For those marketers that have experimented with social media for the last year and experienced some success and failure, they have learned that there is a value using social media and it resonates in many ways – better organic search results, increased web site referrals and activity, etc. For most, the best they can do is focus on episodic measures of success that include referrals, click-through and open rates. A few are honing in on more meaningful metrics that include returns on investment (ROIs), engagement value, and other more substantial metrics that align with existing channel data metrics.

Marketers realize that in order to substantiate and increase their human and capital investment in social media, they must come up with $$$ aligned with actual metrics to expand their budgets. The demand to make marketing more accountable becomes more insistent every year and 2010 is the year that the social media measurement will yield accurate ROI which will demystify marketing’s impact. The statistical techniques behind these analytical models will untangle the effects of social media’s impact on multiple online and offline channels.

How will marketers do it?

1. Correlate social media activity to channel activity and merge traditional metrics with social metrics.
2. Generate intelligence (i.e., engagement, reach, sentiment, demographics, etc.) based on metrics sourced from channel activity and the social web.
3. Identify key performance metrics that drive performance through all online and offline channels and break them down into metrics that drive inbound and outbound activity.
4. Calculate the ROI from these KPIs based on your investment to improve your outbound activity and yield higher inbound activity.

Marketers have to understand that social media is a channel to use but what exists in the greater social web, is a wealth of data that can justify the value of using social media to improve all channel performance if it is aligned with traditional metrics. And marketers will be on front line of the social media measurement trend that includes an increase in interactive marketing spending (expected to hit $55 billion and represent 21% of all marketing spending by 2014 - by Forrester) if they begin to draw the correlations now.

This is the year that social media analysis and measurement matures into its own right and empowers marketers beyond taking a leap of faith that social media has a positive impact on all of their channels and actually demonstrating its value with mined intelligence and metrics.

Tags: Social Media ROI

This entry was posted on Friday, January 8th, 2010 at 2:23 PM by greatmin and is filed under Wendy Troupe's Perspectives. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.