Measurement, or its absence, is frequently held up as a reason to hold back on Social Media Marketing. CXOs will wave their hands in the air reluctant to embrace a dark art, an unmeasurable activity that will take up resources but, as many articles cite, is more about being there than actually delivering measurable results.

It’s not altogether surprising. Marketing has always been a discipline where for every measurable activity there’s an element of the unknown. Talk to a PR agency and they may guarantee a frequency of press releases but clearly can’t guarantee  publication. And the thorny old subject of lead conversions occupies the airwaves even in these days of marketing and sales force automation. What percentage of a sale value can be attributable to what proportion of a marketing campaign?

Bring in the broad reach of social media and while it’s very simple to get your brand ‘out there’ the impact is potentially difficult to determine. To date it’s been more about measuring presence; rather like the early days of website analytics where we delighted in graphing page views rather than registering whether the visit converted, we have attributed success to number of followers, likes, fans and simple statistics. It paralleled the early approach to educate via social media. Something that is really akin to the once sin of marketing for ‘awareness’ only. Now businesses want to take social to the next level and ‘engage’ more – the equivalent of moving from awareness to demand generation.

With this comes the requirement to measure engagement levels rather than simple numbers. And this will lead to the holy grail of defining the ROI of Social Media. There are four perspectives to consider and as a company that has seen its own ROI using these channels as it’s been the way we’ve built our business we’re going to share the details with you over a series of blogs. McKinsey found that the 40% of companies that are ‘networked‘ perform better than those that are not, so it’s going to be hard to avoid social media if you want your business to perform, so now it’s just about finding out how to measure.

These categories are financial, digital, brand and risk management.

1. Financial – the simple business of increasing the number and value of transactions as well as building and retaining the customer base.

2. Digital –  measuring how to drive more traffic to digital assets, increasing transactions, improving SEO and improving the effectiveness of current digital advertising and marketing spend.

3. Brand – awareness, purchase intent, preference and brand association and reputation.

4. Risk Management –  the cost of not doing Social and losing mindshare, business, and customer reaction.

Before we share our expertise in forthcoming blogs, perhaps you could start to look at your Social Media and see how it measures up against these yardsticks. Watch out for part 2 soon!