Tuesday, February 19, 2013

Should You Care about Likes?

I've had a lot of conversations over the past weeks about social media metrics and kpi's.  One of the most intriguing questions asks whether or not the "Like" (or followers, connections, etc) is an important metric to gauge marketing effectiveness.  After waffling back and forth over the answer to this question, I've settled in on a definitive "maybe".

While likes are a good rough estimate of effectiveness, marketers don't get paid for rough estimates.  They get paid for logical, precise analysis on how a campaign benefits the brand.  Now, one can always argue that fans and followers indicate credibility.  That's all fine and dandy, but one could also find a lot of "credible" people/companies out there who aren't making a whole lot of money.  The key is to not solely focus on "likes", but to connect metrics such as "likes" to a business objective.  Jim Sterne, along with many other experts on the subject, argues in Conversionation that you must first set business objectives before getting into tactics.  These objectives usually fall into three main categories:
  • Raise Revenue
  • Lower Costs
  • Increase Customer Satisfaction  
These are very high level business objectives that are fairly universal.  Targeting a business objective will help you create a linkage between the objective and the metric(s) that you are tracking.  Sometimes, however, you have to go a few levels into it in order to fully create your link.  Take "raise revenue" for example.  I'm not yet able to draw a direct connection between the "like" and a business objective.  I ask myself "Does a "like" raise revenue?"  Not really, so we would need to find another metric.

Another method of categorizing KPIs is by business function.  In her article Social Analytics Formulas to Use for ROI Reports, Danielle Leitch organizes KPI's in the following:
  • Marketing
  • Sales
  • Customer Service
Within each category, she develops traditional metrics that can be measured using social media.  See the example table below:

In this example, the number of "Likes" (along with shares and comments) divided by the number of published pieces of content would get to a measure of program effectiveness by reach, growth and engagement.  In this case, "Likes" are important, but only one component of the KPI.

Another way to slice it could be by type of social behavior.  Pritt Kallas, in his article 48 Social Media KPIs, categorized KPIs by the following:
  • Distribution - e.g., followers, fans
  • Interaction - e.g., retweets, sharing
  • Influence - share of conversation vs. competitors, sentiment, # of brand evangelists
  • Action and ROI - conversions (downloads, subscriptions), leads, cost of sale
  • Internal - costs associated (tweets, posts, development costs)
Importantly, Pritt recommends to benchmark kpi's against your competition, setting a baseline, and continuously tracking.  This is very important.  The fact that your  facebook page has 100 more "likes" this month than it did last month really doesn't mean anything with out a historical and market comparison.

The last method that we will discuss for grouping KPIs would be by channel. For example, Kent Lewis, of Anvil Media, cited the below matrix for kpi's in his article The Social Media Metrics that Truly Matter.

There are so many options in today's social media ecosystem.  It's not realistic to say that you are focusing on all of them.  Depending on the products that you sell, different channels will have different importance.  In today's market, Pinterest is an important channel for women's lifestyle brands given the heavy proportion of female users.  On the same token, SlideShare and Linkedin may have more of a business to business focus.  You should pick the channels that have the best chance of driving business and focus on them.

The above examples all highlight the fact that industry practitioners are not satisfied with a standalone metric such as a "like" alone.  Don't focus on "likes" for the sake of having "likes".  Find out what is creating opportunities for your business.  Don't be afraid to try new things, but be systematic.  Measure everything, and move on if something isn't performing.  If "Likes" are bringing you business, then don't waste your time on them.  There's bound to be something else out there that can prove to be more effective.