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PRSA09: Social Media Measurement – Katie Paine on Establishing ROI

The first day of the 2009 PRSA International Conference in San Diego kicked off general sessions today.

One session I’ve really been looking forward to was the one on social media measurement featuring Katie Paine of KDPaine & Partners. She started the audience off with some numbers, that we all might find useful:

  • 48% of respondents to a PRWeek study said that they were moving money from advertising to social media – only 18% said they were taking money from PR
  • 78% of people trust peer recommendations, 14% trust advertising
  • 91% of Inc 500 companies are using social media
  • 38% aren’t monitoring their brand, product or reputation in social media

Next, the audience had to grapple with the idea (read truth) that it’s the end of measurement as we know it. Here are ten supporting facts:

  1. Procter & Gamble is now paying for engagement, not eyeballs
  2. Sodexo cut 300K out of its recruitment budget using Twitter
  3. Comcast avoided government regs and improved customer service via Twitter
  4. Immunize BC used social media to boost awareness and increase percentage of population immunized
  5. BMC Software measures communications effectiveness based on contribution to EPS (earnings per share)
  6. HSUS (Humane Society) generated $650,000 in new donations from an on-line photo contest on Flickr
  7. Red Cross judges success in terms of property saved and loss averted
  8. IMB receives more leads, sales and exposure from a $500 podcast that it does from a $40,000 advertising program
  9. Wal-Mart credits Q109 profits to 11 Moms
  10. Stanford University calculates ROI from Facebook based on applications and retention

So, if you are measuring success with any of the following, you might be labeled Old School (and need to keep reading).

  • AVE (ad value equivalency)
  • Eyeballs
  • Hits
  • Couch Potatoes
  • # of Twitter Followers
  • # of Facebook Friends/Fans

Paine explains that the above measurement methods are in fact Old School and the incorrect way to measure the effectiveness of any campaign. Eyeballs aren’t a measurement of success anymore because those eyeballs likely avert your advertisement. Hits aren’t an objective of a website, inquiries and conversions are.

The measurement of success isn’t the creation of a Facebook page or even the number of friends/followers the page has. Rather, success is in the engagement with a particular audience and how that engagement has the potential to impact a preset objective.

So why don’t more professionals update the way they approach measurement? Paine says it’s fear. She adresses many fears that this (or any other) audience may have when it comes to social media and defining metrics.
1. Afraid metrics will reveal the program isn’t working.

  • If it’s not working, why keep doing it?

2. Afraid of what you will hear.

  • If you’re deaf to the conversation, only your enemies will hear it.

3. Afraid I won’t be able to justify my program/existence.

  • It’s not about justifying; it’s about improving

4. Afraid I’ll be fired for not showing the right numbers.

  • You should be fired for not showing any.

Social Media renders everything you know about measurement obsolete. The definition of timely has changed, the definition of reach has changed, the definition of success had changed.

The answer isn’t in how many you’ve reached, but how those you’ve reached have responded

Once you have reached the audience, take a look at how they engage and make decisions as it may have changed.

OLD:  Awareness > Consideration > Preference > Trial > Purchase
NEW:  Find > Observe > Participate > Engagement > Purchase/Act/Link/WOM

To get started, set goals for Social Media. Examples of goals are:

  1. Marketing/leads/sales
  2. Mission/safety/civic engagement
  3. Relationship/reputation/positioning

To reach those goals, what do you need to measure?  Paine recommends following the 7 Steps to Social Media ROI:

  1. Define the ‘R’ – what are expected results
  2. Define the ‘I’ – what’s the investment
  3. Understand your audiences and what motivates them
  4. Define the metrics (what you want to become)
  5. Define your benchmarks
  6. Obey the Rules
  7. Analysis

In what ways are you measuring social media? What have you found to be the most compelling metrics for getting management and/or client buy-in?

Comments

  1. AvatarJustin Parks says

    The ROI issue in social media is still a pretty heated debate with both camps swinging between It can or it cannot be measured effectively. Personally I think its a specific question. What do you want or need to achieve. ROI is not always a sale and can be considered so much more now and via a completely different process.

    OLD: Awareness > Consideration > Preference > Trial > Purchase
    NEW: Find > Observe > Participate > Engagement > Purchase/Act/Link/WOM

    This in particular has got me thinking about a range of different processes.

  2. AvatarLynn Anne Miller says

    Yes! What KD is saying here is profound, and she's explained it better than anyone else to-date. (No surprise here). Some further thoughts:

    1.Re the engagement metric, minutes spent and return visits on blogs will become increasingly sought after metrics. I never quite understood the old “hits” metrics anyway. Who cares if a huge number of people visit your blog, if they're only spending 10 sec there? You need quality of engagement – over 2 minutes – I believe – before the visits are meaningful. And certainly before anyone has time to click to an ad. How many visitors are spending greater than 15 minutes? 45? Those are the new gold standard metrics. And what about return visitation? Those are your fans / fanatics.

    2. I think we're going to see this year even more of a push to separate B2B and B2C rules of engagement for social media. The environment is MUCH more challenging in B2B than B2C.

    3.Frankly, I'm surprised Walmart credited their profitability that directly to the Walmart 11 Moms. Lots of questions from some of the Moms and others about how they were treated – everyone made bucks off those women except themselves.

  4. AvatarMAS says

    Wicked Cool Stats!
    Metrics are all about measuring real results. These statistics outline some new ways to think about what actually are 'real results.'

    Thanks very much for sharing all these figures.
    MAS

  5. AvatarMarc Meyer says

    Standard ROI measurements do not compute when measuring the effectiveness of social media and its impact to an organization. Those days are over. i.e. Red Cross judges success in terms of property saved and loss averted, success is in the engagement with a particular audience and how that engagement has the potential to impact a preset objective….amen.

  6. AvatarLoring Barnes says

    Great summary! Can you please expand on #6 “Obey the Rules.” This was great for those of us PRSAers who couldn't get to this year's conference. Now what is the book or website we can give to CLIENTS/EMPLOYERS to educate them about what results look like when they aren't ad equivalencies! Would appreciate suggestions!

  7. Avatargoutamsathia says

    Excellent Post…

    However, Social Media Marketing ROI is still at its recknowing feats… This need to be standardized by social media regulatory council before the client actually starts getting pinched on the marketing currency getting wasted in experimental SMM…

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  12. AvatarStephanie Noble says

    Great post. I'd like to contribute to the “new” metrics that are of value. In addition to some others, I like these:

    Viral Spread – In how many places, and how diverse, can your marketing message/app/link be found?
    Inoculation Speed – How soon after posting the message/app/link/video etc. did it spread to other communities and users?
    Brand Reputation Score – What is the sentiment about the brand? Breakdown of sentiment within each source. IE sentiment could be higher on facebook versus an independent blog with bias.

    http://www.padennoble.com/solutions/social-medi…