Brands unable to measure ROI in social media, says social media expert Solis

Marketers are failing to develop the right objectives within social media, resulting in a lack of ability to measure real return on investment, according to social media expert and Engage author Brian Solis.

Speaking at the MicroStrategy Social Media Marketing and iCommerce Summit in Monte Carlo today, Solis said marketers are not using data available via social media to understand their customers, objectives or measure ROI.

Solis, principal at research advisory firm Altimeter and author of marketing book Engage, said brands need to start considering the return as being, “actions, reactions and transactions”.

“It can’t just be about conversation,” he said. “This has to be at the beginning; what is it that you want out of it [social media]?”

Solis said brands’ lack of understanding about who their customers are is holding them back from being able to use social media to impact their bottom line.

He added that brands should use their own proprietary data, as well as tap into the social data of their consumers by using tools, such as APIs, or influencer measurement tools, such as Klout or Peer Index.

Segmenting users through data would aid a brand’s use of social media, said Solis, with focus on “a data golden triangle of social media, mobile and real-time”.

Solis also claimed that brands’ lack of understanding of different customers or the complexities of different social networks was actually making them “anti-social”.

Earlier at the conference, data and technology firm MicroStrategy announced a set of new tools to help brands build apps and commerce tools using social data.

The Gateway is one of the latest firms looking to leverage social data available on a brand’s Facebook fans to inform brand CRM, marketing or sales strategies.

Michael J Saylor, chairman and CEO of MicroStrategy, said: “CEOs across many industries are committing their enterprises to establishing social media strategies, but very few have a clear idea of what to do, and even fewer have the technology to carry out their vision.”

The company also launched a consumer-facing product called Alert, a mobile app that imports a person’s Facebook Likes into it, allowing people to more easily keep tabs on the brands, celebrities and events they are interested in. The app also lets brands provide a m-commerce service that delivers users with messages based on their demographic and location-based data.

This story first appeared on New Media Age. For more digital stories and analysis’ from NMA click here now

Readers' comments (3)

  • Too right - it's about outcomes and it's all quantifiable. The tools are our there to quantify the impact of this stuff and it works.

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  • I think there’s a big difference between a brand being ‘unable’ to measure social media vs being ‘able to decide on what to measure’.
    For me, Marshall Sponder hits the nail on the head when he talks about the concept of ‘reverse ROI’ which is where social media excels. If you approach any social activity from the perspective of ‘what money are we going to make from this’ – even if you trace that objective back via softer metrics like engagement, reach etc – then you miss a key issue which is that (as Sponder says) there is an element of ‘Reverse ROI’ created by social media.

    That is to say, ROI is measured not just by sales, customers or engagement, but by money saved, opportunities rescued or disasters averted. That is where social media is valuable, but where brands often fail to measure.
    In some ways I believe the key problem for brands is that there are too many things available for measurement – and too many tools telling them that their view of the world is the correct one. Take influence, for example. In practical terms, it is impossible to calculate despite the very valuable attempts by Klout and PeerIndex (who do a good job, by the way). But in spite of this, brands have multiple tools telling them that their list of influencers is the ‘right one’, which is clearly nonsense.

    What needs to happen is measurement and monitoring to mature as an industry a little bit, become more of a social science a la market research (with robust methodology and good cerebral effort from analysts rather than twinterns) and for improved honesty from software providers – for them to say ‘we’re good at getting the data, but you need brains to do the analysis’ rather than them trying to tell us that their interpretation of the numbers is the absolute and only one.

    Barry Bridges
    head of social @ agenda21 digital

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  • I think it's very easy for companies to get caught up in the game mechanics and concentrate on getting more likes, and hoping it will transfer into money in the bottom line. That being said would it be fair to say that transactions are the most coveted returns over actions and reactions?

    Renee
    http://mymediainfo.com/

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