Measuring the Effectiveness of Social Media Marketing Across Multiple Channels

27 Jan
January 27, 2010

It’s amazing to me that with all of the Social Media expertise available to us, clients, business partners, and industry professionals alike are still having great difficulty measuring the true effectiveness of social media marketing efforts and investments on their business.

I spoke about this very topic at the Social Media Arizona conference on Monday. It generated a lot of great discussion so I wanted to reopen the topic here for further conversation. The following is a summary of my keynote and the comments are open below:

measuring social mediaI’ve been a direct marketer or a merchant in the direct marketing space for the greater part of a 30 year career. One of the greatest challenges I’ve faced is figuring out a way to measure the marketing investment within a particular channel when the results driven by that investment often occur in other channels.

Why or how is this relevant to the current digital marketing environment and Social Media?

Many of you reading this post have probably been asked to defend an investment in social media marketing and have had difficulty measuring the revenue, influence, or impact of that investment.

And how challenging is it to measure that return across multiple channels?

I’m a strong believer in fundamentals and basics. One of the fundamental principles of direct marketing is specific household or customer level performance tracking.  I believe that some of these techniques can be applied to the social space. Specifically: holdout groups, matchbacks, channel specific (exclusive) offers, landing page tracking, related product or service purchases through a different channel, and focus groups.

Holdout Panel

Basic Concept: Very simple. Create your target “list” of customers based on your own segmentation strategy. From your target list, take an nth and establish that group as a control (holdout) group. After the event, promotion, etc., compare the results or behavior of the group that received the offer to the group that did not and measure the “lift” associated with receipt of the offer against non–receipt. The holdout panel tactic assumes you have the ability to directly measure the results at the customer or household level. If you do not, you may need to perform a matchback (see below).

Application to Social Media Measurement: Show that Social Media investment works and drives a response. Create a holdout panel and isolate them from receiving the same offer that fans engaged online receive. Then measure the incremental lift in sales and profits of the group that receives the offer. This lift can then be applied to forecasting the performance of future investment in the space.

Matchback

Basic Concept: Matching a response to an offer (for this example, a catalog) with a unique customer or household. You might use 2 or 3 pieces of information to perform a matchback – a specific customer or household identifier (a name associated with credit card number, phone number, or other identifier), a specific offer that the customer received (identified by a source or promotion code), and a transaction that can be tied to both. If you take an order from a customer and the customer provides a source or promo code, a matchback confirmation is not necessary. If you have a number of orders or transactions that cannot be attributed to a specific source code or customer, often a matchback is the only way to tie the transaction to the offer.

This process involves examining each household that received a catalog and that household’s purchase behavior within a specified time after receiving the catalog. The hypothesis is that the catalog drove purchases in the online and retail channel and that this activity was not directly measurable.

Application to Social Media Measurement: Whenever and wherever possible, establish a database of your social media fan base, group, responders, blog commenters, etc. Combine matchback activity with your holdout results to measure the response to offers made in the Social Media channel and gauge the impact across multiple channels.

Landing Page Tracking

Basic Concept: Involves the creation of a unique URL and landing page experience that allows full tagging and customer tracking through your site metrics package. The goal here is to measure visits to the page and track customer page views, purchases, and any other activity relative to the shopping experience.

Application to Social Media Measurement: Like a catalog, Social Media can engage a customer with your brand or site.  And this engagement can take place weeks after the offer.  Whether through landing page tagging and clickpath mapping, or cookies, or both, you should anticipate this influence and take appropriate steps to measure this influence. A catalog may sit on a coffee table for weeks before it generates an order or even a visit. It becomes an “ubiquitous” brand presence – a continual reminder of your brand to the customer. Similarly, a Facebook fan may have your continual presence in their community and interact with or at least read your posts for weeks before being influenced to act.

Exclusive Product

Basic Concept: Just what the name implies – offering a product or service exclusive to the promotion, or overall offer. For our example, this could be a product offered through a catalog or direct mail piece that is available through a call center and possibly a website, but is not available through a third channel such as a retail outlet.

Application to Social Media Measurement: If possible, reinforce and validate your holdout and matchback learnings by offering exclusive products or services that are only visible to the Social Media customer (i.e. Facebook Fan). Measure and compare the performance of this product or service to those available through “primary” channels and driven through more traditional promotional methods.

Related Product or Service Offer

Basic Concept: Let’s assume you are a multi-sku retailer or marketer. If you are doing an item specific promotion, chances are that you will present an offer that has one or some of the overall product or service line represented, but not all. What happens when a customer responds to your offer through their preferred channel, but at the point of purchase switches themselves to another product in the same category or line?

We set up a series of analyses that list every merchandise category and subcategory represented in the catalog. We then matchback purchases made at retail by the households that received a catalog. If the purchase that was made consists of a line that is represented by the catalog, made by a household that received the catalog, and made within a reasonable time from receipt of the catalog, it is reasonable to claim influence.

Application to Social Media Measurement: Social Media will eventually influence your customers’ behavior across all channels. Even if you follow all of the other lessons, customers will still engage outside of a specific campaign or promotion even though they were influenced by it through Social channels. It may be a manual spreadsheet that you have to set up to measure it, but put measurements in place to help you understand how Social influences behavior across the now blurry channels. It will be worth the time and effort, and eventually the smart businesses will find a way to automate.

Focus Groups

Basic Concept: Asking a group of customers targeted questions in order to get feedback straight from them on their behavior. This is one of the primary ways to get feedback. Or is it?

Application to Social Media Measurement: Instead of looking for Social Media to drive top line, what if it could save tens or even hundreds of thousands of dollars on focus groups? What if you could manage your Social communities so effectively that you collected real time customer feedback without having to wait for an expensive focus group to be observed? What if these savings could be attributed to the ROI of Social Media?

This is the outline for social media measurement based on direct marketing concepts that I presented to the crowd at Social Media Arizona. What do you think?

*Photo credit: Biking Nikon PDX (Flickr)

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2 replies
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