r.o.i.   2

The basics of social media measurement for business.
Today’s article was prompted by The Now Revolution co-author Jay Baer’s blog post entitled The 6 Step Process for Measuring Social Media. Consider the following 5 sections a complement to the social media measurement discussion in the business world. Bookmark it, pass it on, and feel free to ask questions in the comment area if something isn’t clear.

Let me explain, for anyone who is still confused about it, how to properly think about the integration of social media measurement into business measurement. This applies to the way social media measurement is applied to every business activity social media touches,  from short-term product awareness campaigns to long term customer retention programs.

To make things simple, I will make use of a few diagrams to illustrate key concepts everyone who touches social media in the business world absolutely needs to understand.

Ready? Here we go:

1. Measuring Social Media: Activity and outcomes.

The above image shows the relationship between an activity and the measurable impact of that activity on social media channels. The ripples represent every type of outcome – or effect – produced by that activity, which can be measured by observing, then quantifying certain key behaviors on social media channels. A few examples:


When social media “experts” and digital agencies that provide social media services talk about social media measurement, this is what they are talking about.

So far so good. The trick is to not stop there.

2. Measuring Social Media: Activity and outcomes beyond social media channels

Now that we have looked at basic “social media measurement,” let us look at it side-by-side with business measurement – that is to say, with metrics that existed long before social media ever came on the scene. A few examples:

Net new customers
Changes in buy rate
Loyalty metrics
Word of mouth
New product sales
Customer satisfaction
Increased operational efficiency
New online orders
Traffic to brick & mortar stores
R.O.I. (you knew it was coming.)

In other words, the types of metrics that indicate to a business unit or executive team whether or not the activities they have funded and are currently managing are having an effect on the business. These types of metrics are represented in the above diagram by the black ripples.

To some extent, you can also include a sub-category of metrics not directly related to business measurement but that also exist outside of the realm of social media measurement. These types of metrics typically relate to other types of marketing & communications media such as print, TV, radio and even the traditional web. A few examples:

Unique visitors
Bounce rate
Cost Per Impression (CPI)

These types of metrics, for the sake of this post – which aims to clarify the difference between social media measurement and social media measurement within the broader context of business measurement – would also be represented by some of the black ripples in the above diagram.

3. Understanding that “measuring social media” is a terribly limited digital play.

 If you remember only one thing from this article, let it be this: Only measuring “social media” metrics, as if in a vacuum, leads absolutely nowhere. Sure, if your objective is to build a “personal brand,” boost your “influence” rankings in order to score more goodies from buzz marketing firms that do “blogger outreach,” then those social media metrics are everything. Chasing those followers, collecting likes and retweets, meeting that 500 comments quota of comments on Quora every day, and religiously checking your Klout score and Twittergrader ranking every twenty minutes is your life.

But if you are a business, that is to say, a company with employees, products, payroll, a receptionist and a parking lot, the role that social media measurement plays in your universe is not exactly the same as that of a semi-professional blogger trying to tweak their SEO and game blogger outreach programs. These two universes are completely different. Their objectives are completely different. Their relationships with measurement are completely different.

Understanding this is critical. Bloggers with no real business management experience tend to have a very difficult time bridging the strategic gap between their limited digital endeavors and the operational needs and wants of organizations whose KPIs are not rooted in Facebook, Twitter and Youtube.

It should come as no surprise that the vast majority of social media “experts” and “gurus” – being first and foremost bloggers with experience in navigating affiliate marketing programs, and a commensurate focus on SEO and social media “influence” gaming models in support of their “personal brand” – tend to see the world through that specific prism. The problem however is this: Their focus on social media measurement may be spot on when advising other would-be bloggers, but it is completely off target when advising business clients whose business models are not entirely based on selling advertising on a website and scoring goodies from advertisers in exchange for positive reviews and buzz.

In other words, when social media “experts” keep telling you how to “properly” measure social media – as if your measurement software didn’t already do this for you automatically – consider this an indication that they have absolutely nothing else to talk about when it comes to social media integration into your business. Their understanding of social media activity and measurement is entirely founded on their own experience as a blogger, and not – unfortunately – on the experience of the business managers they aim to advise, whose objectives and targets have little to do with how many fans and followers and likes they manage to collect from month to month.

One of my biggest areas of frustration for the last few years – and one of the principal reasons why social media has been so poorly integrated into the business world until now – has been the ease with which bloggers with little to no business management experience have hijacked the social media “thought leadership” world. Many of them would not be qualified to run an IT department for the average medium-sized business, much less help direct the strategy of a digital marketing department, customer loyalty program or business development group. Their understanding of the most basic, rudimentary business principles (like R.O.I.) is as painfully lacking as their dangerous lack of practical operational experience – in change management, for example – without which social media theory cannot be aptly put into practice. Yet here we are, or rather here companies are – many of which are listed in the Fortune 500, listening to bad advice from the most inexperienced business “strategists” on the planet, and trying to apply it – in vain – to their businesses.

If you are still wondering why your social media program is not bearing fruit, or if you are still confused by social media measurement, this is the reason why.

A metaphor lost in a hyperbole.

The tragic irony of the general state of confusion created by this army of so-called experts is that in spite of everything, social media measurement is not complicated. If you can type a password into a box, navigate a multiple-choice questionnaire and use your mouse to click on a “generate report” button, you too can measure social media. All you need is the right piece of measurement software, an internet connection and a pulse. You don’t even need to know how to send a tweet to do it.

I am not kidding. A monkey could do this.

The sooner business managers, company executives and agency principals stop listening to social media douchebags, the faster social media will be integrated (smoothly and effectively) into everyone’s business models. Don’t limit yourself to measuring social media. Stop listening to business advice from bloggers with no business experience. And don’t buy into the notion that because social media is new and digital, it is complicated. Social media is easy. Social media measurement – by itself – is easy. It takes work and diligence and clear vision, but all in all, it doesn’t take a brain surgeon to figure it out.

4. Once you get rid of the monkey noises, you make room for the simplicity of the (social) business measurement model.

The above diagram illustrates both the measurable social media outcomes (in orange) and the measurable business outcomes (in black), based on an activity (the solid orange ball). We have covered this earlier in this article. By now, you should understand two key principles:

1. Measuring only social media outcomes (or measuring them separately from business outcomes) won’t get you very far. It’s what you do your first month. Then what?

2. Only by establishing a relationship between social media metrics and business metrics will you be able to gauge both the impact and value (including but not limited to R.O.I.) of social media on your campaigns, programs and overall business.

How you connect social media outcomes/metrics to business outcomes/metrics is covered elsewhere on this blog and of course in the Social Media ROI book, but if this diagram doesn’t confuse you, try to conceptualize the relationship between social media outcomes with business outcomes by observing the intersect points between the orange ripples and black ripples. (See above diagram.) Your investigation of the correlation between the two will always begin there.

5. One final tip: Turning your integrated measurement model into a social media tactical plan.

These diagrams only serve to illustrate how you should think about social media measurement in conjunction with business measurement. That’s it. But if you take a step back and look at the interaction between social media outcomes (measurable behaviors in social media channels resulting from a … [more]
conference  social_media  advertising  agency  blog  book  brandbuilder  business  business_development  client  digital  integration  marketing  Mashable  measurement  media  olivier_blanchard  R.O.I.  ROI  social_business  social_media_day  strategy  web  from google
may 2011 by pratapdsingh
What the McDonald’s social media team got wrong about Foursquare, Social Media strategy, measurement, and ethical reporting.
Alternate title:

Thanks to Mike Zavarello (@brightmatrix) for the #McFib suggestion. I wish I had thought of that.

Okay. This is not going to be a kind, warm and fuzzy post. Before I start, let me say this: I would much rather have a brilliant Social Media case study to champion. A story about a company doing something right, with data to back up its results, clean metrics to boot, and flawless analysis from start to finish. Wieden + Kennedy’s Old Spice campaign will soon be the subject of such a post, when more sales numbers are made available. But as things stand, this post is not going to be about a company that got things right.

What we are going to talk about today is either a case study in either poor journalism (Mashable reported on the story without questioning and verifying the math), or the origin of questionable claims by a McDonald’s representative about a Foursquare promotion’s alleged outcome. I don’t want to speak ill of the company (I actually like McDonald’s), but I can’t not bring this up.

(UPDATE: 19 September 2010) Look for an update to this story at the end of the post.

Here is how the story begins (via Mashable):

At the Mobile Social Communications conference yesterday, [Rick] Wion shared that McDonald’s was able to increase foot traffic to stores by 33% in one day with a little Foursquare ingenuity. McDonald’s total cost for the successful campaign was a measly $1,000.

Econsultancy reports that McDonald’s, with Wion driving campaign direction and strategy, opted to try and take advantage of Foursquare Day (4/16) to bring in more business. The company used 100 randomly awarded $5 and $10 giftcards as checkin bait to lure in potential diners. The bait also worked to attract the media’s attention and resulted in more than 50 articles covering McDonald’s Foursquare special.

The campaign worked in both digital and real world capacities. Patrons flocked to McDonald’s restaurants for the chance to win giftcards in exchange for checkins, and 600,000 online denizens opted to follow and fan the brand on social media sites.

The Econsultancy piece is here. Sounds great, right? Here is what you just heard: McDonald’s spent $1,000 on a campaign, leveraged Foursquare to get people in the door, and increased foot traffic by 33%, resulting in some unknown but probably decent spike in business (sales.) Except no. That isn’t what happened. There’s also this:

Of course, the metric here was checkins (not sales), and there were likely several other factors contributing to the campaign’s success, but it’s still a story that many an agency should pay heed to.

Let me quote that again, in case you missed it:

“The metric here was checkins (not sales).” Or actual foot traffic, apparently.

Oh. Take the pig off the spit – the celebration might be a little premature. Right idea, wrong execution, and horrendous analysis. Let me explain.

1. In spite of its “conclusion,” did McDonald’s measure actual foot traffic?

This was a test. The premise was this: If we spend $1,000 on a Social Media promotion using Foursquare, can we get more people in stores? The most important metric to measure then, both as a baseline and an ultimate outcome would be what?

Foot traffic. Actual foot traffic. As in… someone with a clicker standing at the door, a laser in the door way recording how many times someone passes through it, or a sensor in the door recording how many times it opens and closes. Unfortunately, unless Mashable forgot to mention it, McDonald’s did not actually measure foot traffic.

Wait… what?

That’s right: Though Rick Wion claims to have increased foot traffic by 33%, nowhere does the piece mention that McDonald’s actually measured foot traffic. The only metric mentioned: Foursquare Check-ins.

The one thing McDonald’s should have measured, the very metric Rick Wion is reporting jumped by 33% in one day, is the one metric that may not in fact have been measured at all.

Here is how you measure deltas/changes in foot traffic:

1. Lock in your baseline (the average daily foot traffic before the campaign).

2. Measure average daily foot traffic during your campaign.

3. Compare the two.

What you measure are actual people actually walking into actual stores, not people checking-in from their phones three blocks away or clicking a “like” button on Facebook from their desk, or clicking “follow” on their twitterberry. You measure people in the stores.

If McDonald’s Wion wants to report on a win (as well he should), it should be this: “With only $1,000 investment, we increased Foursquare check-ins by x%.” That is what actually happened. This is the extent of a win. It isn’t as sexy as claiming a 33% increase in foot traffic, but it’s a start. A proof of concept. Something McDonald’s can now build on and expand.

I now leave Ronald McDonald’s Social Media team and Rick Wion to explain how exactly how check-ins conveniently transformed themselves into foot traffic.

2. Metrics are not randomly interchangeable:

Here’s a simple, basic, no BS fact of Social Media performance measurement: A Foursquare check-in is not foot traffic. Foot traffic is not a Foursquare check-in. Here is the difference between the two:

- Foot traffic is someone coming into your store.

- A Foursquare check-in is someone within five city blocks of your store pushing a button on their phone.

Case in point:

@lizy_dee: I just checked in to some McDonalds up the road while I’m sitting on my couch at home.. #fail

Likewise, mentions are not sales, and new followers aren’t new customers. Metrics are not randomly interchangeable. Metrics are specific. Don’t measure one thing and magically turn it into another to embellish your quarterly report and get some media attention.

3. Contests are not strategies. People will do anything for free stuff and then move on:

“Do this and you might win something. One day only!” Here, McDonald’s has at its disposal the combined power of the Social Web and mobile phones, with a potential reach of hundreds of millions of people. It has a chance to increase net new customers, increase customer loyalty, earn mind-share, impact preferences and customer habits in the long term… But no. McDonald’s big Social Media idea was to attach the typical one-day-only contest carrot – which requires neither Foursquare nor Social Media of any sort – to get people into its stores for one day (which it may not have actually accomplished since it measured the wrong thing).

I will, however, grant McDonald’s Wion this: His experiment proved that promotions in which people might win free stuff if they push on a button will make some of them push the button. Unfortunately, we already knew that. We can get lab rats to do it as well, even without a social media strategist.

The fact is that tying Foursquare check-ins to a promotion doesn’t prove that Foursquare will work for you, or that you know how to leverage it yet. The Foursquare check-in feature is a button people push to get their prize, not the reason why they came to your store. Let me illustrate:

Replace the term “Foursquare check-in” with “funny hat”.

If your promotion had asked people to wear a funny hat to your stores for a chance to win a gift card, would you be saying that funny hats helped you generate 33% in additional foot traffic? Here’s an example:

At the Mobile Social Communications conference yesterday, [Rick] Wion shared that McDonald’s was able to increase foot traffic to stores by 33% in one day with a little funny hat ingenuity. McDonald’s total cost for the successful campaign was a measly $1,000.

The company used 100 randomly awarded $5 and $10 giftcards as checkin bait to lure in potential diners. The bait also worked to attract the media’s attention and resulted in more than 50 articles covering McDonald’s funny hat special.

Patrons flocked to McDonald’s restaurants for the chance to win giftcards in exchange for wearing funny hats.

See what I mean? What’s your Foursquare strategy again? Is it the same as your funny hat strategy or your pink tie strategy or your flip-flop strategy?

Here’s a little dose of reality: This was a promotion just like every other promotion before it. Push the button we ask you to push, give us the magic password, and maybe win something. Foursquare was an accessory, not the catalyst. Even if McDonald’s had actually seen a 33% increase in visits to their restaurants on that day, the gift card promotion, not Foursquare, got people to participate.

4. “It’s still a story that many an agency should pay heed to.” Um, no. Absolutely not.

Unless what you want to do is teach agencies that not measuring relevant campaign outcomes, mistaking one metric for another, making up numbers entirely, not understanding basic Social Media marketing strategy and having no clue how to tie campaign metrics to business metrics is the right path.

There is already plenty of that going on on. We need less of it, not more.

5. Take your case studies seriously: McDonald’s should have measured conversions. Here’s how to do it:

What Rick Wion and his team should have done:

600,000 new fans and followers? That’s “Reach.” That’s your starting point. Here’s your conversion chart:

Reach → Response → Visits → Foursquare Check-ins → Transactions → Revenue (then repeat)

Don’t know how to put these things together? It’s simple:

Reach, we’ve already touched on.

Responses can be anything from RSVPs on Facebook, to registrations or sign-ups on a microsite, to mentions to RTs on Twitter.

Visits are your first real measurable conversion. You actually have to count visitors. Not estimate but count. If the suggestions I made earlier in the post are not feasible, look into software that will allow you to count visitors by analyzing your CCTV feeds. (Your surveillance cameras capture foot traffic in and out of the store, and to the cash register. Put them to good use.)

… [more]
account_planning  ROI  Social_Communications  social_media  brandbuilder  foot_traffic  foursquare  Mashable  McDonald's  measurement  metric  olivier_blanchard  R.O.I.  revenue  Rick_Wion  success  transactions  from google
september 2010 by pratapdsingh

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