How to Gain Strategic Insight from Digital Metrics
May 29th, 2014, in Grow Your Business
 

Most social media metrics report tactical results, not strategic impacts that achieve objectives.

Few topics give executives more fits than choosing metrics—the counts, percentages and ratios that are supposed to measure the performance of digital marketing initiatives. The great majority of digital metrics put a number on tactical results—the things that campaigns encourage people to do, such as opening emails, clicking links, reading pages and viewing videos, posting and commenting, sharing, downloading content, installing apps, “liking,” checking-in,”friending,” connecting or following.

But where is the strategic insight? Missing in action.

The reason? Most marketers aim to maximize metrics, such as “likes” or followers, rather than their own brand objectives. Why is that? We tend to think metrics have fundamental meanings, the same way that scientific measures do. But these metrics are different—they come from assumptions about how a social media service works. Views, “likes,” shares, social clicks, friends and such are really “endometrics,” as media authority and mathematician Gilles Santini calls them. These metrics describe a system in its own terms, not according to some objective standards.

A social network that encourages the philosophy of engagement, word-of-mouth, “liking,” endorsements from connections, or “sharing” as drivers of advertising effectiveness, for example, will capture data and report metrics along those lines. When these philosophies are promoted as “how advertising works” on social media, brands quite naturally work hard to optimize one or more of the metrics available for that platform to improve their chances for success.

Consider the ubiquitous “like.” How many times has a colleague or partner said to you, “We have to get more ‘likes!'” What, however, is the business reason? Usually the answer is, “Because more likes are better.” But are they?

Real-world example

Take this example: Brand X is targeting greater growth by reaching individuals who use the brand lightly, brand-switchers and non-users, and decides upon a campaign to increase “likes.” Independent studies by Karen Nelson-Field and United Parcel Service show that people who like a brand are disproportionately the brand’s loyalists or deal-seekers. “Likers” are not—as often assumed—a diverse group of people, all having warm feelings toward a particular brand. Brand X’s strategy to increase “likes” unintentionally risks transforming a growth play into a volume and promotion play. Undoubtedly it will achieve results, but probably not the growth outcomes the brand seeks (however, a brand aiming for volume gains or offering a sales promotion may find increasing “likes” attractive).

Here are three steps to strategic insight through digital metrics:

1. Develop a theory about how digital media should help you achieve your goals. Let’s take an example from packaged goods. A leading food brand sought to increase sales through increased use of social media. But the executives at the brand realized that merely counting recipe downloads or coupon redemptions would not tell a story about the initiative’s impact. Instead, the executives adopted an evidence-based theory that connected levels of brand advocacy to brand sales. Increases or decreases in brand advocacy led to increases or decreases in sales 30 days later.

2. Create a measurement framework based on your theory. The food brand recognized that brand advocacy reflected a high level of consumer involvement. Executives identified four stages of increasing involvement and precisely defined them: awareness (a consumer passively receiving message about the brand), participation (a simple effort to interact with the brand), engagement (greater or more frequent interaction with the brand and sharing) and advocacy (the consumer is committed to the brand and is speaking—unsolicited—on behalf of the brand with other consumers).

3. Select and fit metrics to the framework. Defining the stages enabled executives at the brand to select the most suitable metrics for their purpose. Importantly, they chose a manageable set—13 in all—to monitor and track. They knew that having an smaller set of metrics would result in a sharp analytic focus and result in a tight narrative about the performance of the initiatives.

This straightforward scheme enabled executives at the brand to move away from saying, “this looks good,” “this went up” and “this went down,” to understanding what is going on, what it means and what to do. If participation stage measures are going up, but advocacy measures are going down, the executives know how to interpret those changes in the context of their strategies.

Of course, these tips do not affect consumer product brands only. Faced with mounting pressure to build, grow and sustain your practice, digital initiatives take on greater importance by the day. Leaders need data that highlights the impact of strategies on performance and moves away from feasting on the eye candy of pretty numbers. Developing theories and frameworks need not be daunting or mysterious—begin by asking yourself how and why digital initiatives should work to help achieve your goals, and then ask yourself how you will know that progress is being made. Answer those questions, and you will be on your way to understanding what social media metrics really mean and what your next steps should be.

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By Stephen D. Rappaport

Stephen D. Rappaport, senior consultant of Stephen D. Rappaport Consulting, LLC, is author of The Digital Metrics Field Guide: The Definitive Reference for Brands using the Web, Social Media, Mobile Media, or Email (ARF 2014), and also of Listen First! (Wiley 2011) and The Online Advertising Playbook (Wiley 2007). Prior to forming his consultancy, he headed the Advertising Research Foundation’s Knowledge Center.

 

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