A Snarketing post by Ron Shevlin, Director of Research at Cornerstone Advisors
According to an HBR blog post titled Why Your Social Media Metrics Are A Waste Of Time:
“Many companies use the wrong metrics to measure their performance, especially when it comes to social media. If you think pageviews, unique visitors, registered members, conversion rates, email-newsletter open rates, number of Twitter followers, or Facebook likes are important by themselves, you probably have no idea what you’re doing.”
Fair enough. No argument from me. But the article goes on to say:
“Here are four of the most important metrics you can follow — notice how little they have to do with popular social-media metrics: 1) Relevant revenue; 2) Sales volume; 3) Customer retention; and 4) Relevant growth. These metrics are valuable because they measure success at your core business. To measure the value of your social-media activities, you have to look at the results the company is getting overall and track how social media was involved in moving the needle. That’s where you’ll find the only relevant social-media metrics.”
And therein lies the problem with the article (and most blog posts on social media metrics, for that matter). Namely: Preaching without prescription.
Re-read the sentence that says “To measure the value of your social-media activities, you have to look at the results the company is getting overall and track how social media was involved in moving the needle.”
Technically, correct. Practically, useless.
Of the many challenges facing marketers, attribution of results to investments is one of the stickiest. Many marketers design tests to see which offer tests better, or which web page design delivers the highest conversion rate. But tying overall revenue, retention, and growth to social media metrics — in the absence of control groups or other structured testing techniques — is, for the most part, impossible.
Not that that won’t stop marketers from using correlative measures. But it doesn’t prove causation.
Unless you only touch a customer through social media, you can’t claim that social media was the cause of any change in the relationship.
So go ahead, HBR, and publish blog posts about how social media metrics are a waste of time. In the absence of solid prescription and advice on how to tie social media efforts to bottom-line results, those blog posts are a waste of time.
The problem is not that metrics like pageviews, unique visitors, or number of followers are the “wrong metrics” to use. Instead, there are two problems here.
The Metrics Chain
The first is that few (if any) marketers have done the hard work to understand if and how metrics like pageviews, visitors, or followers impact the bottom-line metrics the author of the article wants us to measure.
I know that many of you think the marketing funnel is dead. You’re wrong, and this is not the place or time to tell you why you’re wrong.
We need to think of marketing metrics as following a funnel, from upstream metrics like pageviews and follows to downstream metrics like sales, revenue, and retention.
What about midstream metrics? This is where the concept of customer engagement comes in. What are the things that good customers do — that demonstrate engagement — after they’ve viewed a page, liked your FB page, or visited your site that lead to increased sales and/or retention?
The problem isn’t that upstream metrics are the “wrong” metrics to measure — it’s that they’re an insufficient set of metrics to use to measure performance.
The Cost of Metrics
But that’s just the first of the two issues causing the problem. The second is that it costs money to develop and track a metric.
Some metrics — like pageviews, followers, likes, etc. — are easy and cheap to measure. But developing those midstream metrics, and determining the linkage between upstream, midstream, and downstream metrics are harder to define and measure. And it takes an investment on the part of Marketing to develop and track them.
What’s the ROI on that investment?
There is none. Spending money to develop and track and metric in and of itself will have no impact on the bottom line. You might be able to use that metric to make better decisions that ultimately lead to improved sales or reduced costs, but simply defining and calculating a metric doesn’t produce that result.
So what happens is that Marketing doesn’t invest in a measurement infrastructure. It defaults to tracking the easy-and-cheap-to-measure metrics. The ones the author of the HBR article thinks are the “wrong” metrics.
To Track or Not To Track: That Is The Question
The most important question to address isn’t “what social media metrics should we be tracking?” but “should we even spend time and money developing social media metrics to track?”
Here’s why: Assume that a company’s marketing budget is $100 million, and that 50% of it is spent on TV advertising, 20% on print advertising, 20% on direct mail, 5% on online advertising, 4% on events, and 1% on social media.
Of the six approaches that marketing invests in, which of the six would you want to have the most accurate marketing ROI metrics?
My top three would be TV, print, and direct mail. Cuz that’s where 90% of the marketing dollars go.
If the CMO of my fictional company doesn’t have the “right” social media metrics in place, so what? Does it really matter that much?
Now, I can already hear the SM gurus claiming that social media has a disproportionate impact on customer relationships.
Maybe that’s true.
But that just means the CMO of my fictional company needs to know if s/he should be reallocating the investments between the six categories in some other way than it’s being allocated today.
It doesn’t mean investing more in a social media measurement infrastructure. It means investing more to develop a marketing measurement infrastructure. And that puts many Marketing departments in a chicken-and-egg situation: Can’t prove the ROI of their investments, but can’t afford to invest in a measurement infrastructure that would improve the measurement of marketing ROI.
Bottom line: Blog posts about social media metrics like the one in HBR tick me off. They miss the important points and issues regarding marketing measurement.