Measuring the value of online social media engagement

12 November 2009

The relentless pace of change in digital offers fresh and innovative ways to engage with consumers. Creative marketers are quick to pick up and pack in new enticements to generate activity and drive traffic. While the introduction of state-of-the-art ideas and techniques is rapid, there’s one issue that remains unresolved: how to evaluate and measure the new activity and determine value.

This lag between idea germination and value evaluation was highlighted by recent research into digital channel measurement I developed for the DMA. The research was undertaken among creative and media agencies and clients. It showed that while marketers are embracing digital channels, mainly to save money, and that we have more faith in digital channel measurement than offline, we’re not spending enough time embracing the all-important advanced metrics. This means we don’t know what or how something is really working.

One such metric is the net promoter score (NPS), the advocacy measure developed by consultancy Bain, which correlates consumer delight with company growth. It asks a single question - how likely is it you’d recommend us to a friend? - and produces a number which subtracts the proportion of detractors from that of promoters. The underlying ‘true growth’ only results from ‘good profits’, which only come from delighted customers.

This metric is particularly useful in the increasingly integrated and advocacy-driven digital world, and measures the whole consumer experience, which in digital channels is increasingly under agencies’ control. NPS is already being embraced by the likes of Ebay, American Express and Aviva; it’s only a matter of time before it’s reported to the City alongside revenue, market share and profit numbers.

We can now measure the relative frequency and positivity of brand mentions in social media channels. We can analyse historical activity and gain insight to drive campaigns. This is leading to fresh thinking by people like digital strategist David Carr explaining how conversations develop. He models exposure, engagement and collaboration, breaking these down into micro-steps, each with specific metrics attached.

On a positive note, the survey reported the highest level of support for measurement of return on investment, which is clearly vital for marketers in the current climate. However, the comparative lack of support for net present value, an accountancy-based metric, suggests we’re more engaged with the idea of ROI than how we measure it.