passionate voices of consumers and the companies that are finding and measuring their ability to create buzz.

This is according to Mark Shaefer, author of Return on Influence, which explores the area of personal online influence. This is when people creating content on blogs, Facebook and Twitter represent an action.

Having a link clicked, or a message tweeted, is an effect. And Shaefer says there are billions of actions and effects to measure and compare daily. As he outlines, some of the world's biggest brands are incorporating social media influencers into their traditional marketing. Unleashing the passion of customers and turning them into brand advocates is working. According to Klout, a leading company in this space, each influencer in one of its outreach programmes generates an average of 30 pieces of content and millions of possible impressions.

Essentially, this is creating a new marketing channel, and, says Shaefer, it can be cost-effective. Early case studies show the cost per impression is at least as good as paid advertising. What's more, it is organic because it is being generated by people who already love the brands.