Monetising and measuring social media - basic principles
Over the last few months more companies have started to experiment with a whole host of new media channels, including social networking sites and microblogs.
When planned adequately, social media can provide an effective means of reaching new customer segments, forming closer relationships, and building online reputation.
However, it was clear from E-consultancy's Social Media: Measurement, Managing Reputation and Monetisation event last week that marketers face a range of different challenges as the social media landscape continues to evolve and grow.
Since social media covers a broad spectrum of digital media, coming up with hard-and-fast rules which are universally applicable can be problematic.
But regardless of which websites or channels companies choose to engage with, there are some basic principles to be followed when embarking on social media campaigns that can be applied across the board.
Know what you want to achieve
Prior to starting a social media campaign, it’s essential to tie down exactly what you want to achieve and then ideally, how it can be measured.
There are a whole host of tools available to measure the effectiveness of social media, which are highly useful in assessing the “before” and “after” results of a campaign. It’s important to have metrics in place that measure both volume, and influence and assess online reputation.
Tools such as Magpie’s Brandwatch, Nielsen Buzzmetrics, and Onalytica’s InfluenceMonitor are useful for measuring online reputation, whereas Hitwise, comscore and Alexa can be used for monitoring volumes.
These tools can be expensive though, and for companies who are limited by either restricted budget or time, there are many free tools to measure online reputation and social engagement, such as Google Alerts, built-in del.icio.us metrics, and Twitter tools such as Summize and Twist.
At last week's event, Penguin's Anna Rafferty talked about how the publisher had recently launched a MySpace campaign for the upcoming James Bond novel, Devil May Care, where MySpace’s music community was invited to write, record and perform the music for a new Bond theme tune.
As well as looking at MySpace’s in-built metrics such as the number of friends added, the success of the campaign is not only demonstrated by the number of competition entries and consequential videos on YouTube, but also through a corresponding jump in pre-sales of the novel on Amazon.co.uk.
Use social media to provide utility
The real benefits of social media lie in engaging a community and building trust with your consumers. It’s therefore imperative that companies who use social media are able to provide value for their users and don’t use social media just for the sake of it.
Social media works best when it’s used to provide greater trust and transparency for your customer base. Disingenuous corporate social networkers will alienate their intended user base and cause deep mistrust, as the comments on the Last.fm page of the music festival, Trocabrahma, clearly demonstrate.
Passing yourself off as a happy consumer won’t exactly do any favours for the integrity of your brand, and beyond that, it’s also illegal (link to PDF).
Recently, the presence of corporate entities on Twitter has sparked debate about best practice on the microblogging site. Microblogging can be effective, so long as consumers feel there is a real person behind the “tweets", rather than an automatic bot.
For example, JetBlue’s manager of corporate communication, Morgan Johnston personally handles their Twitter account. He also monitors JetBlue’s online reputation in the Twitter community and uses the microblogging site to personally respond to individual users.
Use many different measures of success
A common dilemma is the issue of how to measure ROI. The key question for a majority of marketers lies in justifying spend and getting senior management approval.
It’s widely known that social media offers the benefits of considerably reduced costs, but without demonstrable results and standard methods of measuring ROI, many marketers can find their budgets restricted.
And, given the lack of coordination between online and offline sales, measuring conversion can be problematic as transactions are not always tied to online sales.
However, without completely disregarding the importance of ROI, it’s worth remembering that there may be different measures of success rather than just return on investment.
Assessing the effectiveness of PR campaigns in terms of absolute ROI is by no means solely restricted to online marketing, as benefits can be tied to metrics which are traditionally difficult to measure, such as increased customer loyalty, enhanced reputation and closer social engagement.
With that in mind, companies can measure things like the number of new consumers engaged, the effect of enhanced reputation on loyalty and word of mouth and quicker issue resolution for existing customers.
Get stuck in there!
The best advice for companies is to experiment with social media to find out what works and what doesn’t. Success or failure will vary widely depending on the industry concerned and the type of social media channel involved.
Additionally, best practices for relatively new technologies, such as Twitter, are still in evolution.
With regards to metrics, Ged Carroll of agency Waggener Edstrom recommends spending at least a third of your budget on measurement tools. For companies looking for quick wins from social media or for those with limited budgets, there are also plenty of free tools and resources available.
Searching on Summize for E-consultancy, for example, quickly reveals who's talking about us on Twitter.
As Will McInnes explained at last week's event, a key issue for marketers is establishing industry-wide standards for buzz monitoring. However, Chinwag's upcoming Measurement Camp aims to change the current landscape of social media, by creating "a set of open source resources which allow interested parties to better measure and so understand and improve their social media communications online and offline."
It's clear that when done right, social media presents a lucrative PR opportunity for brands to connect with their customers, allowing companies to reap significant rewards and tangible financial benefits.
Equally, as Google continues to rapidly take the place of our long-term memory, getting it wrong can have disastrous long-term consequences, that customers don't easily forget.
Look out for E-consultancy's new Online Reputation Monitoring Buyer's Guide, to be published in the summer.