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Marketers are investing more in social media yet many are struggling to effectively measure the business value of their activity.
The volume and real-time nature of social media metrics, as well as the multitude of analytics tools available, is overwhelming and can make social media simultaneously the most measurable channel and the one that is most difficult to measure.
So how can marketers cut through the noise to effectively measure the real business value and ROI of social media?
#IPASocialWorks, an industry working group formed by The Institute of Practitioners in Advertising, The Market Research Society and The Marketing Society to promote social media effectiveness, signposts the way.
Over the past 18 months brands and agencies alike have been submitting their best examples of how they have measured the business value of social media activity to #IPASocialWorks for peer review. Of over 160 case studies submitted, we found just 13 that effectively assess the business impact of the activity.
The successful case studies highlight five core methodologies and a set of best practice guidelines for how to effectively measure the value of social media:
Five ways to measure social ROI
1. Attribution Modelling – Creme Egg
Mondelez used Facebook to reach their target audience of 16-24 year olds as part of their integrated cross-channel campaign “Have a Fling with a Creme Egg”, which spanned TV, VOD, outdoor and digital advertising.
To measure the sales impact of each channel they applied above-the-line media measurement methodologies: a combination of Kantar Worldpanel tracking and market mix modelling. This enabled the team to isolate and quantify the business impact of all online and offline media activity as well as other sales drivers.
Results demonstrated that Facebook generated the second highest media ROI, behind TV. Analysing the synergies between media also showed that consumer exposure to both Facebook and TV drove a greater uplift than the sum of its parts.
2. A/B Testing - IKEA
IKEA set up an A/B test to establish whether Facebook could be valuable for customer acquisition and as a driver of store footfall.
The brand used Facebook to target users in the area local to its Cardiff store with the aim of driving consumers to their in-store sale. To create the test and control groups they worked with mobile operator EE to target only users who had mobile numbers that matched a particular random pattern.
EE then compared the device activity for these mobile numbers against those of other numbers that had not been exposed to the sales creative to understand whether they had entered the geo-fenced area immediately surrounding the Cardiff IKEA store. Results showed that the geo-targeted Facebook ads drove a 31% uplift in store visits amongst 22-25 year olds and an 11% uplift amongst 26-35 year olds.
3. Brand Tracking – Onken Yogurt
Competing for shelf space in a crowded market, Onken’s objective with their “Just Good Stuff” campaign was to use social media to maintain consumer awareness and purchase consideration whilst lowering their marketing costs.
The team created an always-on content platform and set up an Onken newsroom where presenters would shoot two films per week giving a round-up of positive and inspiring stories to seed on social media.
Brand tracking results showed that awareness of “Just Good News” exceeded expectations, reaching 6% of their target audience and 20% of their target audience ‘who like brands on Facebook’. Despite almost halving marketing spend, purchase consideration remained constant from the previous year at 91%.
4. Direct Conversion Tracking – ASB Bank
New Zealand’s ASB Bank launched their Like Loan Facebook competition to generate qualified leads for home loans. The idea was simple: users were encouraged to enter the competition by liking the ASB loan rate featured on the Facebook app and, as the rate received more likes, the countdown ticker showed the loan rate dropping in real-time.
For four consecutive weeks one entrant won the loan rate featured at the time of the draw. In total, the campaign generated 21,496 unique entries and 17,778 leads, 11,555 of which were new non-customer relationships. The leads resulted in 229 conversions to home loans, which ASB estimate to be worth approximately $4.5m in revenue given average home loan values.
5. Cost Reduction - BT
BT has demonstrated the business value of social CRM by measuring cost reduction and increased brand loyalty. Setting up social media customer service channels has allowed BT to deflect 600,000+ contacts a year from the more expensive phone channel to social media, saving the business £2m a year. (For more on the use and value of social CRM check out previous post: Social CRM: realising the full value of social media.)
Guidelines for measuring social ROI
The cases demonstrate a set of underlying principles and best practice to use regardless of methodology:
Build in evaluation from the start
- Design your social media measurement approach at campaign planning stage rather than thinking about it in retrospect once execution is in process or even complete.
- Bear in mind that campaign plans may need to be adjusted in order to enable effective measurement, for example revising the weighting of activity or introducing an A/B test.
- Planning the evaluation at this stage will also enable you to set benchmarks for success and make predictions to measure against.
Get back to basics
- Use the basics of traditional campaign planning and measurement to inform your social media approach.
- The first step is to define the objectives of the activity and the role each channel is playing. Once these are established consider the purpose, priorities and timing of the evaluation.
- There needs to be clarity over which decisions the measurement will inform, and whether this will be required in real-time to inform campaign execution or once the activity is complete.
Stop counting, start measuring
- Move away from only counting likes and look at which approaches will measure the business value of your social media activities, whether that be in terms of sales, cost reduction, customer satisfaction or other business KPIs.
- Remember there is no one size fits all approach. You will need to select the appropriate data and methodology for your organisation and your campaign objectives.
Avoid measuring in silo
- Integrate your social media and other marketing activities. Social media is often just one part of the marketing mix and tends to work most effectively in conjunction with other media.
- Design your evaluation approach to take account of the effects of and synergies with other media for an accurate read.
Think about the long-term objectives
- Distinguish between the short-term and long-term effects of your marketing activity. Account for this in your measurement approach and in the way measurement results are communicated internally.
- Activities with call to actions, for example competitions calling for likes, will inevitably result in greater immediate response and online engagement, but they may not necessarily be set up to indicate long-term effects such as brand loyalty, profitability and price elasticity.