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two dimensional formulas in order to calculate Social
An Introduction to Spectrum Media ROI, even though it is tempting to do so, before
Analytics for Social Media ROI we are able to capture the information to put into those
formulas. While we can reduce a business’s financials to a
Social Media is a fairly new communications medium and
series of formulas that calculate profitability or loss, which
activity that is often considered to be “free” and available
is fairly well instrumented by accounting software and
to everyone. With abundant free and low cost tools and
CPA’s and best practices have been for hundreds of years
platforms to create, promote, monitor and analyze social
(for the sake of investment and profitability), it’s much more
media content businesses and individuals, excited about
difficult to do the same thing for Social Media ROI (which
what Social Media can do for them, too often assume that
is only a few years old).
measurement of Social Media can be taken care of as
more of an afterthought.
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customer base, and increasing exposure of the brand.
Acting as an analyst here my insights are usually
connected with data I touch. I reasoned data to prove
Social Media outreach is effective in driving new business
and revenue was available, but we were not able to
capture it. I termed such data as “ultraviolet”, because we
can’t see ultraviolet light, yet it’s present all around us.
I thought about what it takes to capture the information Figure 1 – Compete PRO Referral Analytics Traffic
and tabulate it. When I started this line of thought my goal Dashboard, July 2010 for Industry Category: Entertainment
was not necessarily to solve Havana Central’s problem Guide: Restaurants and Dining8
as much as to prove community management was an
effective income generator for any restaurant chain. I Havana Central’s Referral traffic as detailed by Compete.
decided to create an approach anyone could use to find com shows no traffic at all from Social Networks (low
how much data they were missing and what they could do sample site) and so a marketing goal ought to include
to enable data capture in preparation for Social Media ROI meeting or surpassing the average referral traffic from
based on the need to analyze the full spectrum of data and Social Networks for the relevant category – in this case,
initial discussion of the concept can be found on my blog7. several hundred more visits per month from Facebook
alone would be called for (note: Google Analytics shows
While coming up with this approach we realized Havana some Facebook and Twitter traffic to havanacentral.com).
Central really needed a connection from the business and
how it operates to the customer, and back to the business Similar diagnostics can be obtained from Google Analytics
for tracking via analytics using tactics such as couponing, Benchmarking (when sharing data with Google) based on
secret passwords and perks for VIPs, etc. business type. The charts below show that on average,
Havana Central gets 3.75 times more visits than the
Read on to find out more about the methodology. average restaurant using Google Analytics but the average
restaurant is generating more pageviews per visit (it may
have more to do, in this case, with PDF menus that are
Setting Measurement Goals downloaded but not counted as pageviews or otherwise
tracked by Google Analytics unless virtual pageviews are
Every business falls into some type of category. In order
created for each menu).
to know what is realistic to strive for in relation to Social
Media, it helps to know what the average traffic is and
sites for the category you business is in.
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for VentureBeat /SocialBeat last year10 suggested Video
publishers had the IAB’s VAST standard to thank for rapid
monetization of video ads that started taking place; I quote
from my article here:
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in the UK to achieve those standards through the CIPR person do Community Outreach, Management and track
(Certified Institute of Public Relations) Social Media catering orders in a spreadsheet that could work for a very
Monitoring study group and panel , of which I’m an
12
small operation that can live with a manual process but
honorary member. I hope readers will follow CIPR-CP quickly becomes un-scalable.
leader Philip Sheldrake quest to come up with standards
13
A common challenge for Social Media Measurement and Another example from my experience working with Havana
the biggest roadblock finding the data nuggets under the Central was creating and fine tuning Radian6 Alerts in
radar and over the rainbow are business processes that order to know when customers were in a location and
are unaligned with a business’s goals for measurement. offering them a drink14 (or a coupon, which was never set
up). I saw the potential here but got frustrated with the
One example, obtaining Requests for a Quote (for a results.
potential catering) which corresponds to a page on the
Havana Central site (monitored by Google Analytics on You can’t blame it on software, automation (Radian6,
one side and back end email request on the other) typically FourSquare and Facebook Places to name a few) took
require communications between a marketing assistant care of knowing people are in a venue by sending us email
and community manager (communications didn’t happen alerts (a measurement goal for Social Media attribution);
often enough or were too difficult to maintain). but the business goal of Brand Awareness and Customer
Loyalty (which are much harder to align and scorecard)
Catering jobs generate several thousand dollars of income, was not aligned with the measurement strategy I came up
per job, to the bottom line, but the business process with (getting management to be on the same page with
wasn’t yet aligned to the measurement goal (attribution of business and measurement strategies is the subject of
a referral to outreach). One solution is to have the same several books onto itself and I’m not going over it here).
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rest of the organization). At least, that’s how it looked to
Testing this approach in the real world of a NYC restaurant me.
chain we found no systems in place yet to incentive very
busy struggling restaurant managers, waiters and waitress Each part of an organization has its own goals and
(who need to be trained and often change jobs) to gather methodologies to serve its own purposes and to get work
the information (a customer is in a location, greet them and done; weather those purposes support or interfere with
offer a coupon) and record it in such a way that it can be accurate measurement is up for you, the reader, to decide.
attributed to Social Media and then tabulate into an ROI
metric. Specific middleware to record the transactions was In fact, just about every business unit, every company,
also missing. every corporation, every city, state and every country
have the same exact communication issues around goals
This lack of alignment is the biggest problem we have as and strategies, and as we have seen throughout our
the tools are in place to measure most of what we need civilization’s history, this is not an easy problem to solve.
already and plenty of people have come up with measures Maybe the best way to look at our differences as stepping
for Social Media ROI, but there’s almost succeeding in stone to better way of communication that serve us all
defining and aligning the social media dimension of your (once there is enough consensus and people in place at
business goals to your overall measurement goals leading the top that can focus business and measurement goals,
to the common result of Social Media ROI that cannot strategies and policies).
be accurately defined or measured (but is sometimes
estimated); several people are working on this problem
right now but no one I know of has solved it.
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Figure 3 – Radian6 charts showing Social Media Buzz
Measurement of Havana Central Times Square location Why Social CRM is needed
vs. neighboring restaurants Blue Fin, Heartland Brewery,
Carmine’s Times Square, and Bond 45. The chart on the Over the last year Social CRM has quickly evolved as
right shows the number of twitter followers of those who means to connect Social Media Chatter to existing records
tweeted about each restaurant in the last 3 months and in Salesforce and other CRMs. This space is quickly
where they are located by region. Note: this chart shows becoming one of the hot topics in Social Media Monitoring
aspects of Brand Awareness for the 5 restaurants surveyed and will be subject of a future paper by the author.
here.
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under the surface, just waiting to be tapped. example, each tweet about eating at the restaurant can
be estimated to be worth over $100 based on the average
order size, the average party size and the average price of
Getting Started by Performing a a meal).
Social Enablement Audit
Estimating Social Media ROI is useful when you make a
The only way to know how much precious data your decision to expand or retract a marketing initiative but is
business has in the unseen spectrum is to audit your not a replacement for actual ROI measures that are tied to
data. Specifically, list all the sources of data your business a transaction.
has and what campaigns and marketing initiatives your In another case, traffic and possible marketing efforts
business is running. This table shows data from Havana directed at the VIP page of the Havana Central restaurant
Central. site15 can be expected to appear in Google Analytics and
Google Adwords (when ads are run) but not anywhere else.
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common key does not exist).
Brick and mortar SMBs who could not possibly conceive, In the process of doing a Social Enablement Audit you
afford or execute such a data cube even though they may might find that you are not collecting all the data you
actually require one, but once your data is in the Cube you needed; in this case you may not have some data that you
can perform analysis that could uncover ROI and customer need in any form and in any data source. The best way
behavior that is not ordinarily visible. to find out if you missing collecting data is to compare
your data sources to each other. As you examine your
data you may find there are some things you want to
know that no application is tracking at all and this will
drive new solutions for your business. What we’re trying
to find out here is how compatible is the data being used
to run your business to each other and how easy is it
to integrate information. Typically, applications are not
created to integrate and the data within each source and
Figure 7 – slices of a data cube are frequently incompatible with each other.
Given the lack of the needed common key (in this case, One attempt to answer the compatibility problem was
a common record locator for every record in Google Adobe (formally Omniture) Open Business Analytics
Analytics, Opentable, SeemlessWeb, Email Marketing, etc) Platform20 using Web Analytics as central point to unify
in many data sources – information needed to populate the disparate applications such as Radian6 (one of our data
data cube is going to be spotty, noisy and in other cases sources), several different Content Management Systems,
hard to translate it to the right structure to be effective. Salesforce Customer Relationship Management (CRM) and
According to Gary Angel, the CTO of Semphonic, when even Opentable, using Omniture for their own marketing
you integrate data into a data warehouse, you open up analysis, (using Test and Target) within Site Catalyst, but
new questions, targeting opportunities, and analysis all of these require a lot of money and time that do not
methods that otherwise doesn’t exist19. make sense to implement for most small business (not
until someone comes up with a suite of tools for low end of
the market that makes data integrations much easier and
inexpensive).
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Supposing you could integrate all the data you need into could use the data to analyze their sites, but most
a cube, would the resulting reports lead to insights not businesses didn’t know how to define their business goals
ordinarily obtainable? I think so, but it will depend on how and translate them into measurement goals and align their
well business processes are translated in to the matching organizations so that real analysis could happen with the
reports via a clearly defined measurement strategy, result good analysis was done, but rarely.
mentioned earlier, and gifted analysts needed to make
sure they do. Hopefully, business will also learn how to Around 2005 things got to be more interesting with a
listen to what the analysts have to say when they are able convergence of sorts including Flash and Ajax tracking
to come up with marketing insights and give them a seat evolving, but again, most organizations aren’t yet able,
at the table which they traditionally haven’t had in most willing or think it’s too expensive to translate what they do
organizations. and what they want to track into what these tools can do
and what they can track, and as a result much data and
I believe it’s time to consider doing similar enablement insight is lost.
for Social Media that we more typically perform for Web
Analytics (with extensive page tagging often required to As social media began as grassroots, peer to peer
pick up specific customer behavior, often a measurement expression of communications between friends and fans,
goal). etc, this kind of integration had not lent itself to being
instrumented in the same way Site Analytics evolved but
it’s only a matter of time until it does get instrumented,
much as Web Analytics has. As corporations are going
more social, so are SMB’s. Parallels between Social Media
Measurement and Web Analytics suggest convergence
and the possibility of actual ROI measurement once
business goals are merged with right measurement goals.
At the turn of the century analytics improved and business It’s my belief we do not achieve actual Social Media ROI
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unless we can segment social media activity and associate
it across data sources and marketing channels back to
pancakes!)
actual revenue. In fact, most business and consultancies
In order to know what can and can’t be combined to
have no idea how to start, which is why it doesn’t happen
form Social Media ROI we need to look at the data we’re
often, if it does at all.
collecting in greater detail – assessing what we actually
have to work with.
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that connects a website, Google Analytics and Opentable 2) Most businesses, esp. SMB’s are not yet ready to fully
and Google Analytics can act as a go between. implement the data audit methodology. Someone needs
to come along and make the process easier for them, and
more streamlined, before this is going to happen on an
SMB level. I suspect a streamlined implementation of data
audits will differ somewhat based on business verticals.
However, within each vertical there will be enough
similarities to standardize and streamline (i.e.; most
restaurants use Opentable and SeemlessWeb and should
be part of the solution for this vertical, but perhaps not
for other types of retail establishments like Supermarkets,
clothing outlets, Travel Sites, Hotels, etc, which will need
different sets of data feeds and metrics).
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4. http://www.linkedin.com/in/ceciliapinedaferet Cecilia
Pineda Feret’s LinkedIn page.
6. http://www.stratigent.com/news-and-events/pimp_
your_reports/default.html Stratigent’s Pimp Your Reports
program which I recently attended
7. http://www.webmetricsguru.com/archives/2010/08/
on-360-degree-analytics/ - put forward that most of the
interesting data that proves Social Media is working is
invisible to the naked eye – or “ultraviolet”. However, with
the right devices and mythology the data can be seen and
quantified
8. http://www.compete.com/referrals/referrals/
category/3037/?threshold=1
What you’ll find at the end of the Data Rainbow …… Yum!
(Amanda - http://iammommy.typepad.com/my_ 9. http://www.webanalyticsassociation.org/resource/
weblog/2009/10/rainbow-pancake-sugar-cookies-winnie- resmgr/PDF_standards/WebAnalyticsDefinitions.pdf
the-pooh.html)
10. http://social.venturebeat.com/2009/11/29/brightroll-
says-video-ad-profits-are-soaring/
Links
11. http://www.webanalyticsassociation.org/?c_
1. http://thebrandbuilder.wordpress.com/2009/05/29/how- reorganization
to-not-calculate-social-media-r-o-i/ Oliver Blanchard has
written several posts and a popular SlideShare presenting 12. http://www.cipr.co.uk/content/cipr-social-media-
his views on what is and is not Social Media ROI. measurement-group-launches
2. Altimeter Report: Social Marketing Analytics (Altimeter 13. Phillip Sheldrake on Twitter @sheldrake
Group & Web Analytics Demystified) see http://www.web-
strategist.com/blog/2010/04/22/altimeter-report-social- 14. http://www.webmetricsguru.com/category/social-
marketing-analytics-with-web-analytics-demystified/ media-case-study-havana-central/ The author was often
frustrated why we could not go further here.
3. http://www.webmetricsguru.com/category/social-
marketing-analytics/ - there are actually 8 posts I wrote on 15. http://havanacentral.com/vip.php
the subject, not all show up with this URL.
16. http://management.about.com/od/businessstrategy/a/
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DataInteg02.htm
17. http://techcrunch.com/2010/06/03/location-2012/
Robert Scoble argues massive amounts of Geo-Location
data is being collected in Silos when it would be better for
consumers the data was shared across all vendors.
18. http://analyticsinsightblog.stratigent.com/2010/09/
centralize-your-data-using-adobe.html The article
suggests Web Analytics platform Site Catalyst is one place
where it’s possible to pull together data from disparate
sources into actionable dashboards and reports.
19. http://semphonic.blogs.com/semangel/2010/06/
further-thoughts-on-data-warehousing.html - Gary Angel
suggest 3 dimensional arrays open up new questions,
targeting opportunities, and analysis methods that
otherwise don’t exist.
20. http://www.omniture.com/en/products/open_
business_analytics_platform Adobe Omniture Open
Business Analytics Platform.
21. http://www.slideshare.net/webanalisten/webanalytics-
congress-the-netherlands-amsterdam-june-2nd-2010-
judah-phillips
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