The social lens

Module 2 - Instructor Post

Return on Investment

While return on investment is traditionally associated with things like RRSPs and stock market investments, it has also found its way into social media metrics and, as applied to choices in marketing and communications, analytics.

There are many people who will argue that it is impossible to put a value on a relationship.  There are others who believe they have pinpointed the value of a Like on Facebook.  

The default position - quantitative measurement - still lives but with social media companies can’t ignore the network effect.

Metrics for ROI - Return on investment is a calculation. ROI = (Gain from investment minus the cost of the investment) divided by cost of investment.

ROI can be a helpful tool in that it helps you understand – from a historical perspective – how well your social media has preformed.  This can be valuable because it can help you make sense, in monetary terms, of how much you invested and how much value you received.

However, ROI has also some limitations that are important to share. Consider this concept from Weinberg & Pehlivan (2011).

Traditional Approach = Quantitative measures

Social Approach = Quantitative AND Qualitative

As you think about measures and ROI, Blanchard (2011) suggests it is important to draw a clear distinction between two types of “currency” – financial and human.

A good way to differentiate between the two: cost reductions and increased revenue are financial. Human currency is everything else.

Examples from Blanchard (2011) of human currency in online measurement :

• Increase in unique website visitors
• A change in positive mentions
• A change in negative mentions
• Net new Facebook fans
• Net new Twitter followers
• An increase in visits to a brick and mortar retail store
• Increased time spent on website
• A change in volume of impressions
• The number of times an article was liked or shared
• The number of comments on a blog post

Examples from Blanchard (2011) of financial currency in online measurement:

• A 16% reduction in cost by shifting a portion of customer service tickets on Twitter
• $1.2M increase in sales
• A 16% increase in online sales during a Facebook promotional campaign
• Decreased cost per impression from $2.62 to $0.76 by leveraging social media channels

Measurement of human currency tells the story by capturing changes in customer behavior. They give us snapshots of what happens between the time a program is assigned its budget and the time it yields a measureable return.

Three Cornerstones of Online Metrics

Social media is about content.  You create and curate content for people to relate to.  The relationships form around the content that you contribute. The social part is the relationships.  The media part is your contributions.

When you are evaluating, you are measuring people’s (the social part) reaction to the content (the media part).

So what constitutes a measurement of people’s reaction to the content?

• People's behaviour with content.
• People connecting with content.
• People connecting content with other people. 

In Measuring what matters: The best metrics for measuring social media effectiveness from comScore (2013) this is described as Content, Growth and Engagement, and Audience.

1. Content Metrics - What makes content shareable?

Measuring your content type:

• Photo
• Status
• Video
• Link

Measuring time of day and day of week combinations:

• Determine when are people most active on your website or social media channel

Measuring topics and calls to action:

• Call to comment, ‘like’, share, or website
• Ask a question

2. Growth and Engagement Metrics

• Unique engaged audience (not just fans or followers)
• Amplification (shares and retweets)
• Consistent activation (average post and tweet engagement with your business)

3. Audience Metrics

• Percentage of returning users
• Frequency of activity (share/like/retweet)
• Demographics
• Percentage of shares and retweets

The online metrics are things to measure.  There is an aspect of SO WHAT?  attached to this.  So what if you’ve measured content, growth and engagement or audience?  What does it mean to you?

There are a variety of methods of analysis that can be done on data that you collect to decide SO WHAT?  And to share it with other people, who will likely then ask you NOW WHAT? (As in, what decision should we make based on your analysis?)

One approach to SO WHAT is Sentiment Analysis

Sentiment = feelings (attitudes, emotions, opinions). They are subjective impressions, not facts. So while you might be tracking how many shares or “likes” you achieved without understanding the context or sentiment behind that share you lose some valuable data that happens in the comments people exchange.

Questions sentiment analysis might ask (European Masters Program, 2013):

• Is this product review positive or negative?
• Is this customer email satisfied or dissatisfied?
• Based on a sample of tweets, how are people responding to this ad campaign/product release/news item?
• How have bloggers' attitudes about the prime minister changed since the election?

It is used frequently to gain business intelligence. For example: “Why aren't consumers buying our laptop?”  (European Masters Program, 2013). We know the concrete data: price, specs, competition, etc. We want to know subjective data: “the design is tacky,” “customer service was condescending”. Misperceptions are also important, e.g. “updated drivers aren't available” (even though they are).

Humans are subjective creatures and opinions are important. Being able to interact with people on that level has many advantages for understanding your current and potential customers.

Challenges with Sentiment Analysis (European Masters Program, 2013):

• People express opinions in complex ways
• In opinion texts, content alone can be misleading without the accompany voice tone for example
• Topic change is common and hard to track
• Rhetorical such as sarcasm, irony, implication, etc. are difficult to determine

Ways to track sentiment include (European Masters Program, 2013):

• Key words
• Emoticons

Things to consider (European Masters Program, 2013):

• What elements do you want to classify, rank, or score?
• What classification/scale do you want to use?

References:

Blanchard, O. (2011) Social Media ROI: Managing and Measuring Social Media Efforts in Your Organization. Pearson Education, Inc. Boston, MA.

comScore (2013). Measuring what matters: The best metrics for measuring social media effectiveness. Retrieved from https://www.comscore.com/Insights/Presentations-and-Whitepapers/2013/Measuring-What-Matters-in-Social-Media

European Masters Program (2013). Language and Communication Technologies.Introduction to Sentiment Analysis. Retrieved from http://lct-master.org/files/MullenSentimentCourseSlides.pdf

Weinburg, B. & Pehlivan, E. (2011). Social spending: Managing the social media mix. Business Horizons, Vol. 54, pp. 275-282.