Social Media Marketing Measurement

Social networking sites such as Facebook have given marketers a new approach to Internet advertising — something called viral marketing. Viral marketing is really just a high-tech form of word of mouth advertising. Here’s how it works. Suppose you own a bakery. You have lots of loyal customers, but, like any business owner, you would like to have more. You create a free page on Facebook describing your business, and you update it frequently with news about special promotions or new product offerings. You encourage your customers to visit your page and become “fans” of it. When they do, you can send them automated updates, and they can visit your page with just one click from their Facebook accounts. To increase traffic to your page, you might decide to buy targeted ads on Facebook. So far this approach is rather conventional. It is really no different from the way businesses have used the Internet for a number of years. But something else happens when people become fans of your Facebook page: the name of your business is added to their personal profile. Now all their Facebook friends see that they are fans of your business. Some of them become fans, and the process (you hope) just goes on and on. This is the essence of viral marketing: encouraging people to pass on a marketing message to others. If your message is appealing, it has the potential to spread exponentially throughout your community and beyond. Facebook has actually taken the concept of viral marketing one step further. Suppose you decide to run a Facebook ad targeted to everyone in your local area. Suppose, also, that you have a Facebook page with 100 fans, and each one of those fans has 50 Facebook “friends.” When those friends see your ad, it will say something like this: “Sample our delicious baked goods. Your friend Adam Smith is a fan.” Clearly the potential for viral marketing is enormous, but how do you measure its effectiveness? Earlier approaches to Internet marketing used some traditional methods of measuring how well an ad worked. For example, each ad might have a unique 800 phone number for responses. Or each ad might have a link to a coded discount coupon that customers could print out or use online. But these traditional methods don’t lend themselves to social media marketing. Marketers have developed new approaches to measuring the effectiveness of a social media campaign. They measure such things as:

What is missing from these measurements is data on conversions (sales). As social media marketing matures, advertisers will keep looking for ways to measure results in terms of dollars rather than clicks.