By adaptive - May 14th, 2012
[I]s it really possible to take social media interaction beyond a numbers game and put a real value on social-media interaction such as a Tweet, like, or share? For many businesses, the answer is i...
Is it really possible to take social media interaction beyond a numbers game and put a real value on social-media interaction such as a Tweet, like, or share? For many businesses, the answer is increasingly a resounding “yes”.
If data is the “new oil”, as so many pundits claim, then social media is one of the oilfields. However, unlike real petroleum, there’s no international market in Facebook ‘Likes’ or Twitter Retweets: value is almost entirely determined by the objectives behind the social media programme, which are naturally business-specific.
Social media expert Cara Pring thinks it’s dangerous to put a purely monetary value on social media communities: “Each company has a differing strategy for getting likes and interacting with their communities, so value will be different for each brand.”
She goes on to emphasise that it is important to look first at the objectives of social media marketing: “For example, a brand might want to make sales through Facebook offers, recover customers and generate leads through Twitter, and provide better customer service/experience overall. What you can do is put some performance indicators on these objectives, based on past activity and projections/budget spend, and work out a value from there.”
That’s not to say it’s impossible to monetize social media. Eventbrite, the event ticketing company, tracks social media activity and has been able to put a value on different social ‘shares’. So, for example, for its recently established UK business, a Facebook ‘Like’ generates an average additional £2.25 in gross ticket sales; a Tweet is worth an additional £1.80; and a LinkedIn share delivers an average £1.24 in additional sales.
Tamara Mendelsohn, Eventbrite’s Vice President of Marketing, was quoted on the Econsultancy website as saying that initially the company optimised its site with Google in mind, but changed its entire approach when it realised how events are suited to the word-of-mouth marketing enabled by Facebook: “Social lets you reach a much more targeted group of people, so without knowing it at the start we stumbled across a business that could really use social media to grow.”
So is it just a question of dividing ticket sales by the number of shares, Tweets and likes? Absolutely not: Eventbrite takes a very scientific approach to working out these values, as Tamara Mendelsohn explained: “We use a custom suite of social analytics tools that we have developed entirely in-house. Our reporting lets us track and analyze not only which sharing options our users leverage, but where on our site each share action takes place. These tools also tie back into our conversion funnels, so we are able to attribute ticket purchases to the specific social distribution channel that drove them. So, for example, we can compare not just the value created by a Facebook ‘Like’ vs. a Tweet, but also the performance of shares initiated before or after a purchase.”
Clearly for a business like Eventbrite, which generates most of its revenue through online sales, this deep analysis is vitally important to maximising the benefits of social marketing. But what about businesses that don’t sell off the page, as it were?
The fashion retailer Burberry invests 60% of its marketing budget on social media, and Facebook was central to the launch of its Body fragrance in 2011. According to L2, the digital thinktank, Burberry shows that intelligent investment in digital translates into shareholder value, and has the brand at the top of its digital fashion index.
A couple of years ago, social media consultancy Syncapse studied 20 different brands and suggested that: “the average annualized value of an individual fan is $136.38”. The value was based on the different spending patterns of fans and non-fans among the respondents: this indicated that on average “Facebook fans spent $71.84 per year more than respondents who were not fans.” However, the same research emphasised that “The fan base of a brand is unique and comprised different levels of influencers and customers. The average fan value is $136.38, but it can swing to $270.77 in the best case or go down to $0 in the worst.”
Of course value is more than just money, and the Syncapse research also emphasised the importance of brand loyalty, with companies using social media to foster and develop relationships with customers. The benefits were vividly demonstrated in the research, showing that Facebook fans are more likely to continue using a brand than are non-fans: for sports brand Adidas, 42.5% of fans said they would continue to use the product, compared with non-fans.
The point seems obvious: fans that deliberately engage with a brand are likely to be more loyal than non-fans. But that doesn’t mean they will necessarily stay loyal: successful brands are those that, like Eventbrite, Burberry, Adidas and so on, continue to interact with fans and build on the loyalty and engagement.
A further benefit – which is almost immeasurable – is the fan as brand advocate. Facebook fans are typically active social media users, and can provide a conduit to their own networks of friends. Encouraging fans to share content and information about a brand is a sure way to build further loyalty and increase the customer base.
She goes on to emphasise that whereas some performance measures can have a direct dollar value – sales from a Facebook promotion, for example – others do not, although they are still vitally important in measuring the value of social media marketing.
The growing sophistication of relevant analytics helps in measuring the effectiveness of social media. Some businesses – such as Eventbrite – will use custom tools; others can rely on an increasing array of products being offered by online specialists. Either way, prospecting for the “new oil” is becoming more scientific by the day.
Read our exclusive interview with Vanessa Hope Schneider, Senior Public Relations Manager, Eventbrite about how social media has become an integral component of Eventbrite’s success.
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