Saturday, April 21, 2012

7 Tips For Big Marketers To Increase Social-Media Marketing ROI

This article is by V. Kumar, Ph.D., Richard and Susan Lenny Distinguished Chair Professor of Marketing and executive director at the Center for Excellence in Brand & Customer Management, and director of the Ph.D. Program, J. Mack Robinson College of BusinessGeorgia State University,
Image representing Facebook as depicted in Cru...
Image via CrunchBase
Whether or not to engage in social media marketing is hardly a question in today’s world. Anyone wishing to sell a product, a service, or even an idea would not question the need for engagement.  Social media made Kim Kardashian and destroyed SOPA. It made the uprisings in Egypt possible and the elimination of Occupy Wall Street impossible. It’s no surprise, then, that marketers have recognized the power of social media in connecting with their target customers and creating an engaging brand experience online.

Accordingly, there has been a shift in marketing dollars, with many companies now focusing at least part of their marketing efforts on some aspect of social media. Larger companies in particular, because of their market position and access to resources, are best positioned to reap all the benefits of a well-conceived and well-executed social media marketing campaign.
But  one great question remains.  Instincts aside, is it really possible to measure social media results?  Budgeting is a quantifiable science, however, social media measurement remains the last big question when deciding how to allocate marketing dollars. Companies need not just a social media campaign, but a measurable, optimized social media strategy to support their marketing efforts.
With a mix of creativity and marketing science, we have developed a seven-step framework for big-budget marketers to measure social media return on investment (ROI), and the value of a customer’s word-of-mouth (WOM).  For example, Procter & Gamble is about to launch a new form of laundry detergent and wants to generate buzz for the detergent via social media.  Even this giant among CPG companies needs to put some metrics around its efforts.  By executing the following steps, P&G would not only bring more awareness to the brand, but also be able to measure the ROI and the share of total growth in sales.
1. Monitor the conversation.
If P&G wants to determine the potential for influencing purchase decisions on social-media platforms, they must first monitor the platforms such as Facebook and Twitter to see what potential consumers think and talk about the brand.
2. Identify the “ideal” candidates who can spread your brand message.
P&G would need to figure out what makes their ideal candidates ideal; living in the same geographic location, using the same platform as others, the number of people they are connected to in the network, etc.
3. Identify the influential characteristics that make up an “ideal” candidate.
P&G’s ideal candidates would need to have a high ability to influence their social network. For example, when a message is sent, the receiver should see it and also forward it in addition to posting comments about it.
4. Use the influential characteristics to locate all of the influencers.
P&G would then use the identified characteristics to find similar influencers within their chosen social-media platforms to select potential brand ambassadors.
5. Enlist the identified influencers to spread positive word-of-mouth (WOM)
P&G would develop interactive online content specific to the product that is being launched. This content would be used to promote positive WOM from influencers and allow their messages to be tracked and measured for its influence (for example, creating online games).
6. Use the candidates in a social-media campaign to talk about your brand.
P&G’s social-media campaign would incentivize influencers who would promote the spreading of positive WOM to customers, prospective customers and other potential brand ambassadors.
7. Evaluate the performance of your social-media campaign.
Last, but not the least, P&G would assess the successfulness of the campaign based on their chosen key metrics such as ROI, sales revenue and brand awareness. Our implementation of this framework with an ice-cream retailer—HokeyPokey–has shown that social media can be used to generate a 40% share of the total growth in sales, 83% increase in ROI, and a 49% increase in brand awareness in addition to inducing more positive word-of-mouth.
As social media channels continue to explode, and the urge to exploit them continues along with it, the need to develop measurement tools
Dr. V. Kumar
becomes ever more important. The steps outlined here form the basis for cogent social-media measurement for marketers from P&G to the local coffee house, and everything in between. Social media is certainly here to stay, and finally, so is the ability to effectively assess the performance of a social media marketing campaign.