Social Media FAQ #3: How Do I Measure ROI?

I’m starting a new series, called Social Media Frequently Asked Questions. It’s a collection of the top asked questions I hear over and over. I’m putting them here on my blog is a great place to help everyone quickly get educated, convince their boss, or be able to help their clients get over these hurdles, pass them around.

Social Media FAQ #3: How Do I Measure ROI?

This question often creeps up at the end of a webinar or presentation that I give. While we often sing the goodness of social media tools, (and challenges) a web strategist will have to return to the workplace, and demonstrate to their management the value of any program –especially if it’s new.

Is it possible?
In 2005-2006 we debated if this was actually possible, the argument against the ROI of blogging was as difficult as measuring humans. In fact, until we can measure the impact of a conversation between an employee and a prospect at a coffee shop, it was difficult to measure social media. For me, that all changed when Charlene posted the ROI of GM’s Fastlane blog (this was long before I even thought about working with her).

What are you trying to accomplish?
Measuring “new” media isn’t as different as measuring “old” media, the trick is to figure out what your goal is first, is it to spread a message among a community? Is it to reduce support costs? Is it to learn from your community? In each of these cases you’ll have to then assign the right attributes to measure against.

New attributes for new tools
Next, you’ll need to realize that this new media actually has some new attributes (the limited page view attribute is no longer sufficient in this dimensional world), and there are some new attributes to think about (read the white paper I co-authored with Matt Toll of Dow Jones), such as authority, interaction, velocity, attention, sentiment, and actions. You’ll notice I left out the elusive engagement word, it’s used differently by everyone in the industry that it still hasn’t taken hold.

Benchmark
Lastly, you’ll benchmark your programs based upon your goals and those attributes, and you’ll come to some specifics. I’m actually leaving many, many steps out, but those are the high level tasks. You’ll likely need an expert, new tools, and probably a vendor (see my full list), doing it manually is very tedious.

More resources, posts, white papers, videos
Actually, nothing I’ve said here is new, I’ve written about it time (here’s a similar post with more detail) and time over, read all my posts tagged social media measurement.

Update: A few hours later I see this timely article from Computerworld on Life after page views: Web analytics 2.0