Debunking 4 metrics myths about ROI

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When communicators see the term ROI, it’s like a bull seeing a waving a cape: It’s irresistible, but it only leads to trouble.

I get a Google alert every time someone mentions “social media ROI” or “PR ROI.”

In my role with The Conclave concerning social media measurement standards, I search out any and all flagrant misuse of standard measurement terminology and best practices.

Conclave-approved terms and techniques have been crafted and agreed upon by more than three dozen brand marketers, PR agencies and academics. More than 100 organizations have already pledged to support these standards.

I find those Google alerts to be better than a triple shot at Starbucks at getting my brain waves going.

Here are a few typical examples—and why you shouldn’t believe a word they say. The original text is indented, the most egregious errors are in italics, and my comments are in parentheses

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1. This is from a prominent speaker at a major international conference who somehow has confused activity with profitability, and click rates with awareness:

How Can I Prove a Return on Investment for Social Media?

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(Nobody actually measures the ROI of social media. If they claim to do so, they are one of our Measurement Menaces of the Month.)

Measure awareness—Facebook Insights and Twitter Analytics allow you to track the success rate of your posts, advertisements and interactions. These are the perfect places to start charting the effectiveness of your social media efforts.

 (The way to measure awareness and visibility is through a survey. Never mind that only a small percentage of people actually see anything on Facebook or Twitter. Facebook estimates that less than 3 percent of anything posted on FB is actually seen, so how does that translate into “awareness?” Even if consumers click on something, that doesn’t mean they’ll remember it an hour later.)

Show engagement—Measure trends, topics, hashtags, and more with Brandwatch, GroSocialand Keyhole. This allows you to see how your efforts are affecting your brand’s visibility from your specific profile.

(The degree to which social media hashtags and mentions affect brand visibility is highly debatable. First of all, not all social engagement is desirable. Second, whether social media affects your brand depends on your target audience and brand, so you can’t generalize about brand visibility just from measuring trends on Twitter.)

Chart influence—You can use tools like HootSuite and SocialFlow to track sentiment toward your brand across the internet. This allows you to see if your social media efforts are painting your organization in a positive or negative light.

(Sure you can track sentiment on social media, but it may not be accurate enough to tell you how people are feeling about your brand.

Many sentiment engines are good only for easily identifiable products, such as specific movie titles or unique spellings. If you don’t review the sentiment carefully, you’ll probably make rash generalizations based on flawed data.)

2. This is from a major presenter at the AMEC Measurement Summit (where the original Barcelona Principles were introduced).

ASRs provide the cost of purchasing the equivalent amount of media space and/or time as advertising and are a quantitative statistic used to evaluate publicity. The iSentia ASR methodology is based on:

Print: casual column centimetre advertising rates for newspapers, casual full-page colour rates for magazines; content size
Radio and Television: content duration; 30 second cost per thousand (CPT) advertising rates; timeslot average audiences; prime time 30 second rate cards (where CPT/audiences are unavailable)

Online News: Cost per thousand (CPM) or time-based advertising rates; daily page impressions; daily unique visitors; daily content produced; content size

(AVEs, God help us!)

3. Then there was this, from another major supporter of the Barcelona Principles:

NEW YORK, Feb. 13, 2012 /PRNewswire/ — Kantar Video, a division of WPP’s insight, information, and consultancy network, Kantar, has released the results today of a comprehensive study of online video viewership and social activity from Super Bowl XLVI advertisements. The study finds that within the first 3 days, the top 10 ads created $ 862,000 on average in earned video impressions, a 12.7% return on the cost of a Super Bowl ad spot. Overall, this year’s ads have created over $ 11 million in earned media and saw a 267% increase in viewership over last year’s Super Bowl. This increase in online video viewership underlines the increasing trend for advertisers to use the Super Bowl as a launch-pad for multi-platform commercial campaigns.

(Again with the AVEs.)

4. This is from Sports Video Group talking about how social media has become a priority:

However, as sports organizations tout the importance of social media to branding and fan engagement, a question arises: when will it deliver a return on their investment?

“We do look for social media to bring in revenue, but we use social as a branding tool first and a business tool to bring in revenue second,” said New York Mets Director of Social Media Will Carafello at the 2nd Screen Summit: Sports event last month. “Keeping fans engaged is as good as ROI for us.”

(That is the equivalent of saying that reading a recipe is as good as eating a gourmet meal. There is no way your chief financial officer or investors would agree that fan engagement is as good as ROI. They are two different things. One is a potential indicator of fan loyalty which may at some point turn into revenue; the other is an actual increase in revenue.)

A version of this article originally appeared on Paine Publishing.(Image via)

Ragan.com

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