Measuring Success of Social Media

Wharton Interactive Media Initiative

www.whartoninteractive.com

Steve Ennen Managing Director, Lecturer in MarketingWharton Interactive Media Initiativeennen@wharton.upenn.edu

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WIMI OVERVIEW

• Brings a passionate data-driven perspective to media businesses (content distribution and information acquisition) in a way that no other business school in the world can match.

• Distinguishes itself with a tight focus on the interaction between content provider and user, capitalizing on the wealth of individual-level data that is exploding at the crossroads of commerce, technology, and entertainment.

• Is dedicated to bringing world-class research rigor to better understand these complex interactions in order to drive new business strategies and tactics that will reshape the media landscape.

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WIMI INFRASTRUCTURE

• Global network of research & corporate partnerso Researchers from Wharton, LBS, MIT,

Wharton doctoral and MBA students

• Projects underway with:

Funding from nine

Corporate Partners and key

individuals to study data-

related issues relevant to

several industries

• Wharton Lab for Publishing Innovation

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OVERVIEW

Today

Part 1 Overview,

• Why you are here

• Number one key metric, the holy grail

• Cut through the clutter

• What is the real-time web

• Basic universal marketing measurements

• Developing a measurement strategy

The world transforms

WHY YOU ARE HERE

Number one, key metric, the holy grail!

WHY YOU ARE HERE

Number one, key metric, the holy grail!

WHY YOU ARE HERE

Challenges to measurement:

• Soft metrics – meaningless or close to meaningless

• Faux metrics – fabricated by technology

• Data deluge

• Confusion& Clutter

WHY YOU ARE HERE

BUZZ AND BUSINESS

• To earn a free burger, Facebook users download the Whopper Sacrifice Facebook application and dump 10 friends unworthy of their weight in beef. After completing the purge, users are prompted to enter their addresses and the coupons are sent out via snail mail.

• In about 60 days, nearly 240,000 Facebookers had been de-friended for the sake of a hamburger. That amounts to more than 7,000 coupons for free Whoppers.

• Facebook stopped the campaign because of privacy concerns.

CUT THROUGH THE CLUTTER

CUT THROUGH THE CLUTTER

Buzz and business

http://www.nytimes.com/2009/01/29/fashion/29facebook.html?_r=2&pagewanted=all

BUZZ AND BUSINESS

CUT THROUGH THE CLUTTER

BUZZ AND BUSINESS

No evidence of increased sales

CUT THROUGH THE CLUTTER

• Influencers

• Engagement (verb, not a metric)

• Sentiment

• Earned vs. paid media

• Real time

CUT THROUGH THE CLUTTER

Hot social media metrics

Influencers

CUT THROUGH THE CLUTTER

Influencers

• What is an influencer?

Dark and DisenfranchisedSmall Town Pride

• How valuable are influencers?Marketers hope to affect influencers to short cut mass marketing

The research shows…

CUT THROUGH THE CLUTTER

…not so muchBecker (1970) and Watts and Dodds (2007) have raised doubts on the importance of opinion leaders in speeding up the acceptance of new products

More recent research by Coulter, Feick and Price (2002) and Godes and Mayzlin (2009) provides conflicting answers to the question whether heavy users are more influential than light users, an issue of obvious relevance to the identification and targeting of likely influentials. “Opinion Leadership and Social Contagion in New Product Diffusion” Raghuram Iyengar, Christophe Van den Bulte The Wharton School, University of Pennsylvania, et al

CUT THROUGH THE CLUTTER

CUT THROUGH THE CLUTTER

Bottom line: influencers have smaller spheres of influence than current buzz purports.

CUT THROUGH THE CLUTTER

• Engagement (verb, not a metric)

“Seriously though, I am surprised that your analysis pegs me as one of the most engaged users to your site. I subscribe to your RSS feed via Yahoo, and eventually get around to reading each new posting, but my access is very occasional. Your email to me was the first that I was aware of the posting.” posting on analytics site by its “most engaged visitor”

CUT THROUGH THE CLUTTER

Sentiment analysis

Sentiment analysis or opinion mining refers to a broad area of natural language processing, computational linguistics and text mining. Generally speaking, it aims to determine the attitude of a speaker or a writer with respect to some topic. The attitude may be their judgment or their affective state (that is to say, the emotional state of the author when writing) or the intended emotional communication (that is to say, the emotional effect the author wishes to have on the reader).

CUT THROUGH THE CLUTTER

• Perceived characteristics of the company and brand

• Perceived characteristics of the competitor

• Opportunities to defend or build the organization's reputation

• Channels for revenue growth

• Potential threats

• Most effective methods and venues for engaging with consumers

• Keywords and trends for effective marketing strategies

CUT THROUGH THE CLUTTER

CUT THROUGH THE CLUTTER

Union Square Ventures partner Fred Wilson sees the futureAs "earned," not paid, media

• Earned media: viral, usage, utility, UGC, conversations• Paid media: ads• (Owned): brand-created content with the hope of moving to

earned

USV is funding companies that address the new marketing paradigm, from earned-media platforms such as Twitter and social video site Boxee

CUT THROUGH THE CLUTTER

Earned vs. paid media

The data collection radically increases speed throughReal time measurement

TOMORROW ’S MEASUREMENT

The next challenge

“Real-time is the hottest topic now” Facebook executive, Jan 21 2010

Google recently declared real-time search to be one of the biggest unsolved challenges it faces. Announced real-time search in December.

Google’s inked partnerships with both Facebook and MySpace to pull in data in real-time. For Facebook, that means public Facebook Pages, and for MySpace, it means any stream data that is publicly available. This is on top of the partnership that the company announced with Twitter in October.

WHAT IS THE REAL-TIME WEB?

NYTimes put a link to a new real-time view of all its news stories on the front page of its site.

Facebook announced a new feature that will let users be notified instantly when their friends interact with media related to themselves on the site.

WHAT IS THE REAL-TIME WEB?

Real-time web is the acceleration of the exchange of information brought on by the adoption of new technologies

Ubiquity

Ubiquity disrupts former paradigms andcreates new business opportunities

WHAT IS THE REAL-TIME WEB?

• Real-time collaboration – Google Wave

• Real-time search -Twitter

• Real-time analytics – social games

• Real-time pricing

WHAT IS THE REAL-TIME WEB?

Real time measurement

WHAT IS THE REAL-TIME WEB?

MEASURING THE REAL-TIME WEB

MEASURING THE REAL-TIME WEB

From a marketer’s perspective there are two ways to measure your blog strategy

1. The importance of your own blognew and returning visits links

Google Webmaster Tools or Bing Webmaster track inbound links

2. The interaction with another blogauthorityreadership

MEASURING BLOGS

• Blogs are, essentially, real time

• Reliable gauge of sentiment

How is Technorati Authority calculated?

• Authority is calculated based on a site’s linking behavior, categorization and other associated data over a short, finite period of time.

• A site’s authority may rapidly rise and fall depending on what the blogosphere is discussing at the moment, and how often a site produces content being referenced by other sites.

• The new Authority calculation differs from the past version, which measured linking behavior over a longer 6 month timeframe.

• Links in blogrolls don’t count towards Authority, as they are not indicative of interest in relevant content

• Authority is on a scale of 0-1000. 1000 is the highest possible authority

MEASURING BLOGS

How is Technorati Authority calculated?

How does topical Technorati Authority work?

• Topical Authority measures a blog’s influence within its subject category.

• Blogs will appear ranked by topical authority within Technorati’s blog directory.

• Factors include linking behavior from blogs and posts in the same category, how well a blog's overall content matches the category in question, and other associated data.

• It’s possible for a blog to have authority in several different categories. The authority in each category may be different.

MEASURING BLOGS

MEASURING BLOGS

OTHER SOCIAL MEDIA

Many people, including scholars, advertisers and political activists, see online social networks as an opportunity to study the propagation of ideas, the formation of social bonds and viral marketing, among others.

This view should be tempered by findings that a link between any two people does not necessarily imply an interaction between them.

Twitter

OTHER SOCIAL MEDIA

OTHER SOCIAL MEDIA

• Followers• Use third-party tools to figure out how much traffic your websites are receiving

from Twitter.• Track click-throughs on any link you post in a tweet. Some URL shortening

services let you track click-throughs

• Updates

• Frequency/Responses• Keep a tally of questions answered, customer problems resolved and positive

exchanges held on Twitter. Do the percentages change over time?• When you offer deals via Twitter, use a unique coupon code so that you can tell

how many people take you up on that Twitter-based promotion. • If you have an online presence, you can also set up a landing page for a

promotion to track not only click-throughs but further behavior and conversions.

• Keywords• Sentiment analysis Tweetfeel, Twenze Twitrratr

.

TWITTER MEASUREMENTS - BASICS

FACEBOOK MEASUREMENT

Basics• The best practitioners make Facebook less about selling and

more about interacting.• Engage with fans and critics. • Listen to what people are saying, good and bad. • Keep content fresh.• Use status updates and newsfeeds to tell fans about specials,

events, contests or anything of interest.

Measurement• Number of impressions and clicks-through• Sharing pieces of content: Defined as “web links, news stories,

blog posts, notes, photo albums, etc.”• Keywords • Sentiment

FACEBOOK MEASUREMENT

“Despite the potential of social ads where the social actions of your circle of friends could make the ads more targeted, none of the anticipated positive effects were observed. Despite the promise of mass reach, there was not the corresponding attention or clicks. And despite the use of demographics-based targeting, there was no statistically significant difference between different targets nor the control sample, running during the same time period.”

Dr. Augustine FauSVP, digital strategist MRM Worldwide

FACEBOOK MEASUREMENT

FACEBOOK MEASUREMENT

FACEBOOK MEASUREMENT

Social Gaming

GAMING MEASUREMENT AND METRICS

• How many of the new registered users turn out to be a monthly active user and how many of them are daily active users (DAUs), and what percentage of those daily active users turn out to be purchasers.

• The churn rate for social games is high — two to three months for most titles. A good chunk of players — 25% to 33% — play a particular game two to three months before moving on

Gaming Measurement and metrics

GAMING MEASUREMENT AND METRICS

• Playdom, sold more than $200,000 of virtual pink Volkswagen Beetles in two days. Its revenue is about $75 million this year

• On a recent two-day period, Zynga sold 100,000 "meat grinder" machine guns & 80,000 body armor suits.

• Mafia Wars, for example, $10 will buy 42 reward points, enough to purchase a 9mm pistol.

Examples

GAMING MEASUREMENT AND METRICS

The K factor: the k-factor in this context is itself a product of the rates of distribution and infection for an app.

Distribution measures how many people, on average, a host will make contact with while still infectious and "infection" measures how likely a person is, on average, to also become infected after contact with a viral host. That is, what is the inherent virality of the application. (53% said a friend or family member recommended the game).

• For a new registered user, how many more registered users will that give you?

• Then you have to look at the quality of users, as defined by the play rate.

GAMING MEASUREMENT AND METRICS

• Impressions (exposures and opportunities to see)-an impression is generated each time an advertisement is viewed-number of impressions achieved is a function of an ad’s reach -multiplied by it’s frequency

-Impressions do not account for quality of viewing

• Gross rating points – impressions divided by the number of people in the audience for the advertisement. Impressions expressed in relation to the population. GRPs are cumulative across media vehicles

• CPM – cost per thousand

• Net reach/reach number of people who see a message/advertisement

• Average frequency- average number of times an individual receives an advertisement given that he or she is exposed

BASIC, UNIVERSAL MARKETING METRICS

• Frequency response functions – models the reaction of a population to exposure to an advertisement

• Effective reach –measures the portion of an audience that is exposed to an advertisement enough times to be influenced

• Effective frequency – number of times an individual must see an advertisement in order to register the message

• Share of voice – quantifies the advertising “presence” of a brand

• Pageviews – number of times a webpage is served

• Rich media display time - average time rich media is displayed per viewer

• Clickthrough rate number of click-throughs as a fraction of thenumber of impressions

BASIC, UNIVERSAL MARKETING METRICS

• Cost per click – ad costs divided by # of clicks generated

• Cost per order – ad costs divided by number of orders generated (measures cost effectiveness of advertising)

• Cost per customer acquired – ad costs divided by # of customers acquired

• Visits – number of unique viewings of a site

• Visitors – number of unique site visitors in a given period

• Abandonment rate – rate of purchases started but not completed

• Bounce rate – fraction of site visitors who view a single page

• Friends, followers, supporters - measures size of a social network, but unlikely to measure engagement

BASIC, UNIVERSAL MARKETING METRICS

Step 1: Understand the environment / Landscape analysisGain a greater understanding of social media

• Blogs• Communities/Social Networks• Discussion forums • Ratings and reviews • Sharing• Video• Widgets• Wikis

• Traditional media platforms

MEASURING SOCIAL MEDIA SUCCESS

Step 2What is your measurement strategy?

• What are you measuring?

• How will you measure success?- Can you clearly define metrics for successes and failure?- Can you determine ROI, ROE?

• What are the mechanisms for gathering the data?

• How do you determine what’s important?• How will you analyze the data?• Who owns it?• How does the information move across the organization?

-Dashboards, reports, meetings, enterprise media

MEASURING SOCIAL MEDIA SUCCESS

MEASURING SOCIAL MEDIA SUCCESS

MEASURING SOCIAL MEDIA SUCCESS

Four failures of measurement & analytics

1. Information is ineffectively shared within the organization - Everyone in the strategic process needs to know

2. Goals and the metrics themselves are poorly defined - You should not be spending money or building campaigns just to bring people to your site, you must bring people to your site with a specific goal in mind

MEASURING SOCIAL MEDIA SUCCESS

Four failures of measurement & analytics

3. Companies either don’t take action or take improper action on results

The secret to truly successful marketing is actionable measurement. Measuring your results alone isn’t enough; the key to feeding them back into your sales and marketing process.

4. No holistic or cross-platform synchronization

MEASURING SOCIAL MEDIA SUCCESS

• Passion Wins: • Focus is Required• Vision is Required: • A Team Culture is Vital:• Treat Engineers as Kings: • Treat Customers Like a King:• Brand Often Means Trust: • Every Company Strives to Take the Risks Out of Capitalism: • Every Company is a Frenemy: • The Speed Of Change Accelerates: • Adapt or Die:• “Life is long but time is short.” • A “Free” Web Is Not Always Free:

25 MEDIA MAXIMS, Ken Auletta

MEASURING SOCIAL MEDIA SUCCESS

• Digital is Different• Don’t Think of The Web as Another Distribution Platform• Technology Provides Potent New Targeting Tools• The Web Forges Communities, and Threatens Privacy • Beware The Government Bear• Paradox:The Web Forges Both Niche and Large Communities • More Media Concentration, Yet More Choice • Luck Matters• No More Old Media Magic • No More New Media Magic, Either• Don’t Ignore the Human Factor• There are no Certitudes: “Today, Google appears impregnable. But a

decade ago so did AOL, and so did the combination of AOL Time Warner. “There is nothing about their model that makes them invulnerable,” Clayton Christensen, Harvard business historian and author

25 MEDIA MAXIMS, Ken Auletta

MEASURING SOCIAL MEDIA SUCCESS

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CONTACT

Steve Ennen, Managing Director,Lecturer in MarketingThe Wharton School, University of Pennsylvaniaennen@wharton.upenn.edu

www.whartoninteractive.com