While the report sites multiple challenges, the prime challenge that organizations struggle with is actually tying social media to business objectives. But, while revenue is important, it isn’t everything. Eighty-four percent of survey respondents reported that the primary business impact of social media was not revenue generation, but “insight that helped us meet customer experience goals.”
Based on this research, the Altimeter team identified six primary guidelines that brands are using to measure the revenue impact of social media.
What is important to remember is that while top-down approaches provide business context and bottom-up approaches provide granularity, they are most valuable when viewed in context of each other to evaluate the complete picture.
Based on the Integrated Marketing Communication (IMC) model, the lesson for a brand manager is that the criteria for choosing the right measurement mix are:
· Identify your business type: the way your company goes to market (exclusively online or multi-channel) largely drives what is possible when it comes to revenue measurement.
· Assess your service or product type: sales cycle is key criteria in determining revenue measurement strategy, sales cycle vary considerably for low consideration and high consideration purchases
· Factor in your media mix: the type of medium (Paid, Earned and/or Owned) also influences your measurement method, as you can only measure online properties that you control.
· Consider your customer profile: possibly the most important factor, the type of customer (business, consumer and/or highly social) will determine what measurement is possible
To conclude, it’s important to remember that in real terms we are still at the very beginning of social business and no one set of measures can tell you everything. But looking at the granular data in context of broader trends will deliver a more representative view of the revenue impact of social media.
By Nikhil Kaul
ABOUT THE AUTHOR
Nikhil Kaul is a technophile, shutterbug, avid traveler, and foodie. When not indulging, he seeks problems in the ever-evolving marketplace to rattle his brain for solutions. A masters' student of Integrated Marketing Communications at Northwestern University, he enjoys wrestling with the challenges that businesses face due to the increasing influence of new media and changing customer behavior.