Wednesday, February 13, 2013

The Benefits of Social Media Analytics           
As technology continues to expand and connect users at increasing rates with the advent of the internet and social media sites like Facebook, Twitter, LinkedIn, etc., customer loyalties, brand awareness and the impact of communication has drastically changed the marketing landscape. In order to keep up with a society that is become increasingly connected and aware, firms must consider the impacts of these social platforms on their bottom line and think of new ways to invest their resources to capture and maintain loyal and paying customers.
           
 In recent years, many analytics companies including Google have created listening software and algorithms to monitor consumer behaviors and purchasing patterns online. Return on investments made in a web presence can be measured through the collection of data such as page views, exits, visits, conversions, etc and when interpreted correctly, this data provides measurable and actionable results that can be immediately used to modify or enhance the marketing effort. Performance and efficiency can then be quantified in return on investment (ROI) analysis; however, marketers now face a much more complex scenario with social media platforms. While Facebook currently boasts of over 1 billion user accounts [1] and is estimated to generate more than $12 Billion in revenue by 2016 [2] and Twitter with its 175 Million users accounts sending over 200 million tweets a day[3], the opportunities for firms exploit the social media market and to grow their brands seems to be limitless.
There is one argument that states that social media return on investment really can’t be quantifiably measured in any really meaningful bottom-line terms or translated into hard dollar figures. This becomes apparent when you begin to begin to analyze social media metrics such as likes, shares, tweets, Facebook page views against the most important key performance indicators (KPIs) of your firm such as conversions, customer acquisitions, customer lifetime value, etc. Without immediate dollar for dollar results, you begin to see that investments in social media analytics then become a different type of investment: one of a sort of social interaction between the marketplace and your brand where the ROI may only be seen in the long term benefits through growing and cultivating a strong consumer base who will eventually become the loyal customers of the future. 
            If social media return on investment is difficult to quantify, why should it be done and what are the potential benefits that can be realized by making these long term investments?

Some of these benefits include[4]:
·         Brand Monitoring.

This includes tracking the compliments, the complaints, when people mention your brand in conversation, video shares, articles, etc before, during and after a campaign and provide a sort of market litmus test for your brand equity in social conversation. This provides insight into how consumers are talking about and engaging with your brand.

·         Marketing Campaign Effectiveness
Through these conversations, firms can judge the overall effectiveness of marketing campaigns through direct social feedback.

·         Crisis Management
Social media platforms create a rapid fire outlet for customer frustrations and potentially damaging issues that may arise around your brand. Using social media analytics can help companies get in front of any warning signs and respond quickly before something becomes viral that could cause significant damage to your brand.

·         Strategic Connections
By monitoring how your brand is mentioned in conversations online, you can also identify and connect with  people who have a lot of influence over your potential market. These people are called “influencers” who gain their power through the number of posts that they make about your brand in blogs, forums, etc., and by how many people share or connect to these posts etc.

·         Channel/segmentation strategy
Using social media analytics, firms can also identify current and potential target market segments, distribution channels that may have not been previously considered and watch for trends in consumer preferences and expectations.

·         Competitive Research
Social media provides benefits to firms through the ability to monitor what competitor are doing with their brands and what people are saying about them. This sort of competitor you look quickly at the market landscape at keywords that consumers use to describe competitors and adjust your marketing strategies accordingly.

Investing in social media analytics can deliver value to a firm at any level. Although this value may not be easily reconciled to the bottom line, the benefits of doing so are increasingly visible as society becomes more connected and firms should seriously consider the costs of avoidance and the benefits of just jumping on the Social Media Bandwagon.