Social Media Marketing: Measuring Impact and ROI

By Meghan VH
April 13, 2009
Social media marketing is positioned as a true game-changer, yet questions swirl around who is being reached, what the actual impact is and how ROI can be measured.
Sites such as Facebook, MySpace and, especially, Twitter allow marketers to access “real-time” trends and feedback. There are numerous advantages to using social media for market research and real-time adjustments to marketing campaigns. For example, some companies are using social media sites as quasi focus groups to see what is being said about their brand on a real-time basis. Recently, Tropicana reverted back to the original packaging on their orange juice containers after a negative backlash toward the new packaging on Twitter. And in late 2008, consumers who used Twitter to complain about a controversial ad for Motrin received responses within 48 hours from the brand’s maker, a unit of Johnson & Johnson, which apologized for the ad and told them it had been withdrawn.
Also, companies that participate in social media (i.e., posting “tweets,” having a Facebook fan page or starting a YouTube channel), may appeal to a younger, more technology-minded demographic. The hypothesis is that an association with social media will enhance perceptions of a brand being “cool.”
Of course, there are also drawbacks to using social media in marketing and for market research. This is not a controlled environment for research; companies do not necessarily know who people are or their motivations. Moreover, a brand manager cannot control what is being said about the brand – and whether the conversation is positive or negative.
Skittles provides a prime example of this particular drawback. Recently, Skittles changed its home page to a Twitter search results page for the term “skittles” and then later to the Skittles Facebook fan page, its Wikipedia page and currently, the brand’s YouTube channel. Although Skittles received a lot of buzz for this stunt, reading the “tweets” showed that not everything was positive, or even relevant. An example of posts from Twitter related to Skittles include …
Twitter rumor of the day: skittles are made of people
Skittles…just jumping on the bandwagon, it’s filling up fast!
Wow, skittles is using twitter as their homepage. Hi mom!
What’s up with all these tweets about #skittles? I really feel like eating some now. Can’t find any in my candy dish!
A tweet involving the term “skittles” that was racially offensive also popped up repeatedly, which forced Skittles to change their home page from Twitter to the brand’s fan page on Facebook. This showcases the lack of control over unwanted comments that may be inappropriate, damaging or spam.
Thus, social media can be used by companies to create buzz and word-of-mouth about their brand in the market – both good and bad. But is increasing buzz and word-of-mouth enough? How does social media marketing efforts tie into sales figures and how can we measure the return on investment in social media marketing?
At first glance, it appears that there may be more social than commercial applications for social media sites like Twitter. Companies are scurrying to implement strategies on how social networking can be used to increase sales and drive traffic to their websites, and those that have implemented strategies are further scurrying to measure impact in meaningful ways.
Currently, there is no silver bullet for measuring social media ROI. Companies may track the number of visitors, time spent on a site or blog, the number of comments, the quantity of followers or replies on Twitter, friends on Facebook or responses to special offers and coupons. But wouldn’t it be interesting if the brand manager from Skittles could tie the Skittles social media stunt to bottom line sales figures for the brand? Wouldn’t that kind of data really move the market and facilitate decision-making around investments in social media marketing? If increasing buzz around the Skittles brand produced a tangible result in sales, perhaps this example would ease market worries about using social media. According to Tessa Horehled, a strategy marketing professional who owns Drive a Faster Car LLC, whatever tool is used, companies need to accurately monitor, measure and determine the efficacy of each individual method. Different social media types may also need to be separated in the measurement process.
If a credible and consistent ROI method for social media is created, it would also be useful to see the ROI for social media by product type. A product like Skittles is something that might be an impulse buy – you see it at the checkout counter and you want it right at that moment. However, with bigger ticket purchases, such as electronics or appliances, who doesn’t go online first to read information, reviews and comments about the product? One could argue that bigger ticket items and smaller ticket items may be effected differently by social media.
Measurable marketing activities are critical to maintaining marketing budgets, especially in the current economy. A mix of quantitative and qualitative research designed to closely examine the key drivers of decision-making, creates the perfect blend of “hard” and “soft” data that companies need. The Hybrid Research method we offer to our clients at Sentient aims to fill this niche.
One Hybrid Research method that quantifies the gut feeling can be effectively used to test the impact of social media: Automatic Brand Associations methodology. Using this method brand managers can assess whether social media buzz has touched the consumer unconscious to increase associations with their brand such as “cool”, “innovative” and other positive terms. And in the case of Skittles, this method would assess the degree of negative associations (if any) that may have seeped into the collective consumer unconscious mind, making consumer more or less likely to buy in the future.
As more and more marketers experiment with social media and become more comfortable with it, better tools are being developed to examine the measurable impact of social media on the brand. Our recommendation at Sentient is simply to implement testing methods to measure the impact of your social media marketing initiatives, both in terms of changes in consumer sentiment by quantifying the consumer gut feeling and in terms of bottom ROI analyses to justify your budgets. It is critical that companies measure understand the impact of social media on their brand – it is where customers are – it’s what they are using in their everyday lives.
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