I was feeling good about social media ROI, and how/whether people understand it. I figured, at least my people — marketers — get it. They understand how to measure social media, or at least the principles behind it.

Apparently not.

eMarketer dashed those hopes to the ground with their December 20, 2011 article When Will Social Media Measurement Mature?.

Marketers know that counting fans, “likes” and followers is not the best way to measure success in social media marketing. Yet these metrics are often the top benchmarks for performance. It’s not surprising, then, that marketers consider calculating return on investment to be the biggest challenge of using social media, and that a majority of them believe they cannot measure social media campaigns effectively.

How to Calculate Social Media ROI

Calculating the ROI of anything is easy. Subtract how much you spent from how much you made, and that’s your answer. If you spent $10,000 on a social media marketing campaign, and you made $50,000, your social media ROI is $40,000.

Simple, right?

$50,000 – $10,000 = $40,000.

So how do you know whether sales are coming from your social media efforts?

I’m not going to delve into the step-by-step process, but I’ll give you the tools and concepts you’re going to need to get started.

1. Set up Google Analytics, and install the code on every page on your website. If you have a blog, it only needs to be part of the code. If it’s on a website with pre-built pages, it needs to be on every page.
2. Set up a Bitly account. Bitly is a URL shortener that also lets you do some basic analytics on the number of people that have clicked your link.
3. Create a Google Analytics tracking campaign for any and all major links you’re sending out. This is how you’re going to measure a particular blog post, tweet, Facebook status update, etc. If it’s just a basic link to the website, a campaign code is optional. But if it’s a blog post about a particular marketing campaign, set up the Google Analytics campaign.
4. Put a hyperlinked call to action in your blog posts that take people directly to a sales page or order page. Make sure that the hyperlink is given a unique campaign code.

Here’s what will happen:

• You’ll send out a link to a blog post via Twitter, Facebook, etc. Let’s say that 10,000 people see that link on your various accounts.
• 1,000 people visit your page and read that blog post, all within a 6-hour span.
• Of that 1,000 people, 100 people actually make a purchase with a total of $10,000 in sales.
• Those 100 people also fill out their contact information, which gets placed into your CRM.

By looking at these numbers, you can determine a number of things.

• 1,000 visitors out of 10,000 social media followers, fans, and friends means you have a 10% click-through rate.
• 100 sales out of 1,000 visitors is a 10% close rate; out of a 10,000-person network, that’s a 1% close rate.
• By looking at the entrance and exit paths of that particular 6-hour period, or particular day, you can see that a majority of people were moved enough by the blog post to go directly to the order page. Compare that to another blog post that only lead to 30 sales out of 1,000 visitors, and you know it wasn’t as effective in moving people to act.
• You can then subtract the cost of that particular campaign from the amount of money you made to calculate the total ROI for the day/week/month.

Calculating social media ROI is not that difficult. It’s just a matter of having the right tools and knowing basic analytics and campaign creation. There are literally hundreds of articles and several books on each step I first described. It’s just a matter of reading, and then trying out what you’ve learned. With some trial and error, and constant measuring, you’ll soon learn what works and what you can stop doing.

Or you could just hire a social media professional to do it all for you.

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Let’s say you work for a large country music festival in Prince Edward Island, Canada, and you want to quantify the value of your social network so you can get sponsors for it.

Okay, this may only apply to one of you in the entire world, but the ideas are transferable to anyone who wants to determine the value of their social network, so you can sell it to sponsors and advertisers.

Kim Doyle (@Kim_Doyle) works for the Cavendish Beach Music Festival, which is held every July. I emailed a response to her and then figured it would make a good blog post, especially since I love going to music and art festivals, and am hoping one of them will arrange an onsite consulting gig at the festival. (I’m just sayin’.)

What is the Value of a Social Network?

Basically, the statement you want to be able to make to your sponsors is “our network will have X value to you.”

Pemberton Music Festival

This is a little tough for a new network, because it has no “value,” since it’s still unproven. But an established network has more value, because you know how big it can get, you’ve already seen what it can do, and you’ve been delivering clicks and eyeballs to your other social properties.

We can’t say for certain what value the network will be until AFTER the festival happens. Next year, you can demonstrate last year’s numbers. And if you’ve been doing it for a few years, you can show growth. But it’s hard to say, our network will deliver X visitors.

That’s because you need to be able to trace the interactions and transactions from your network to the sponsor’s properties, and they need to trace what happens from there. But if they’re not doing any monitoring or measuring themselves, then they have no idea what those visitors are worth. You can only show them raw numbers, but it’s up to them to demonstrate the value.

Measuring the Social Media Traffic

1) Show them how you can track all the visitors to your website, all the members of your social network, and measure the amount of time they spend interacting with the site and with each other.

You’ll do this through Google Analytics (# of visitors, time on site, # of pages visited), Klout score (especially your influence and reach), Facebook analytics, and Bitly (# of links clicked).

Include links on your blog (“Please visit our sponsors who make this possible. The more you visit, the more they support us.“), and count the number of times people click those links. Post links to their sites via Twitter (“we want to thank Floaty Bits Bottled Water for supporting Cavendish Beach Music. Visit them here.”)

If you can show those numbers, you can show sponsors what you can deliver. If this is a new venture, start measuring the size of your network, plot its growth, and see if you can start driving traffic to your site in order to show potential.

2) Show them the demographics of who they will be reaching. If you can know a few demographics of the people who come to your festival, you can show sponsors why you’re going to reach them better than traditional mass media.

For example, if a big part of your audience falls within Generation Y, you can find articles and studies that show a lot of Generation Y doesn’t watch TV, they Tivo it and skip commercials, or they watch a lot of YouTube videos on their mobile phones. So create promotional videos, put them on YouTube with a sponsor’s logo in the bottom right corner just like on TV.

See how many different ways you can drive traffic to the video, and measure each channel to see what drove the most traffic (use different Bitly links per source, 1 for Twitter, 1 for Facebook, 1 for the blog, etc.) Measuring that traffic will give a sponsor an idea of the kind of traffic you’ll be able to drive for them.

3) Remind them that they are going to be reaching a niche audience in a way that no one else can: they will reach a large group of people who are passionate about your festival and that music/art. But unlike the festival-only sponsors, they’ll be reaching them long before and long after the festival ends.

And not in the “your logo will be on the t-shirt” way of reaching them.

But if you’re sending out tweets that point to videos with a sponsor’s logo on it, and those fans watch the videos to see who will be playing, or to see a recap of the last festival, those sponsors get more exposure than the ones who were only visible during the festival itself. And any links from the YouTube page to the sponsor’s page can have a major positive impact on their search engine placement.

Consider doing a daily/nightly recap of the festival each day. Treat it like a little newscast where a “reporter” is on scene (film it with a high-def digital camera, not a mobile phone), interviewing artists and fans, showing a few seconds of the artist playing, and then putting it all into a YouTube video (complete with sponsor logo). Tweet that out a few times the next day, let people access it via QR code, and put it on Facebook for the fans who couldn’t make it, and count the traffic there too.

These are just a few ways music and arts festivals can find a sponsor specifically for their social media marketing and social networking efforts. These kinds of affinity groups can be a marketing goldmine for marketers because they’re reaching a dedicated niche audience who has an affinity for that festival, and are more inclined to support people who support something they love.

Photo credit: theburied.life

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Robbie Williams is an SEO Consultant at Slingshot, and wrote this guest post in exchange for a guest post I wrote for their website.

Robbie Williams. I love his version of 'Somewhere Beyond the Sea' from Finding Nemo

What grabs a social media guru’s attention faster than mentioning the term “social media guru?”

The answer: Providing data-driven ROI statistics for their industry and, better yet, doing it in conjunction with SEO.

Worked, didn’t it?

Now that I have your attention, I want you to dabble in my thoughts for a moment.

I’ve often pondered how a social media practitioner would address the topic of “Search and Social” as they are the two dominating powers on the Internet. Now I know. They turn to the SEO professionals to address it.

As we all know, the Google algo is one of mankind’s best kept secrets. So I’m not going to come out and tell you that I know anything in my industry to be a 100% fact — aside from what Google tells us directly (which often keeps me up at night). However, I can back up my opinions and observations with the experience of day-in, day-out SEO practice, where dealing with rankings for an array of keywords is my entire world.

Within this digital domain, I’ve had first-hand experience with the algorithm and how it responds to certain human signals; e.g., social signals. However, (drumroll please….) social signals alone have yet to produce an identifiable, data-proven effect on rankings in the majority of SERPs. So yes, given the access to the data streams of Twitter and Facebook, there has been a trace amount of evidence where social media has had a noticeable effect on rankings in certain keyword search queries.

Now, back to proving ROI for social media with search. We all know how powerful social media has become and it’s not unreasonable to think that Google doesn’t realize it too. As a matter of fact, it has attempted to gain access to the Twitter and Facebook “fire hoses” (the full feed of information behind their massive firewalls) but to no avail … yet. As soon as this happens, you better believe that social media is going to have a significant effect on rankings, and it’s only a matter of time.

***Disclaimer: As an SEO professional, I am required to mention the discussion Correlation vs. Causation when discussing this topic. So here it goes: a page/brand/keyword will typically have social cues surrounding it because it’s a good page/brand/keyword and it will rank accordingly because of this. The reverse is not true, a page/brand/keyword will not rank only because it has social. In the world of SEO, it’s never that simple.***

Imagine a graph illustrating the respective positions of traffic-driving, conversion-producing keywords in individual SERPs (Search Engine Results Pages). Now overlay it with another graph of social media activity that’s been strategically produced around the same SEO keywords.

What do you see? Positive correlation (not necessarily causation). Additionally, imagine a Google Analytics graph showing increased conversion, increased on-page time and click-through rates, as well as a decrease in user bounce rates for those same keywords and their associated pages, overlaid on top. (I’m drooling at the thought of this, I don’t know about you…)

Boom. professional search engine optimization company. Aside from work, he loves being outside; running, mountain biking, adventure racing, etc. Robbie’s current motto: If you keep life full, you never have time to worry about tomorrow.

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Should you have a sponsor for your blog? Is it worth the effort? Or are you selling out your soul by accepting filthy lucre for a company to have a say in your blog’s content and tone? And which company’s filthy lucre should you pursue?

(Yes, yes, not really, and it depends.)

I’ve been DMing with Mark Eveleigh, a first-class travel writer, book author, and photographer who takes some gorgeous photos of those places you’re never going to see before you die, about whether he should blog (he should) and if he could get a sponsor (he could). He also owns a freelance photography assignment agency where several other outstanding outdoor photographers are available for hire.

Mark Eveleigh. Petty jealousy and raging insecurity make me want to not help him. A guilty conscience makes me do it anyway.

Mark has an interesting situation, because a sponsorship for his personal branding blog makes a lot of sense. As I see it, he would appeal two basic categories of readers: travel enthusiasts and photography enthusiasts.

The experience levels in these two categories may range from “I wish I could do that” to the serious amateur to the consummate professional. And because Mark is a specialized travel writer and photographer — trips to remote locations to take beautiful pictures — he is most likely attracting readers who want to do similar activities, or at least learn more about it.

Why Sponsor a Blog?

Travel writers have a special niche that can appeal to a wide range of readers — from people who like to travel to people who like to read about travel — who have self-identified as loyalists and users of a particular special interest. That’s a valuable niche for marketers to tap into. Anyone who sells products to travel fans should take advantage of sponsorship opportunities.

So who should sponsor Mark’s blog?

If he wants to appeal to the travel readers, he should talk to large travel agents that specialize in adventure travel, airlines that travel to out of the way locations (think Brazil, Thailand, South Africa), adventure travel gear manufacturers, and publishers of travel guides for the adrenaline-addicted.

On the photography side of thing, he should reach out to makers and online dealers of high-end camera equipment, camera bags, and other photography-related businesses.

(Frankly, Mark’s camera manufacturer, Nikon, should be begging him to throw their logo all over his blog, and include him in their ads.)

In exchange, Mark can write include basic mentions in an occasional article, review a sponsor’s service or product, and allow some ads on his site.

Sponsorship doesn’t always have to include money though. It can also include goods or services. For someone like Mark who travels constantly, it could be free flights for a year, or an expensive new lens to review and keep.

Prove Your Value First

Of course, pursuing sponsors also means being able to prove the value of the blog itself. It means knowing the number of readers, what their interests are, what kinds of influence they have, and even who they are.

Using tools like Google Analytics for web traffic (where they came from, what they read the most), Klout for influence (your readers’ and your own), and even what your network is interested in (using Twellow.com or Gist.com) can help bloggers show where their readers are coming from and what they’re interested in.

I think that as blogs grow in popularity and blog owners are able to show something newspapers have never been able to demonstrate — accurate and up-to-date reader stats — we’re going to start seeing more marketers get involved with real bloggers who can deliver on both great content and valuable readership.

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• 

Do you know what audio theater is? Does it make you think of something to do with speakers at a movie theater? Or maybe it’s a subset of home theater equipment. Or maybe you’re supposed to go to a play and shut your eyes.

It’s none of those. It’s what we used to call radio theater. (Or radio theatre, if you’re Canadian or British. Or a snooty purist.)

Cast of Decoder Ring Theatre, an audio theatre company in Toronto.

You know what radio theater is, right? Remember when Ralph and Randy sat in front of the big giant radio and listened to Little Orphan Annie? We all know what that is, even the people who only hear about it from their grandparents.

But the people who actually do radio theater want to call it “audio theater” instead. Why? Because people don’t listen to the plays on the radio anymore, they listen to them on CD players, iPods, computers, car stereos, etc.

So in order to be more accurate, they changed the name of the art form to more accurately reflect what it is that they produce.

And lost out on a large portion of their potential audience.

There are still plenty of people who used to listen to radio theater with money to spend, but they don’t spend it on the entertainment form from their childhoods because they don’t know it’s called “audio theater” now. Companies like Decoder Ring Theatre have worked hard to overcome this hurdle by being one of the most progressive and dedicated audio theatre troupes I’ve ever seen, embracing social media and Internet marketing, as well as podcasting. (Full disclosure: Decoder Ring Theatre produced and aired six of my Slick Bracer radio plays this summer.) But a lot of other companies have only seen a fraction of this success, and I believe it’s primarily because of this language disconnect between what is “correct” and what is “best.”

How many times have companies harmed their marketing efforts by insisting people call a term by what they want to call it, not what the customers want to call it? How many times have government agencies lost the respect and credibility they worked for, because someone who knows nothing about public communication insisted the agency use the accurate term, not the best term? How many news programs get laughed at because they try to change the commonly accepted term to something that better suits their political biases?

• An agricultural equipment company I know calls its products by the term they want to use, rather than the more common term their customer uses. This is evidenced by the 1,200 Google searches for their term, and the 20,000+ searches for the common term. While they may rank well for their chosen term, they don’t rank at all for the term their potential customers are using nearly 8 times more often.
• When the H1N1 epidemic flu first started, the public was calling it “swine flu,” but the media managed — with a lot of work — to get people to start calling it H1N1, because it was harming the pork industry. But the government agencies wanted to call it the human flu, and flu pandemic. Regardless of what they wanted to call it, the media ignored them
• Fox News’ insistence on calling suicide bombers “homicide bombers,” as per the Bush White House, made them a laughing stalk among journalists and news watchers.

If you’re not sure whether people are using your terms or theirs, go to Google’s Keyword Tool and put in your term and any industry terms you can think of. See which terms have the most global (worldwide) searches and the most local (US) searches. The ones that win are the ones most people are using, and the ones you should be focusing on.

Update: Deleted “Audio” from “Decoder Ring Audio Theatre” above, because despite being a loyal listener for 5 years, and now a contributor, I still can’t get their name right.

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Jason Falls is currently rocking the Exploring Social Media Business Summit in Toledo, Ohio, talking about measuring social media marketing, and making sure that businesses are making money from it. There are three Very Important Questions every business manager will ask of their social media manager, and you’d better be able to answer them.

1. How much did we make?
2. How much did we save?
3. Are our customers happy?

Jason Falls rocks his talk about social media measurement at #ESMToledo

This is why social media monitoring and analytics is so crucial. You need to be able to show your boss that your social media campaign was not $20,000 thrown down the toilet, because you thought it would be cool to sell your bulldozers on Facebook.

Use Google Analytics to Measure How Much You Make

Google Analytics can tell you how people came to your website, what pages they visited, and whether they went to your sales page and placed an order. If 300 people visit your website because of a tweet, 30 people went to your sales information page, and 3 people placed an order, you have a close rate of 1%. If your social media campaign costs $1,000 per month, but those 3 sales are worth $4,500, your ROI is $3,500.

Use Your Accountant to Tell You How Much You Saved.

Social media is a great way to handle customer service complaints, reducing the amount of troubleshooting calls that take 20 minutes, reduce technician visits, or even the total number of calls coming in to your service center. Ask your accountant to tell you how much you saved from month-to-month. Calculate the average cost of troubleshooting calls, technician visits, and the monthly salary of a call center rep. Get with your Google Analytics person and social media monitoring person (#3) to see if you have seen an increase in social media activity. Chances are, the latter had an effect on the former, so count these savings as a win. If you spent $1,000, but saved $3,000 in a month, your ROI is $2,000.

Or, more importantly, if we combine the two, you spent $1,000, and made/saved $6,500, your ROI is $5,500.

Use Social Media Monitoring Services to Measure How Happy Your Customers Are

Radian6, Lithium Technologies, Sysomos, are some of the biggest social media monitoring services around (they’re all subscription-based services, so expect to pay a fee), and if you’re a larger brand, it’s worth doing. If you have a small company, set up a free listening post with tools like a Twitter search (like a TweetDeck column), SocialMention.com and/or Google Analytics to see what people are saying about you. Quickly respond to any complaints or queries, and make sure you’re keeping people happy (see #2 above).

Happy customers are returning customers. Measure the sales of returning customers, especially those who have complained in the past, but you managed to keep by solving their problems, and compare that to the amount you paid for the social media monitoring service, and you’ve got your ROI.

We’re hopefully moving beyond the “social media is all about the conversations” way of thinking, at least in the business world. While this was cool and froody back in 2008, businesses are starting to use this as a new marketing channel. For those companies who want to make money this way, it’s real simple: just measure how much you made, how much you saved, and whether your customers like you.

If you can’t answer these questions, quit playing Farmville and go find someone who can answer it for you.

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Lately I’ve been writing and talking about the importance of businesses working with or hiring social media veterans instead of social media rookies to manage their social media campaigns. I’ve talked about why social media is not an entry level position, and why it’s important for companies to hire people with several years of work experience to manage their entire social media campaign.

The State of Social Media for Business 2010

Last November, SmartBlog on Social Media released a report called “The State of Social Media for Business,” asking whether social media veterans or rookies — companies that have been using social media for several years compared to a few months — are doing a better job of social media.

While the report is about companies that use social media, not individuals, the same ideas apply to people — especially those who have used it for a few years for clients — versus the people who have only used it for a few months, but think their 100 hours playing Farmville and leaving cookie haikus on the Oreo Facebook page somehow qualifies them to be a social media consultant.

For their report, SmartBlog surveyed readers from a variety of industries and companies, and editor Jesse Stanchak pulled some of the best results from the report. (Disclosure: Yesterday, SmartBlog published my article about six social media tools to monitor your personal brand, and Jesse was my editor on the piece.)

SmartBlog found that companies with more than three years of social media experience — compared to companies with less than six months — are more likely to:

• Say they have a fully developed or well-developed social-media strategy (65.7% of veterans compared with 13% of rookies)
• Measure the return on investment of their social-media efforts (36.1% of veterans compared with 9.6% of rookies)
• Say they would not be able to operate without a strong presence in social media (27.9% of veterans compared with 3.6% of rookies)

(It’s this last sin — operating without a strong presence in social media — that many marketing agencies and PR firms commit when they offer social media services to their clients without practicing it themselves. They claim they can manage clients’ social media campaigns, but have 300 Twitter followers and still run their entire website on Flash, which can’t be indexed by search engines.)

Stanchak attributes these differences in veterans’ performance to five key areas, veterans invest more in social media, have support from their leadership, diversify their tools, and use social media for more than just marketing.

But it’s the fifth point that really caught my eye: Veterans are more likely to listen.

Stanchak said that while both groups are almost as likely to use social media to put out news releases and maintain fan pages, it’s the veterans who are more likely to listen, experiment, and measure. (Stanchak didn’t say measure; I threw that one in myself. But he would have, because he’s smart that way.)

Social media veterans will listen to their networks, their customers, and their colleagues in the industry. They’ll experiment with new tools and new campaigns. Then they’ll measure the results, and make the necessary adjustments and measure again. They’ll make sure it’s the right thing to do, and they’ll use it the right way.

The problem most social media veterans face is the influx of rookies who read a book on social media and get hired by companies who believe social media is for young people.

While I don’t have a problem with social media rookies — after all, everyone has to start somewhere. We were even rookies once — my concern is that too many companies accept their advice. Then, when things go wrong, the companies blame social media and say it was a mistake to ever get started, while the rookie walks away from the problem and finds a new client or employer.

On the other hand, the smart rookie will figure out the problem by listening, experimenting, and measuring, making the necessary changes on the way. The smart rookie has identified mentors and teachers who will show them how to become smart veterans.

For businesses who are looking to hire a social media agency or employee, whether it’s for business blogging or social media management, check their pedigree and history. Ask them how long they’ve been doing social media. Ask them about past campaigns and how they dealt with problems. Ask them about their past failures. (And if they say they’ve never had any, they’re either lying to you, or they’re too new in the business to have any real experience.)

What about you? What have you seen from a social media veteran or rookie? What lessons have you learned? What are you hoping to learn? And if you’re a rookie, am I way off base? How are you making sure you don’t make the same mistakes of your predecessors?

My book, Branding Yourself: How to Use Social Media to Invent or Reinvent Yourself (affiliate link), is available on Amazon.com, as well as at Barnes & Noble and Borders bookstores. I wrote it with my good friend, Kyle Lacy.

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Last Friday I tweeted: “I’m easily impressed. I’m not easily flabbergasted. @kabaim just flabbergasted me. Follow him and ask how he did it.”

Screenshot of my Twylah page. Click to see a bigger version.

@kabaim is Eric Kim, founder and CEO of Twylah, the new Twitter tool that Eric says is going to change the way we use Twitter. Twylah (@Twylah)does all these amazing things. So many of them, in fact, that I’ve probably forgotten a few them here.

Imagine going to a website that’s laid out like a magazine theme for a blog. On that page are your tweets, categorized by the topics you tweet about most. There, a visitor can see those categories, and read more tweets within each of them. The layout page will pull out any photos you’ve included with your tweets, and then organize the rest in reverse chronological order.

This does a number of things for you, for the reader, even for search engine optimization.

• It lets visitors experience your tweets visually, rather than seeing an entire timeline. Don’t like one particular category, like your 90 minute ongoing discussion with your project team about where to have lunch? Replace it with one you prefer. Want to highlight a Twitter topic from two months ago? Drop a less interesting one and replace it with the old topic.



• It can pull in tweets from weeks, or even months ago. This gives life to your tweets, beyond the typical 1-hour life expectancy that our tweets usually have.
• Each Twylah page is a real web page. The links on them are shortened using bit.ly, which means they’re not only trackable, but they even count as backlinks to your real site. This will be a big help for anyone who needs an SEO boost.
• You can direct people to your Twylah page instead of your Twitter profile page, giving people an expanded view of your bio. Now people can see if you’re a real person, and if you talk about what you claim to talk about.
• People can even follow you directly from Twylah, rather than jumping back to your Twitter page to follow you.

These are all pretty cool features, and based on my scribbled notes, there’s a lot of amazing stuff that Twylah is going to do.

But, there are three things that social media marketers and practitioners need to take note of, because these things are going to be H-U-G-E for social media professionals. Of course, these will not be included in the initial rollout of Twylah, but Eric expects them to be available around 6 weeks later. (I hope I didn’t just jinx that.)

Further down my Twylah page.

• Users will be able to subscribe to a person’s categories of tweets. For example, if you’re following Douglas Karr, but only want to read his tweets about the Marketing Technology Blog radio show, you can subscribe to that category. Here’s the even cooler part: Those tweets will be emailed to you as a newsletter. Subscribe to several people and their categories for a bigger newsletter, and read their interesting tweets at your leisure.
• Twylah will have an analytics package. Not only can you see how many times your stuff was retweeted, or how often you tweeted about certain topics/categories, but you can see how many people engaged with your tweets — retweeting, clicking links, etc. For example, if you tweet about the Android phone, you can also see the engagement with those tweets has gone up. If you also tweet about the latest Twitter meme, you may see that your engagement went down for that topic. Translation: You can adjust the topics, and even time, of your tweets accordingly, based on the engagement of your tweets by your followers.
• Twylah’s analytics will also tell you what you need to tweet about and when, to help your engagement improve. Twylah will actually help you figure out when most of your network is actually using Twitter, and what sort of tweets interest them the most. What’s cool: This is especially useful for people who are very particular about following people with certain backgrounds, such as book marketers trying to build a following of independent bookstores.
• Twylah will eventually aggregate the total engagement of different topics. Imagine being able to know which of Twitter’s trending topics are actually engaging the readers. Maybe the new iPhone 5 is one of the trending topics in July, and 20% of the people are engaging with those tweets. As an iPhone marketer, you would then know that you need to tweet more about the iPhone with links to important information, like nearest retail location.

A lot of these way cool Twylah features are still in the Alpha stage, while Eric and his wife, Kelly, are working feverishly to roll the beta out in the middle of February. If you want to be a part of the beta, go to Twylah.com and register. Also, ask Eric for a personal demonstration of Twylah.

You’ll be flabbergasted. I know I was.

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The one advantage social media marketing has over traditional marketing is accurate measurement.

With tools like Google Analytics, Google Webmasters, SEOMoz, and even bit.ly, you can see how well your corporate social media campaigns are working. (Doug Karr has a great post, Your Analytics is Missing the Mark, on the different social media tools you can use.) I can use these tools to measure my social media performance, down to the visitor, the second, and the penny.

But you can’t do that with traditional marketing.

Why Can’t You Predict the ROI of Social Media?

Last week, I talked about why it’s important that — at least in early discussions — you ignore the question of “what’s the ROI of social media?”. That’s because, as Scott Stratten said, you can substitute words like “Twitter” with “talking.” Then you’re asking questions like “what’s the ROI of ‘talking?’” “why should we be ‘talking’ with our customers?”

Part of the reason is that social media is so new, it’s difficult to say what your ROI is going to be. For example, we have one client that has $20 million in sales each year, and we helped him grow his sales by 6% through social media. We have another client whose business is big enough to employ four people, and she tripled her sales — that’s 300% growth — through social media.

So, our range of success is 6% to 300%. That’s a pretty big range. We could split the two and say “on average, you can expect 153% growth,” but that wouldn’t be accurate or honest. And we could say “you can expect anywhere from 6% – 300% growth,” but that would also be misleading.

However, what we can tell you is that we can accurately measure every step of your social media efforts, from the number of people who visit your blog, how they got there, which stories they read, how long they read it, whether they read another story, and did they follow your sales funnel?

But you can’t do that with traditional marketing.

Traditional marketing can’t do that

The reason the ROI question for social media is rather silly is because traditional marketing can’t measure those same numbers with the same amount of accuracy. To be fair, traditional marketing has a long history of measurement, and they can give you basic numbers, like “the industry ROI on direct mail is 2%,” or “100,000 people usually watch this station locally on Sunday nights.” But they’re still missing a big piece of the pie.

• Cable TV stations like to tell you how many homes get their channel, not how many people watch it. The Golf Channel boasts their channel is received by 110 million homes, but they don’t tell people that their daily viewership averages around 77,000.
• Magazines and newspapers will tout their readership, but they can’t tell you how many people read a particular story on a particular day, or how many people saw your ad.
• Billboard companies can give you an approximation of how many people drive by, but they can’t tell you whether they actually looked at the billboard, or how many times people have seen it.

And bottom line, none of these marketing channels can tell you which of your ads compelled people to buy, or which one contributed to increased sales.

The closest you can come to measuring these channels is by putting channel-specific phone numbers and websites on the ads. If someone calls that number or visits that website, you can assume they responded to your ad. But you still don’t know how many people saw it or how many times they saw it, and you can’t monitor overall traffic.

Profit is the most important measurement

Of course, the only thing that really ultimately matters is your profit. It’s not just increased sales (although that’s important), it’s also reduced costs in customer service, travel, and even printing. If social media can help you answer customer questions while reducing phone hours, improve networking to help grow relationships without traveling, and disseminate marketing information without printing out brochures.

The analytics tools that exist can show you all of these things. And by tying those figures in with your customer service, sales, and marketing departments, you can easily figure out how social media is making or saving you money.

But you can’t do that with traditional marketing.

Photo credit: Wikimedia

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I was at a client meeting with Paul yesterday, and he made an interesting point:

“Blogging is a lot like dieting. You won’t see any results in the first three months. It’s that 3 – 6 month period of faithful dedication that you start to see the results.”

We see this a lot in our business: companies dive into their social media and blogging efforts, go gung-ho for the first month, slip a few times during the second, and give up after the third after nothing happens. The same is true with dieting (excuse me, lifestyle changes). But most dieting experts have the same advice that we offer our clients. So whether you’re trying to lose weight or grow your blog, here are a few tips that both sets of experts will tell you.

Set Specific Goals

“Lose weight” is not a specific goal. “Get more readers” is not a specific goal. What’s “more?” What’s “lost weight?” By this nebulous definition, if I get one more reader or lose one pound, I’ve met my goal. Instead, set up a specific, measurable goal. “I want to lose 20 pounds in six months,” and “I want to grow my readership by 30% in three months” are both specific and measurable.

Don’t Weigh Yourself Every Day

As you’re losing weight, you’ll occasionally plateau or even gain weight. You may have worked out, drunk plenty of water, and avoided carbs but you still put on a pound or two. You may have promoted your blog posts on Twitter, Facebook, and LinkedIn, but your readership stats still dropped. Dieting experts will tell you not to step on the scale every day, and we’ll tell you not to check your Google Analytics every day. That’s because you’ll freak yourself out with every off day, and stress about how to keep your victories going. You’re in this for the long haul, not the quick loss (or gain), so just check your overall efforts once a week to make sure you’re on the right track.

Stick With It

Like we said earlier, you can’t give up after the third month, because you start seeing results between the third and sixth month. And you really start to see a dramatic improvement after six months. That’s when everything is becoming a habit, when you’re firing on all cylinders, and when people start to notice what you’ve been doing.

But more importantly, once you hit your initial goal, you can’t quit. You can’t give up your dieting efforts, because the weight will pile back on. And you can’t give up your blogging efforts because you’ll start to slip in the search engine rankings again. Once you reach your initial goal, set a new goal, find new techniques, and focus on those.

Get An Accountability Partner

Tell someone else what you’re trying to do, someone else who will hold you accountable for your efforts. It could be a workout partner or food buddy to make sure you stick with your diet and exercise plan. Or it could be someone in your company or department to make sure you’re blogging on schedule. They’ll incessantly nag remind you when you missed your workout session or blog posts.

What’s your blogging strategy (or diet tip)? What have you done to make sure you’re doing what you originally set out to do? Share your secrets in the comments section, and let us know where you’ve found success or the pitfalls others should avoid.

Photo credit: RoadsidePictures (Flickr)

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My book, Branding Yourself: How to Use Social Media to Invent or Reinvent Yourself (affiliate link), is available for pre-order on Amazon.com. I wrote it with my good friend, Kyle Lacy, who I also helped write Twitter Marketing For Dummies (another affiliate link).

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