Facebook's Elusive ROI

There’s more to Facebook than “likes,” and there’s more to the measurement of social media than fans. While expanding a social audience with fans and likes is important, it doesn’t help marketers understand how engaged their social audience is.

Who is engaging?  Why are they engaging?  What are they engaging with?  To answer these essential questions, it’s time to start examining new metrics that assess social media performance. You can do this by moving away from page-centric metrics that focus solely on the number of users toward metrics that provide more valuable insights regarding audience behavior. Take this approach and make the consumer the center of your social strategy. 

To begin, understanding a basic metric, such as, “how often users are engaging,” is a good start in assessing the overall activity of your social audience. As we’ve seen with other digital media, social users engage at different rates. Someone who has posted 10+ comments is more valuable and engaged than a segment that has only engaged once. Knowing that someone is an Active engager or a Lapsed Fan will help you determine how to best market to them. 

Next, it’s important to ask – how recently has my audience engaged? It goes without saying that more recent activity is better than activity that came six or six months ago, and an aging or inactive social audience makes it more difficult to drive engagement and provide ROI. Most importantly, audience members who have engaged more recently and with greater frequency are more likely to recommend or influence the social behaviors of others.

Understanding the frequency of activity is crucial for marketers to better assess the behavior of their social audience, but it does have its limits. For instance, it cannot explain the value of a social user.  To do that, connect the first two metrics with a sense of how social activity connects to revenue. Integrating social activity with revenue helps marketers begin to understand how valuable their social audience is. Based on our analysis, we know that a connected Facebook user tends to be worth more than an unconnected user, which reveals that someone who engages socially helps drive more revenue.

This intelligence is useful because provides marketers with a roadmap to engaging different segments of their audience in specific and more effective ways. For example, just as in the world of email marketing, a targeted re-engagement strategy would help encourage users to become active again. Conversely, if a core part of your audience has been more active in the last month, marketers can identify them as an important value segment to focus on by creating and sustaining a reason for these users to stay engaged.

To make these new metrics more actionable, it is helpful to break down Facebook users into groups. We’ve seen this work with an email welcome campaign, so we think marketers should now apply this strategy to their social audience. It might be useful to think of your Facebook audience along the following lines:

  • The One-and-Done - This group of users engages initially but then stops engaging after the initial visit. 
  • The Lapsed - This segment engaged at one time but has not engaged in the last several months.
  • The Trialers - This group connected recently but has not established a pattern of behavior yet.
  • Active - This group of high engagers is the most valuable: regular engagers who engage over a long period of time. The bigger this group, the better.

By recognizing users’ level of engagement, marketers will be in a better position to drive marketing strategy, which in turn will lead to better results. Translating user-centric metrics into new marketing opportunities will help drive better social performance. It’s time to stop making social decisions based on page-centric metrics. Take off the social blinders and start connecting with your audience based on their level of interaction. 

3 comments about "Facebook's Elusive ROI".
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  1. Christine Bon from Advocate Health Care, March 9, 2012 at 1:52 p.m.

    This is great. But, how to I begin to identify my fans to group them? I don't see a way to drill down this deep in Facebook insights.

  2. Michelle Bonat from RumbaFish, March 9, 2012 at 4:45 p.m.

    Rich -
    What a great read! Especially the part about "By recognizing users’ level of engagement, marketers will be in a better position to drive marketing strategy, which in turn will lead to better results".
    We should talk - my company creates social analytics tools. I'll DM you.

  3. Sean Grace from Strategic Franchising, March 9, 2012 at 4:52 p.m.

    Very good tips on getting more out of your online relationships with customers. Grouping them is a great way to understand who you should be engaging with and how. My company is in this space offering social apps that provide a measurable ROI. Our technology allows brands to offer exclusive social deals to fans that require sharing. When those deals are redeemed, we track that redemption to the exact customer using it and provide valuable data for re-marketing campaigns.

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