Twittering Away Time And Money

One of the most common questions I'm getting these days is "how should I measure the value of all the social marketing things we're doing like Twitter, Linked-in, Facebook, etc.?"

 

My answer: WHY are you doing them in the first place? If you can't answer that, you're wasting your time and the company's money.

Sounds simple I know, but I'm stunned at how unclear many marketers are about their intentions/expectations/hypotheses for how social media initiatives might actually help their business. In short, if you can't describe in two sentences or less (no semi-colons) WHAT you hope to gain through use of social media, then WHY are you doing it? Measurement isn't the problem. If you don't know where you're going, any measurement approach will work.

Here's a framework for thinking about social measurement:

1. Fill in the blanks: "Adding or swapping-in social media initiatives will impact ____________ by __________ extent over _____________ timeframe. And when that happens, the added value for the business will be $_____________, which will give me an ROI of ______________. " This forms your hypotheses about what you might achieve, and why the rest of the business should care.

2. Identify all the assumptions implicit in your hypotheses and "flex" each assumption up/down by 50% to 100% to see under which circumstances your assumptions become unprofitable.

3. Identify the most sensitive assumption variables -- those that tend to dramatically change the hypothesized payback by the greatest degree based on small changes in the assumption. These are your key uncertainties.

4. Enhance your understanding of the sensitive assumptions through small-scale experiments constructed across broad ranges of the sensitive variables. Plan your experiments in ways you can safely FAIL, but mostly in ways to help you understand clearly what it would take to SUCCEED -- even if that turns out to be unprofitable upon further analysis. That way, you will at least know what won't work, and change your hypotheses in #1 above accordingly.

5. Repeat steps 1 thru 4 until you have a model that seems to work.

6. In the process, the drivers of program success will become very obvious. Those become your key metrics to monitor.

In short, measuring the payback on social media requires a sound initial business case that lays out all the assumptions and uncertainties, then methodically iterates through tests to find the model(s) that work best. Plan to fail in small scale, but most important, plan to LEARN quickly.

Measure social media as you should any other marketing investment: How did it perform versus your expectations of how it should have? If those expectations are rooted in principles of profit-generation, your measurement will be relevant and insightful.

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11 comments about "Twittering Away Time And Money".
  1. Larry Czerwonka from happinessu , June 30, 2009 at 3:42 p.m.

    "social media" is no different from anything else that is used in our lives. without goals and objectives and measurements made over time, it is just a time waster. but if you have objectives and goals then social media is a great means for branding, raising awareness and collecting loyal customers.

  2. ian alexander , June 30, 2009 at 3:43 p.m.

    I too am baffled by the "I just got on a plane" and "check out what I am amused by" links from credible companies. But I am often more dumbfounded by how this actually works to their benefit. To this end: How do you measure "hype"? And furthermore, at what point does self-promotion start to erode credibility?

  3. Brandi Heinz from Follett Software Company , June 30, 2009 at 3:44 p.m.

    I like these ideas, do you have any hard examples? For instance, we are looking at it from a branding and awareness viewpoint - how do we associate $ with that? Or increasing website traffic, etc. Thanks!

  4. Trevor Stafford from Red Canary , June 30, 2009 at 4:02 p.m.

    Great insight, just be careful that you don't let your need for measurement impact your message in the early going. You can't walk into a party thinking "I'm going to impress 5 people tonight!". The only impression you'll leave is that of blowhard or wanker.

    Social media is a bit different than, say, direct mail. There's a much better chance you'll create negative word-of-mouth and then compound it.

    I absolutely agree with #4. This is the philosopher's stone of social media. Small, well-communicated, open-channel failures that define success.

    Ultimately I can't help but laugh a little at people who want to measure the hell out of social marketing. The outlay is insignificant compared to the return, and really, what you're asking is 'how do I justify the cost of channels that let my customers tell me what they think or converse on a regular basis'.

    When you boil it down 'social media initiatives' are just another way to stick people in a room and let them talk while you mostly listen. If you can't justify that in your budget....

  5. Brad Stewart from Adjoy , June 30, 2009 at 4:16 p.m.

    I haven't seen SM strategic planning explained more perfectly than here. Delicious.

  6. Rodolfo Mercader from M Interactive , June 30, 2009 at 4:29 p.m.

    Even though I totally agree with this article. I also believe that you can't measure Social Media the same way we measure all other media. The "traditional" ROI will always be zero, because something divided by zero is zero. I always say that ROI in Social Media refers to "return on impact" and that you need some kind of measurement for the impact (which differs for everybody)

  7. Patrick Fitzgerald , June 30, 2009 at 8:37 p.m.

    New Media, New Methods; New Measures. As the media landscape itself evolves so should the methods of usage and as a function of that, so should measurement In my estimation "new media" is over cooking the measurement piece as it is. While newspaper and radio failed to evolve measurements in a timely way, TV has managed to avoid the scrutiny that digital puts to itself. Imagine beer brands demanding that networks certify that viewers "engage" with the brand when a commercial airs.
    To my eye, Dell is a company to watch to define practices in micro blogging. They offer value to consumers with every post, the message resonates and results in sales. Seems easy enough to measure.
    To be sure, what "I'm doing right now" is questionable content with little or no measurable value, but evaluating new things using classic measures can sometimes miss the mark.

  8. Allen Maccannell from SenderOK , July 1, 2009 at 2:33 a.m.

    If you tweet relevant links and comments, especially when you RT (retweet) people you may like to have a business relationship with, you can establish that you are not later "cold calling" when you actually call them on the phone or send an old fashioned email about an important idea.

    Nothing gets someone attention better than when someone retweets (repeats) what they wrote. It is human nature to be highly flattered when this happens. Of course, don't ever RT a comment from someone that isn't really worthy of being retweeted. You don't want to appear insincere. But your would-be prospects are likely to be highly intelligent people who often post profound or relevant things anyway.

    Your interests will obviously lie in the same area - by definition.

    So IMHO Twitter is about indirect relationship building and you can do this on a large scale with dozens if not hundreds of prospects.

    Now that wasn't two sentences and I could go on.

    By reading the Tweets of those in your industry, you really get to know how they think which would help you deal with them even if you never Rt'd them or messaged them on Twitter or Facebook itself.

    Following someone is like condoned spying.

    Twitter is like one big trade show that one has to be at.

  9. Allen Maccannell from SenderOK , July 1, 2009 at 2:45 a.m.

    Here is an example: If United Airlines were to RT something I wrote, proving that they were reading my personal timeline because an employee found my prose interesting, I would be so flattered that I would book my next flight on United. I see this happening all the time on Twitter. People are tweeting "I cannot believe the CEO of such and such corporation just RT'd me - Now I'm a customer for life."

    Although the effects are indirect, I suggest you can measure ROI by the number of RTs that your company makes about others.

    Twitter is "Pay it Forward" writ large.

    Note an RT is the opposite of a pitch or DM which might be considered spam.

    Twitter spammers almost never take the time to "selflessly" look at what others are writing and RT. If they did, they would be less of what I would call a spammer.

  10. Jared stivers , July 1, 2009 at 12:23 p.m.

    Great question Pat "Why should you measure social media?"
    Two reasons, first in order to manage it. We all know the old phrase you can't manage what you can't measure. To that end understanding your share of the conversations as it relates to your product category, a new initiative (such as green tech) or your brand as a whole gives a marketer an excellent view into how effective your marketing is.

    Secondly social conversations are happening already, ignoring them does not make them go away. Using social media to communicate directly with customers is an insanely cost effective way to directly influence how a company is perceived.

    How exactly to measure them? Technology and statistics,

  11. Joe Hasselwander from Tangence , July 1, 2009 at 9:12 p.m.

    Pat is challenging all of us to get back to basics when measuring and understanding SM, which I think is great. There is more than a passing resemblance between this era in marketing and the dot-com euphoria of the late 90's. What's different? I'd say economic conditions (worse), and barriers to entry (lower).

    This is creating anxiety in all but the most cutting-edge, nubile marketers: No one wants to be sitting on the sidelines if SM is that lean-times silver bullet. It probably isn’t, but for motivation, Jared’s “train has left the station” point is good to keep in mind.

    The rules and ROI for SM are clearly different. So to master it, I think we’ll need the patience many of us don't have, and the discipline that is such a luxury these days. That's why I also love #4 above: Take the risk, but dabble, measure, then dabble and measure again – it’s OK to fail. Eventually you will find the right use of SM for your business.