The Marketers Guide To Measuring Social Engagement

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1 The Marketers Guide To Measuring Social Engagement

2 ORIGAMI LOGIC EXECUTIVE SUMMARY Social media is increasing in importance as a marketing channel, with investment expected to rise to over 18% of total marketing budget. Meanwhile, the complexity of social data has created challenges around how to measure marketing success. As marketing becomes allows creation of accurate, actionable, and business-relevant insights that enables businesses to tap into the full value of social media. Key Takeaways 1. As marketing becomes increasingly data driven, social media marketers should invest in forming a standardized measurement framework. 2. A foundation of a social media measurement strategy should start with identifying metrics that matter and categorizing the data on business-relevant categories Due to the complexity of social media data, applying a solid measurement strategy at scale requires the use of platforms that enable customized and automated reporting.

3 WHY MEASURE SOCIAL ENGAGEMENT Social media is increasing in importance as a marketing channel. Firms expect a 145% budget. 1 More marketers than ever before are recognizing the value of social media, with 97% of marketers stating that they are currently participating in social media marketing and 92% believing social media to be important to their business. 2 Meanwhile, the rapid expansion of social media use in marketing has created challenges around how to quantify its value and measure success. Marketers feel that they do not have a clear idea on how to measure results of social media marketing efforts: less than 16% of 3 A survey on the top questions that social media marketers want answered revealed that: 89% of marketers want to understand the best way to engage users on social media 88% of marketers are unsure about how to measure return on social media investment 4 As all questions above are dependent on being able to correctly quantify social media impact, measurement appears to be high on the list of concerns, not only for social media marketers but also for marketing organizations as a whole. As social media investment grows as a total percentage of marketing spend, social marketing measurement will become increasingly important to a marketing organization. 91% of marketers are which social tactics are most effective. 3

4 ORIGAMI LOGIC 4 A solid measurement framework is needed in order to successfully address the issues seen in social media marketing today. Common practice in marketing for areas that require high domain expertise on limited investment is to outsource management to external agencies. However, due to branding and to outsource social media efforts. 5 As a result, reliance on external agencies expertise for management of social media is limited, which increases the need for advertisers to establish robust internal practices. It is clear that a solid measurement framework is needed in order to successfully address the issues seen in social media marketing today. Being able to form such a practice will marketing strategy. Social media presents unique challenges for measurement due to the complexity of data managers need to work with dozens, or sometimes hundreds or thousands of properties. Opportunities to conduct controlled tests are limited due to rapidly cycling content. It s no Challenges faced by today s social media marketers include the following: A proliferation of social networks and their use in marketing: brands now report using an average of 7 social networks, with 15% of brands being present on 10 or more 6 Management of multiple social media properties across networks: companies average 178 corporate-owned social media properties 7 Lack of consistency in metrics between social networks Varying audience characteristics and social norms across different networks, brands, and markets from social media data sources and reports Furthermore, the impact of social media cannot be calculated purely as a function of trackable ecommerce revenue. Studies suggest that the impact of social media extends beyond the scope of direct conversions. 8,9 While there are several ways in which social

5 The Marketer s Guide to Measuring Social Engagement ORIGAMI LOGIC media effort can be tied to revenue impact, 10 such methods tend to be complex and are mostly generic, which makes them of limited tactical value. reasons why engagement remains the primary metric that social media marketers use for measuring success. 11 KPIs (key performance indicators): 1. They are available directly from the social network, requiring no custom implementation or modeling efforts 2. They are applicable to all accounts within a social network, making them transferable across accounts, lines of business, and changes in business objective 3. Engagement data typically becomes available within a day of posting, which allows an early read on campaign performance 4. Different types of engagement provide varying value in areas of marketing strategy, which makes them useful for mapping to high-level strategic goals For the reasons above, there is a strong case to use engagement metrics as KPIs in social media. Integral to achieving success in social, then, is to extract metrics that matter from and reported. Engagement remains the primary metric that social media marketers use for measuring success. DEFINING SOCIAL ENGAGEMENT OBJECTIVES marketing objectives for social engagement. This is important in order to identify metrics results in numbers that mean little in context of the larger business. 5 For example, let us compare the following two results: We received 5000 likes, 500 comments, and 10 shares last week on our global social properties, with 1000 likes, 5 shares, and 100 comments with 80% positivity (a 10% week-on-week increase) within the US. One of the objectives of our social media program in the US is to foster customer interactions via social conversation, thereby increasing retention. Last week we received 100 comments on our US properties with 80% positivity, a 10% increase in positive customer interactions over the previous week.

6 ORIGAMI LOGIC The Marketer s Guide to Measuring Social Engagement The reason why the second example is much more powerful, despite containing less results, (customer retention) and focuses only on those metrics that support the objective. We recommend following the three steps below when establishing a measurement strategy: 1. Identify high-level marketing goals for the brand, market, and campaign 2. Establish a set of social media objectives that contribute to the above goals 3. these objectives acquisition, retention, and development (increasing customer lifetime value). Marketing long as social media objectives exist that can contribute towards these larger goals. Since marketing goals can vary for each brand, within each market, and even per product, social media objectives also need Below are some examples of social media objectives, along with their higher-level contribution. SOCIAL OBJECTIVE Promote social brand advocacy STRATEGIC CONTRIBUTION Acquisition Retention Development Increase social share of voice vs. competition Spread awareness of new products and promotions Amplify efforts in other marketing channels Nurture customer relationships via conversation 6 Establish a social brand identity Figure 1: Mapping Social Media Objectives to Strategic Goals An important point when establishing objectives for your social media efforts is to understand that high-level strategic goals are rarely uniform across the entire business. Their relative importance varies depending on brand equity, product maturity, market For example, customer retention is of primary concern for an established brand in a saturated market, whereas customer acquisition may be the focus in a growth market. development becomes critical. Since marketing goals can vary for each brand, within each market, and even per product, and reporting: these need to be customized to reflect differences in objectives and strategic goals across segments.

7 The Marketer s Guide to Measuring Social Engagement ORIGAMI LOGIC measurement. The following are critical components in a good measurement strategy: 1. Metrics that indicate progress against objectives 2. Metrics that represent directional performance and help identify what works or does not work 3. Categorization of results that produce insights for and show impact towards the larger business 4. In the following sections, we will detail how to design your social measurement strategy around these components to insure accuracy, actionability, and relevance to business results. METRICS THAT MATTER The abundance of metrics in social media is a unique phenomenon within digital marketing. While metrics of interest in most marketing channels are relatively few and well-established, social media metrics are diverse due to the fragmented and proprietary nature of the networks themselves. Social marketers therefore need to establish their own standardized metrics to use as indicators of engagement. Since there are so many metrics in social media, it is helpful to initially classify them into groups that represent similar actions. Digital marketing industry thought leader Avinash Kaushik characterizes the four best social media 12 Of these four, the Conversation: Direct or indirect replies to social content Applause: Actions indicating agreement, interest in, or empathy with the content being posted most social networks. In addition to these, there are other actions such as clicks and video views which we will classify as Consumptions. Social marketers need to establish their own standardized approach and reporting on social engagement metrics. 7

8 ORIGAMI LOGIC The Marketer s Guide to Measuring Social Engagement APPLAUSE CONVERSATION AMPLIFICATION CONSUMPTION V Likes Comments Shares Clicks 5 Favorites Replies Retweets Clicks R Likes Comments Share Clicks Views # Likes Comments Clicks 6 Likes Comments Shares Clicks Likes Comments Repins Clicks Favorites Replies Retweets Loop Counts - Likes Reblogs Clicks Z +1 s Comments Reshares Clicks When considering these types of interactions, one should be aware of the contribution of each type of interaction towards overall marketing strategy. Below, we list their respective Conversation promotes audience interaction, creating goodwill or preventing badwill. Positive conversations also contribute to customer retention and development. Applause creates goodwill with a low barrier to entry, contributing to customer retention. is crucial for customer acquisition since these are the only actions that increase the reach of messages beyond the scope of existing followers or fans. It can directly or indirectly contribute to customer retention and development. 8 Consumption varies in impact depending on content. Direct calls-to-action generally impact customer development, product-related messages impact customer development and acquisition, and informational and general interest messages impact retention. Thus, the type of metric to focus on depends on overall social media strategy and score, which we will discuss later. All the metrics noted so far have been volume metrics: counts of engagement activity. Once the appropriate volume metrics have been selected, two other types of metrics can and should be calculated: engagement rate and cost per engagement. Below are descriptions and examples of each type of metrics: Engagement Volume represents total impact or potential for impact. These metrics are raw counts of engagement and include metrics such as Facebook likes, Twitter retweets, etc. Engagement Rate volume divided by the number of users or events that could have triggered the action. Examples are engagement rate per follower, applause rate per unique impression, etc. Cost per Engagement is calculated as engagement volume divided by spend and is critical for assessing the cost-effectiveness of a paid campaign.

9 The Marketer s Guide to Measuring Social Engagement ORIGAMI LOGIC viral activity from paid activity. Since paid promotions greatly impact the engagement and reach of a post, combining paid with organic and viral engagement can produce misleading results. Differences in choice of metrics also exist based on type of media, such as engagement rate being useful mostly for organic and viral, while cost per engagement applies only to paid. Both engagement volume and cost per engagement are must-haves for paid media measurement. Since there are diminishing returns with increasing spend, it is possible to either get a very high engagement volume by targeting a broad audience (high volume but both engagement volume and cost per engagement in order to get a complete view of paid media performance. On the other hand, the choice of organic and viral KPIs depends on your strategy and objectives. For example, engagement volume is useful for quantifying results of marketing efforts and linking to business impact, while engagement rate can be a measure of directional success and how much the social media efforts are resonating with the audience. When in doubt it is best to measure both volume and rate, but it may engagement rate. Engagement rate is calculated as engagement volume divided by some base volume: There are three types of base volume metrics in social media: followers, reach, and impressions. These metrics represent the following: Followers represent the audience who has potential to get direct exposure to published content. Reach represents the number of individuals who have been exposed to the content or page. Impressions are the total number of views for the content or page. Engagement volume is useful for quantifying results of marketing efforts and linking to business impact, while engagement rate can be a measure of directional success and how much the social media efforts are resonating with the audience. 9 The choice of base metric changes the meaning of the resulting engagement rate: Engagement/Followers easy to calculate, even for competitive properties where reach information is unavailable. The main problem is that the reach of a post can extend beyond the follower base via viral or paid Engagement/Reach represents engagement per individual who saw the post. Effective for assessing post quality, this metric can give a misleading view of performance since it does not differentiate between posts that have similar engagement rate but varying reach. Engagement/Impressions represents engagement per view. Since it is relatively uncommon for an individual to engage with the same post twice, engagement/reach is generally a better needed (such as CPM-priced paid campaigns). drawbacks, and use cases for each.

10 ORIGAMI LOGIC The Marketer s Guide to Measuring Social Engagement TYPES OF ENGAGEMENT RATE CALCULATIONS Use When Drawbacks Notes Reach data is unavailable; measuring engagement rate with respect to followers Effective metric for organic engagement; useful for assessing quality of follower base Does not take into account viral or paid reach Should be viewed in conjunction with follower growth Use When Drawbacks Notes Reach data is available; measuring engagement with respect to all viewers Best overall metric for measuring engagement rate; useful for assessing post quality Does not incorporate impression frequency which affects engagement rate is diluted Use When Drawbacks Notes is necessary Useful performance metric for CPM-priced media Variable impression frequency may produce inconsistent outcomes Only useful for cases requiring impression-level engagement Figure 3: Types of Engagement Rate Calculations Having chosen the KPIs aligned to your needs, the next step in establishing a standardized measurement framework is to determine how to categorize the results and maximize the relevance of the insights generated. The next section will discuss this in detail. 10 CATEGORIZING YOUR DATA Today s businesses operate social media properties across hundreds of networks, brands, products, and geographic markets. Splitting properties on these dimensions and messaging, and to focus relevant content towards a more interested audience. Below is an example of how PepsiCo, a global food and beverage manufacturer, splits its Facebook pages: 13 Brand: Pepsi, Diet Pepsi, Mountain Dew, Lay s, Gatorade, etc. Market: Pepsi Brasil, Pepsi Italia, Mountain Dew Thailand, Lay s Canada, etc. Other: Pepsi Center, Pepsi MTV Indies, Pepsi IPL, etc.

11 The Marketer s Guide to Measuring Social Engagement ORIGAMI LOGIC However, splitting properties also comes with the disadvantage of reaching a smaller audience per property (thus limiting virality), as well as increasing management overhead and reporting complexity. For this reason, it is rare that businesses create properties for individual products, limiting splits to brands and major markets. Beyond property-level splits, there are many advantages of being able to further categorize relevant, and actionable insights from the data. If it were possible to track and compare engagement for individual products for each market, the insights generated can have broader business implications beyond marketing; for example, allowing measurement of how social buzz around a product launch affects sales volume. How data is sliced affects not only the granularity, but also the accuracy of conclusions. Whenever data is aggregated, information is lost 14 and results can become misleading. For example, when a particular type of messaging works for one market and not for another, the results in the bigger market will dominate when the two markets are aggregated together. As more granular insights are both more accurate and more actionable, there is a strong case to report not only on property-level results, but also post-level results grouped by business-relevant categories. There are a number of ways to categorize posts. Tagging and classifying posts at time of creation is possible via some social media management tools, which is useful for broad and been submitted. One such method that allows postmortem categorization at scale is by using a platform that allows searching through posts and tagging them based on various criteria. There is a strong case to report not only on property-level results, but also post-level results grouped by businessrelevant categories. 11 Figure 4: Search and Auto-Tagging, Origami Logic Platform With on-the-fly categorization, results can be freely sliced and diced at a later date, flexible insight generation, as well as greater responsiveness to changes in objectives and reporting requirements.

12 ORIGAMI LOGIC The Marketer s Guide to Measuring Social Engagement The categories in which to group results depends on how the business is organized. Standard business dimensions such as brands, markets, and product categories are common, but other types of categorization, such as by marketing strategies (branding vs. promotion, acquisition vs. retention, etc.), may also prove useful. Below are three types of categorizations that improve business relevance and accuracy of results. 1. According to how marketing budget is allocated. Organizing marketing results along the same categories as budget makes it easier to track run rate and report on ROI. 2. According to how business revenue is reported. Categorizing results based on the broader business helps to show the impact of social media on revenue and informs investment allocation by identifying areas of focus. With technology that enables on-the-fly aggregation of data on different categories, it becomes possible to view results from multiple dimensions at once, increasing the potential to generate useful and actionable insights. 3. By combining similar-behaving segments. reducing reporting complexity, while maintaining accuracy of insights and conclusions. Each method has its respective advantages and use cases and should ideally be used in parallel. With technology that enables on-the-fly aggregation of data on different categories, it becomes possible to view results from multiple dimensions at once, increasing the potential to generate useful and actionable insights. One example of such a view is shown below. 12 Figure 5: Multi-Dimensional View, Origami Logic Platform ADVANCED MEASUREMENT measurement strategy on which a number of more advanced techniques can be applied. The three that will be covered here include some of the most common measurement cross-network measurement. Sentiment analysis involves determining the degree of positivity or negativity of a comment or reply, effective for assessing brand image. The wealth of data in social media has fueled

13 The Marketer s Guide to Measuring Social Engagement ORIGAMI LOGIC new interest in automating sentiment analysis at scale across dozens of properties where hundreds or even thousands of comments are posted daily. There are a number of companies today that perform sentiment analysis, either manually or also be measured at different levels: 1. Brand-level sentiment: mainly useful as a replacement for traditional brand surveys and allows you to measure your brand versus competitor brands at a high level. 2. Product-level sentiment: more useful than brand-level since the additional granularity allows higher potential for insight generation compared to brand-level analysis. 3. Topic-level sentiment: has potential to produce insights at a deeper level than even the product-level analysis. Examples may include distinction between product feature sentiment versus pricing sentiment or reactions towards individual promotions. More detailed insights require more granular data and therefore more advanced or timeconsuming analysis. The above examples require data on brand, product, or topic being collected by the sentiment analysis tool and a way of aggregating this post-level data according to relevant categories. Regardless of the granularity at which sentiment data is collected, it is critical that sentiment be reported separately from engagement score. If these scores were combined for instance, by weighting the value of comments based on sentiment then one will likely end to 100 neutral comments. Figure 6: Example Engagement Score Calculation Using Origami Logic s Formula Editor 13 analysis since it allows distillation of multiple KPIs into one. The easiest way to create such a score is to assign weights on each type of engagement. The greater the value placed on a particular type of engagement, the greater the weight should be. For example, the formula below may represent engagement score on Facebook. driving virality, with the expanded reach potentially translating to an increase in other types of engagements as well. Applause, conversation, and other types of non-viral engagements also help with promoting conversation and retention so they should not be ignored entirely. They also help to increase the algorithmic ranking of posts, indirectly improving reach. How exactly to weight them relative to one another depends on your social media strategy and objective, as outlined earlier.

14 ORIGAMI LOGIC The Marketer s Guide to Measuring Social Engagement While being able to condense four metrics into one makes engagement analysis more information. According to the Facebook formula shown above, for example, there may be no distinction between a post that had acquired 1000 likes and no comments versus one that had acquired 200 comments but no likes. a high level, but detailed analysis for insight generation should always drill further down to individual metrics. It is possible to aggregate across networks and across engagement types to create a single cross-network engagement score. different platforms (Facebook, Twitter, YouTube, Instagram, and Google+) results in a total of 4 x 5 = 20 metrics that need to be reported on. Cross-network engagement scores help becomes possible to aggregate cross channel data. The simplest example is where metrics of similar types are summed: Conversations = Facebook Comments + Twitter Replies + LinkedIn Comments + Applause = Facebook Likes + Twitter Favorites + LinkedIn Likes + Facebook Shares + Twitter Retweets + In more complex cases, metrics for one channel may be weighted differently from another if the networks are thought to have different levels of marketing effectiveness. Taking the aggregation one step further, it is also possible to aggregate across networks and across engagement types to create a single cross-network engagement score that 14 Figure 7: Nested Formulas, Origami Logic Platform As a warning, the rule of more information being lost with more aggregation applies here as well. At this level of aggregation, there can be no actionable insight gleaned just from the metric itself. For instance, even if the cross-network engagement score goes up, the rise appropriate action without drilling down into individual channels or metrics.

15 SUMMARY As marketing enters an era of accountability, there is greater pressure to show quantitative results of marketing investment. In order to maximize the value of social metrics and categories, which together lay the foundation for a solid measurement framework. With such a framework in place, it becomes possible to generate insights that are accurate, actionable, and valuable to the larger business, further establishing social media as an integral component of marketing strategy The CMO Survey February 2014, retrieved May Social Media Examiner, 2014 Social Media Marketing Industry Report, retrieved June The CMO Survey February 2014, retrieved May Social Media Examiner, 2014 Social Media Marketing Industry Report, retrieved June Social Media Examiner, 2014 Social Media Marketing Industry Report, retrieved June L2, Social Platforms 2013, retrieved May The Social Media ROI Cookbook, Altimeter Group, retrieved May MarketShare and Kelley Fay Group, Quantifying the Role of Social Voice in Marketing Effectiveness, retrieved May As of June

16 ABOUT ORIGAMI LOGIC Origami Logic is changing the way businesses measure, analyze, and optimize their platform, global brands in a variety of industries, including banking, credit cards, FMCG, media and entertainment, and retail, are deriving greater value from their marketing data and making better decisions, faster. in social media marketing, please contact us at or visit our website at

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