Earlier this week (2 Feb) trade bodies IPA, The Marketing Society and Market Research Society published guidelines for marketers that would improve their chances of measuring the impact of social media’s impact on return-on-investment (ROI).
The #IPASocialWorks collaboration, found that when brands tie social media with commercial objectives they are much more likely to get ROI, with case studies showing that Transport for London (TfL), Dorito’s and O2 have seen cases of success when doing this.
O2’s head of social media, Kristian Lorenzon told Marketing Week today (5 Feb) that many metrics are in place at the company to measure the effectiveness of its social media, but the most important and influential of those metrics are aligned to the commercial objectives of the organisation including customer satisfaction, cost savings and revenue.
Lorenzon says: “It’s best to fully integrate social media marketing plans through to business, brand, marketing, sales and service.”
The brand has achieved further effectiveness in two main ways, by linking social media with customer service and tying it with long-term objectives, two of the suggested guidelines by the trade bodies.
Lorenzon told Marketing Week that the most effective social media strategy has been using social data to tell a story about the customer in order to drive positive change and improvement to products and services.
Joel Windels, EMEA marketing manager for Brandwatch – a social media monitoring company, says: “There is now urgency from marketers to look a bit deeper at the data. This is a result of a shift from senior management who increasingly want to see commercial results from social media.”
Is this the end of counting the ‘likes’?
While marketers are aware that simply looking at ‘likes’ and ‘followers’ doesn’t provide meaningful correlations to sales and loyalty to the brand, many still focus on these metrics because it’s easier and more immediate.
Mark Ritson says: “The problem with most social media analysis is that it tends to be very incestuous- only looking at the tiny proportion of the customer base who are engaging with the brand on social.”
Nadya Powell, managing director of Lost Boys, a digital agency specialising in social and content, says: “Brands are much more savvy about social media than they were three years ago, but the immediacy makes it easy to measure the ‘likes’. There are more sophisticated models to gain understanding of ROI, but it takes a long time and a lot of effort to integrate sophisticated systems.”
Although marketers are aware that counting on engagement is not enough, the challenge has been the gap between what brands should be measuring from what they have been measuring, according to Powell.
However, this does not mean that using engagement as a measurement is out of the picture as long as these measurements are used alongside wider business objectives.
Windels told Marketing Week that if you engage with a customer online they are likely to spend 40% more with the brand.
“Clicks and likes along with other measures of engagement are still very good barometers of success, particularly when used to judge the success of content and brand initiatives. However, it is usually the action customers take after these initial interactions that is most important,” adds Lorenzon.
Marketers are not taking action to make the results that they receive from social media meaningful. Windels told Marketing Week that a focus on customer service has not necessarily shown a direct rise in revenue, but it has proved to save brands a lot of money through crisis management.
“It’s also about asking how much money did we save? And how much money did we not spend? ”adds Windels.
Although this has been a proven example of showing positive results for brands, a BrandWatch retail report for 2015 showed that out of 1000 brands almost half did not interact with their consumers even when they were directly contacted by them through social media.