Several times over the last few months I’ve heard from some start-ups and early stage companies that are betting much of their future success on the power of social media.  In many cases I  believe they may be over-relying on social media.  They talk about going “grassroots” and being “viral”  and “authentic,” and significantly decreasing their paid ad spend.  It all sounds great on paper, but I have to ask myself  “who is going to care?”  It is great that you have 700 Facebook fans, and 4000 followers on Twitter, but that does not make a market.

I believe a Social Media strategy should not replace anything in your current marketing plan.  You need your marketing mix to create awareness, leads, prospects, and customers and your Social Media plan should enhance and add to the effectiveness of all these efforts.  It should be put into place to create conversations and transparency through-out the purchase process.  It builds trust and customer service.  When it does create new leads, referrals, and awareness (and it will eventually) I think of it as icing on the cake and an investment in your brand that pays dividends.

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American women spend about $5 trillion annually… Over half the U.S. GDP, and now according to The 2009 Women in Social Media Study by BlogHer, iVillage and Compass Partners, women are turning in even greater numbers to blogs (55%), social networks (75%) and online status updating (20%) as primary sources of community interaction, entertainment and information.

Of the 42 million women engaged in social media weekly:

• 55% of women participate in some form of blogging activity
• 75% participate in social networks such as Facebook or MySpace
• 20% use Twitter
• 45% of survey respondents decided to purchase an item after reading about it on a blog

The 2009 study found that women online are now more than ever before spending less time engaging in traditional media activities like:

• Reading the newspaper (39%)
• Reading magazines (36%)
• Listening to the radio (31%)
• Watching TV (30%)
• Talking on the phone (28%)
• Meeting in person            (19%)

Traditionally and generally, women tend to be more loyal and thoughtful consumers, and once they have a good experience are more likely to talk about it than their male counterparts.  That is why they traditionally have been such an important marketing target, and now with social media tools at their disposal this tendency and purchase influence is not only multiplied, but rather compounded.  Instead of telling 6 of their friends about a purchase experience they can easily tell 60 of their Facebook friends, or 600 of their blog readers.

The Executive Summary (PDF format) of the 2009 Women in Social Media Study by BlogHer, iVillage and Compass Partners.

Furthermore, more than 60 per cent of Twitter users have stopped using it a month after joining, according to Nielsen Online research.  MySpace and Facebook have retention rates near 70% while Twitter’s retention rate is a mere 40%.
The social and cultural drivers of Twitter will continue to drive the growth of social media especially among the 18-34 demographic.  It will be interesting to see how Twitter evolves to attract more of a loyal following.  If it doesn’t evolve I can’t see how it can sustain itself in the long term.

Consumer fragmentation is making it harder to find and understand market segments.  Traditional research methodologies were designed for a different culture than today and researchers need to evolve.  Researchers need methods:  video blogs, online portals, customer forums, emotional measurement, and analysis of online comments need to take a more prominent role in marketing research.   Traditional research only captures a moment in time, while utilizing social media techniques like creating online customer forums can help marketers take an active and continuous listening approach.  Their insights will be timelier and therefore more relevant.

Here are some highlights:

• Top three questions marketers want answered: (1) What are the best tactics to use, (2) how to do I measure the effectiveness of social media and (3) where do I start?
• Marketers are mostly new to social media: A significant 88% of marketers surveyed are using social media to market their businesses, BUT 72% have only been doing so for a few months or less.
• How much time does this take? A significant 64% of marketers are using social media for 5 hours or more each week and 39% for 10 or more hours weekly. Marketers using social media for more than a year time went up to 20+hours per week.
• The top benefit of social media marketing: The number-one advantage is generating exposure for the business, indicated 81% of all marketers, followed by increasing traffic and building new business partnerships. 52% said a rise in Search Engine results. As the search engine rankings improve, so will business exposure, lead generation efforts and a reduction in overall marketing expenses.
• The top social media tools: Twitter, blogs, LinkedIn and Facebook were the top four social media tools used by marketers, in that order. 61.62% of marketers who have been using social media for years report it has helped them close business. More than half who spend 16 or more hours per week find the same results. After only a few months and with as few as 6 hours a week, more than half of marketers have generated qualified leads with social media marketing.
• Social media tools marketers most want to learn about: Social bookmarking sites were ranked of highest interest, followed closely by Twitter.

This reminds me of the scenario a few years back when I was trying to convince my higher-ups that we needed to reduce our print budget and re-invest it in the Internet (this seems so ancient now).

So show the boss all the facts and figures about consumers connecting online, the growth of Social Media, and its impact on attitudes and behaviors, but also show him how it can be tracked and measured.

It is important to remember there is not a silver-bullet when it comes to measuring Social Media.  It all depends on your goals.  Ultimately, the objective is to drive a closer connection to your customer so you can sell more stuff, but you’ve got to break it down into specific goals to make it more tangible and measureable. Is it to drive awareness, use it as a promotional tool, to use it as a research tool, to be more customer-service oriented, or build more customer-centric products?  You may have multiple goals.  Just make sure they are measureable and you have strategies and tactics to back it up.

My advice is to start with the basic measurements first and then get more specific.  If you make it too complicated upfront no one in the organization will get it.  This will help avoid paralysis-by-analysis syndrome too.  Start with ‘engagement’ metrics that you should be monitoring as part of your marketing initiatives already:

• Unique visitors
• Time spent on site
• Frequency of visits
• Depth of visit
• RSS Feed Subscriptions
• Site Bookmarking

Conversion is where the rubber meets the road though.  So ensuring you are collecting reliable conversion data for connections and readers filling out prospect forms, Social Media readers clicking over to your retail environment, or purchasing items is critical.  Having all the social networking friends or readers in the world won’t matter a bit to a ROI-minded boss if you can’t demonstrate how any of your social network is actually taking action.

Now take your measurement to the next level.  Make your reports comparative to drive business decisions.  Compare ROI of traffic generated from Social Media vs. SEO/PPC.  Furthermore segment visitors based on social networking traits. For example, did people who came through Social Media stay longer than people who came to you from other sources?  Did they look at more pages?  Measure how many people post to your online discussion group, comment on your blog posts, upload pictures and videos and/or answer your surveys. How many willingly sign up to be part of your online customer advisory council? These are people who care.  They have opinions, and more importantly are willing to express them. They are engaged.

Finally, I made the point earlier about using Social Media as a way to help measure the success of your traditional campaigns.  By integrating Social Media into your traditional media you can convert passive listeners into active listeners and begin conversations with consumers.  Are your TV or print campaigns encouraging consumers to join a conversation with you?  Once you do this you can then begin to segment customers who are conversing and engaging with you.

The key takeaway is that without some sort of benchmark, it’s impossible to determine your ROI.  Otherwise you are developing a social media program just because everyone else is doing it.  Use measurement as way to help sell Social Media as a viable marketing tool to add to your marketing arsenal.

Other links you might be interested in are:

I used this article by Jim Sterne as reference:

http://www.wdfm.com/marketing-tips/jim-sterne-social-media.php

Aaron Uhrmacher’s article is also very helpful resource:

http://mashable.com/2008/07/31/measuring-social-media-roi-for-business/

http://www.forbes.com/2009/03/26/nelson-dell-marketing-cmo-network-nelson.html

Many marketers are making the same mistake when approaching social media. “How can social media help us sell more widgets? How can we increase market share or awareness using social media? What’s in it for us?”  Many marketers think of social media as just another media channel.

People join online communities to make connections not to listen to your brand spam them.  If you want connections and influence you have to build social media karma.  Marketers need to turn their traditional marketing tactics around when it comes to social media: “what can we give through social media? How can we help consumers?” are the questions that need to be asked.  By approaching social media in a give vs. get manner the brand is creating Social Media Karma.

Isn’t this the purpose for brands in the first place: to build social capital, to be more human, and to be more emotionally connected?  In doing-so the brand becomes more profitable and achieves all those sales goals it set out to achieve in the first place.

If your brand is clear, and you are demonstrating social media karma, then consumers will be drawn to you; strangers will become prospects, and prospects will become customers.  Here are three ways to start increasing your social karma in social media:

• Make sure you are contributing valuable content to the conversation
• Initiate relationships with other community members, don’t wait for them.
• Contribute to the community via comments, re-posts, and linking

We are all connected — and now in a way that we can see.  That means thinking about individuals in isolation gets less and less useful.   Consumers want brands to join the conversation, but the bar has risen. To be seen as an authentic contributor to the conversation your marketing has to become more utility-driven.  Marketing that does stuff for people now; not just espouse the brand’s benefits or features will break-through.  Look for more and more brands to create online widgets, iphone applications, and social media applications as a way to get more involved in the conversation.  Growing companies that can start thinking in the new paradigm and implement some of these new strategies will be able to more quickly gain new market share.

Here is a perfect example of a growing company outsmarting its larger competitors with social media:

http://denver.bizjournals.com/denver/stories/2009/03/16/story13.html?b=1237176000^1793616&ana=e_vert