Liz Akers: Accountable social media is no longer an oxymoron

Oh, how times have changed. Before the Internet, people in marketing were never as exact as they are today. Remember the old days of direct mail campaigns? When you sent out leaflets with different scratch codes (remember them?) and the campaign's ROI would depend on how many order forms you got from that particular scratch code? At that time, if there was no other marketing activity around, you could usually attribute sales around the time of the campaign to the direct mail piece.

Then the Internet came along, and suddenly you could map a customer's buying journey to the nth degree and suddenly each adword, banner ad and online marketing campaign became exact in their accountability. That was when everything changed forever. Sides were drawn. You were either an offline marketer or an online one, with online marketing becoming more and more about exact numbers.

When I first stepped in to this new and accountable online world, I loved the science of it. We could generate ROI for absolutely anything and everything. But then a few years ago, I found myself in social. I would bark out comment numbers, fan numbers, views, reach and engagement rate a lot, but then when challenged on "What is the ROI?" I would fall silent.

Don't get me wrong. There are individual social media campaigns that run with a very clear ROI. You could use last touch sales, where you track backwards from an online purchase to where they arrived from, and if it was a social source then attribute that sale, or use coupons or discount codes that are only available via social channels. However, this is missing the full scope of what social is all about.

The power of loyalty

Brand awareness and being regularly engaged with a brand's social presence is worth more than attributing one sale to it, because it builds loyalty. And, in social, that means building advocacy too, which surely means people may buy more than that one sale, and their friends will be more likely to buy it too.

OK. But how do we prove this? I just need to make a few points on this before we start:

Firstly, we can see how complicated this is. Attributing a sale through advocacy and reach because it was mentioned by a fan, retweeted by one of their next-door neighbours and bought by their Mum isn't measurable on a grand scale. So, for now, I always go top-line.

Secondly, there are a number of specific measurements that we can do around social media. At Stream:20 we use a variety of listening products to track brand mentions and sentiment, such as Radian6 (paid-for) and Social Mention (free). We always look at the measurements around engagement and benchmark standards for the number of fans or followers. Also, Facebook has updated Insights, which can now delve deeper into reach, showing how far your posts have travelled by organic, paid and viral. All of these measurements are great and allow you to track how well social media is performing as part of a campaign, but they do not show ROI of your social presence.

Proving ROI

These days, the expectation for social media accountability usually crops up because you currently run other online marketing campaigns and can nail down every penny.

Great.

Remember how we did it in the days of direct mail? The correlation? Well it's time to revisit that approach – but thankfully, this time, it's not as bad as it was in the days of pure offline, when a butterfly flapping its wings in Cambodia could create a storm on the other side of the planet which in turn would reduce the ROI on scratch code G. Why? Because luckily, online is a world calculated by robots, not chaos theory, so as long as measurement is performed correctly, the ROI will be accurate.

To start with, you need to establish a baseline. To do this, look at what is the forecast of sales over the next year is without social. Then plot the forecast against actual sales from when the social media activity starts. This means we now have a gap to analyse and hopefully can prove that these sales are our social media sales. Now, create a time line against this data with all the social media activity done: competitions, polls, photo albums uploaded etc. Then, overlay all the data you have on actual sales, precursors to sales and social media figures.

This includes things like:

• Sales revenue by day
• Number of daily sales transactions
• Number of first time customers
• How often customers buy
• Average order value
• Daily website traffic
• Website dwell time
• Blog traffic
• Blog clickthoughs to website
• Daily social media mentions (split out positive and negative)
• Social media fans and followers growth
• Numbers of comments, tweets, retweets (whatever engagement you are measuring, but mark them all separately)

Now look for the correlation. This is going to prove or disprove the links between growth in sales and social media. Plus, by having all the actual social media activity on there, it will also provide a clearer picture of what worked and what didn't.

Once the connections have been made and the social media sales have been proven, work out the ROI by taking the cost of the investment in social from the amount of sales made by it, and divide the rest by the cost of the investment to get a percentage. Easy peasy.

There are a lot of social strategists using this as a method. But, everything you've read here is just for sales accountability. But there are other financial gains for a business, such as driving down costs: for example, by using social media as way to respond to customer service queries. If customers complain publicly on a Facebook wall, then as long as the problem is resolved publicly, this will drive down incoming call numbers as others with similar issues will see the solution.

All in all, social media is for the long haul. What we've included above is a framework for accountability at the moment. But we'd all like something that was more automated and meant that we had less to do in order to prove ROI. It's coming, but who knows how long it will be and who will make it...any takers?

Liz Akers is Senior Social Media Consultant at Stream:20.