economics of social media

For years I’ve admired the real-world insights and experienced perspectives of Steve Goldner, perhaps better know as @Social Steve.  I’m pleased that Steve has agreed to be the newest Contributing Columnist to {grow} and I know you’ll enjoy his work!

By Steve Goldner, Contributing {grow} Columnist

I head up social media at a performance marketing agency in New York City and I will tell you, everyone is interested in social media! But getting people to buy in and commit to social media takes MUCH more than having a shiny object.

It might be easy to get in the door, but you must show relevance to business KPIs (key performance indicators) to get commitment for social media. And budgets shift all the time so social media MUST show continuous measurable results. Social media accountability means delivering and demonstrating growth in all relevant parameters that are inputs and building blocks to stated KPIs.

So how do you even go about this?  Here are three simple suggestions that will definitely put you on the right path:

Understanding the Business you Represent
Make sure you know EXACTLY what your company stands for. Formally document a position statement, target market to serve, value proposition you provide for your customers, as well as the communication objectives of the company. Share this with stakeholders of the company and make sure you have concurrence.

This is an extremely important first step for social media because your “social” activities should be aimed at reinforcing your position and value proposition and be targeted to the right people. This does not mean that you are going to explicitly communicate these positions, but you should reflect on these formal documents and look to support your brand position and values when you design your owned media.

Don’t “Post” –  Publish
There are two missions when running a blog and/or community: 1) attract new readers/users, and 2) make sure the existing audience comes back. The nuance between posting and publishing is the difference between simply putting up some words (i.e. posting an article name and URL) versus gaining peoples attention and getting them interested. As an old (CMO) boss of mine would always say – “words are important.”

And if we look at the missions stated above, it is more than just using compelling, engaging words. Plan how your owned media will get easily shared. Build strategy and tactics to get earned media.

Deliver Metrics that Matter to Executives
Executives think in terms of a sales funnel. Yes, I think the funnel is dead (and I have covered that), but that does not really matter if your customer thinks otherwise.

You have to show results in a manner that is relevant to the stakeholders’ perspective. This means being able to measure awareness, consideration, loyalty, and advocacy. Notice I did not mention sales. Social media is generally a weak vehicle for direct sales, BUT awareness, consideration, loyalty and advocacy ALL contribute to sales.  Here are a few thoughts (there are many more) on how to measure each:

• Awareness – is typically generated beyond your digital assets. If someone is on your website, blog, or Facebook page, they have already become “aware.” So use a social media monitoring tool. Measure the number of mentions of your brand or website URL.
• Consideration – shows up by checking out your brand and from a digital perspective this can be measured by how many come to brand website. Look at onsite parameters such as visits, pageviews, and time onsite.
• Loyalty – comes when individuals engage with brands and literally say, “I want in.” Easy loyalty measurements include number of comments and interactions, sign up on sites, and the number of friends and followers. Individually, none of these items show loyalty, but looking at them collectively provides loyalty insights.
• Advocates – publically reference your brand. This can be measured by capturing the number of retweets, reblogs, mentions, and positive sentiment for your brand.

Let’s address how these numbers should be considered in context of an overall marketing program.

Looking at specific numbers for a given month really doesn’t tell you anything. And seeing a drop from one month to another or seeing a rise from one month to another should not necessarily alarm you or be cause for celebration, respectively. You will likely see zigzag fluctuations each month based on many confounding events and factors you cannot control.

The relevant information comes from a statistical evaluation of a normalized curve over a number of months, perhaps a 12-month sliding scale. Realistic and true social media success is captured over time and short term successes are probably not be a true indication of market reality.  Can you represent a 5-10% growth in each area month-to-month on the normalized curve? Now that’s meaningful success!

Winners in the social media space have a game plan, meaningful + relevant metrics, and the right people to both execute the plan and provide the appropriate analysis.  Do you have a plan?  Do you feel you have the right talent on board?  How is this changing for you and your company as social media matures as a channel?

Steve Goldner is the Senior Director at MediaWhiz where he leads the social media practice. Steve has been a marketing executive for the past 20+ years and engaged in social media for the last 4 years. You can follow him on Twitter @SocialSteve and visit his own blog at http://socialsteve.wordpress.com .