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IBIMA Publishing Journal of Social Networking & Virtual http://www.ibimapublishing.com/journals/JISNVC/jisnvc.html Vol. 2012 (2012), Article ID 313585, 14 pages DOI: 10.5171/2012.313585

Social Media – Is It Worth the Trouble?

Iris Uitz

Graz University of Technology, Institute of Business Economics and Industrial Sociology, Graz, Austria ______

Abstract

Marketing environment has changed due to the advent of the internet, the subsequent globalization and the hence ensuing greater competition. These environmental dynamics cause serious challenges for marketers. First, a strong marketing orientation is more important than ever to promote products and services successfully. It is also essential for engaging with customers, and for building brand recognition. Second, new channels, such as platforms, are added to the traditional marketing channels. Third, the pressure on marketing managers to justify their marketing allocation and spending is rising. To support managers in their marketing investment decisions, measurement metrics have become indispensable. Based on an investigation of recent studies and public sources this paper presents various approaches to marketing measurement metrics, especially metrics.

Keywords : Marketing management; Marketing metrics; Return on marketing; Social media. ______

Introduction early phases of the internet evolution, in the mid 90’s, Hoffman and Novak (1995) Media such as newspapers, radio and published a paper in which they presented a television have dominated the 20th century conceptual foundation of marketing practice and still do so. Social behavior and thinking in computer-mediated environments. They patterns have traditionally been spread via introduced marketers to the revolutionary these media. However, a new trend has changes that hey expected to occur in the evolved: social media. Although it still seems way companies interact with their customers to be in its infancy, social media is on the rise. due to the rise of the internet. And they were , Google+, Twitter, YouTube & Co. right. The openness of the internet was and are just a few examples of successful social still is a clear factor in fostering competition media applications that are already used by and innovation. With the rise of new millions of people. In fact, the number of technologies and channels, users is steadily increasing. Social which are commonly termed Web 2.0 or networking, however, is not new. It has social media, the web has become more always existed. It is within human nature to flexible. Moreover, the static with its socialize and to communicate, either to one-way communication has turned into a comment, recommend or alert each other. two way communication tool. Web 2.0 and With the advent of the internet and the especially social media have opened new globalization that came along with it, social ways to communicate, collaborate, share media was introduced and social networking content and advertise online. Thus, the became much faster. The adoption of these effectively passive audience has gained new social tools has been the fastest growing opportunities to interact. Simply said, social trend in corporate history and it is media has enabled a dialogue and discovery significantly changing the way organizations around the content. Hoffman and Novak interact with their constituent groups. In the (1995) already anticipated that the

Copyright © 2012 Iris Uitz. This is an open access article distributed under the Creative Commons Attribution License unported 3.0, which permits unrestricted use, distribution, and reproduction in any medium, provided that original work is properly cited. Contact author: Iris Uitz E-mail: Austria, [email protected]

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“consumer will be an active participant in an (Llonch, Eusebio and Ambler, 2002; Petersen interactive exercise of multiple feedback et al., 2009; Seggie, Cavusgil and Phelan, loops and highly immediate communication.” 2007; Sampaio et al. 2010).

A digital-advertising study, carried out by This paper discusses various approaches to McKinsey (2008), revealed that ninety one deriving a return on marketing and percent of marketing executives are especially social media marketing advertising online. Limited resources and investment. Thereby I focus on listing several also the economic crisis lead to pressure on measurement metrics that assist managers in the marketing budget. More than half of the evaluating and optimizing marketing interviewees were cutting their expenditures investments, rather than on calculation. on traditional media in order to shift it to the online marketing budget (McKinsey, 2008). Using social media becomes more and more These environmental dynamics cause serious popular and expensive, both in terms of time challenges for marketers and the pressure to and money. Therefore, the question of how justify marketing allocations and spending effective social media is versus the resources rises. In times of and needed to maintain the effort arises. austerity measures on the companies’ side, measuring marketing investments is of Definition of Web 2.0 and Social Media particular importance to support managers in their marketing investment decisions The terms ‘Web 2.0’ and ‘social media’ are (Seggie, Cavusgil and Phelan, 2007). two of the most common words in modern According to Bughin, Shenkan and Singer IT. Often used interchangeably, a distinction (2008) the development of measurement has to be made. tools failed to keep pace with the development of the digital world. Managers In its infancy, the Web was primarily an often use social media and do not have any information medium that provided search strategy or knowledge of the precise financial engines for the efficient and effective or non-financial returns on marketing retrieval of globally dispersed information. In investment. Accurate techniques and metrics recent years this has changed. The Web has that are capable of measuring financial and become a social place that enables people to non-financial impacts of marketing decisions network and communicate worldwide. Web will help to understand the true impact of 2.0 is a new form of internet, where users marketing investments (Petersen et al., 2009; actively participate in the development of Seggie, Cavusgil and Phelan, 2007). The content and appearance. It is generally relevance of using such metrics is well associated with network-based platforms known among practitioners. However, upon which social media applications and models that link marketing activities to tools run or function. The term Web 2.0 was quantifiable financial outcome and manuals coined by Tim O’Reilly (2005), who calls the that state which metrics to use and how to Web 2.0 a “business revolution in the apply them are scarce in literature (Ambler computer industry caused by the move to the and Kokkinaki, 1997; Ambler, Kokkinaki and internet as a platform, and an attempt to Puntoni, 2004; Davis, 2007; Kokkinaki and understand the rules for success on that new Ambler, 1999; 2009; Lenskold, 2003; Llonch, platform. Chief among those rules is this: Eusebio and Ambler, 2002; Petersen et al., Build applications that harness network 2009; Powell, 2002; Seggie, Cavusgil and effects to get better the more people use Phelan, 2007). The outcome of marketing them. (O’Reilly 2005)” The neologism activities often involves multiple factors. describes a second generation of web-based Since many of the benefits are indirect and services that allows users more than just to can also depend on subjective evaluation, retrieve information. They rely on the measuring an exact impact is very complex interactive possibilities of "Web 1.0" to 3 Journal of Internet Social Networking & Virtual Communities

provide "Network as platform" , internet forums and that allows users to run software services). As a consequence, social media applications entirely through a browser. Web influences various aspects of consumer 2.0 does not have a hard boundary but rather behavior such as awareness, purchase a set of principles for sites that adhere to one behavior and post-purchase communication or more of the principles. According to War and evaluation. According to Ebersbach (2005) the definition of Web 2.0 has eight (2008), social media is defined as (a) a web- core patterns: (1) Harnessing collective based application, (b) for people, (c) to intelligence, (2) Data as the next ‘Intel inside’, exchange information (d) and build (3) Innovation in assembly, (4) Rich user relationships as well as maintain their experience, (5) Software about the level of a collaborative communication and single device, (6) Perpetual beta, (7) cooperation. Social media therefore Leveraging the long tail, and (8) Lightweight comprises Web 2.0 services that allow software and business models and cost participants to create their own content and effective scalability. Web 2.0 aims to build exchange this generated content with other not only online website but event-driven participants. The interaction involves the user experience. mutual exchange of information, opinions, impressions and experiences. The users Social media, i.e. the use of web-based and actively comment, rate or recommend the mobile technologies/applications for social content, and social networks and social interaction, developed out of the Web 2.0. It relationships can thereby evolve. The line encompasses a large number of tools for between producer and consumer is thus online communication (e.g. texts, , blurring.

Fig 1. Distinction between Internet, Web 2.0 and Social Media

Measuring Marketing Performance authors attempted to structure the found metrics into categories. Kokkinaki and Marketing performance measurements have Ambler (1999), for example, proposed six recently received significant attention from metric classifications: (1) financial measures both scholars and practitioners. (e.g. sales, profit, turnover, contribution Traditionally, market return metrics, such as margins), (2) measures of competitive market share and sales volume, were market (e.g. market share, advertising share, dominantly used for indicating marketing and promotion share), (3) measures of performance (Gruca and Rego, 2005). The consumer behavior (e.g. customer latest literature mentions a wide spectrum of penetration, customer loyalty, and number of indicators. Ambler and Riley (2000) noted a new customers), (4) measure of consumer total of 38 key metrics on measuring intermediate (e.g. brand recognition, and marketing effectiveness, Clark (1999) found customer satisfaction), (5) measures of direct 20, and Davidson (1999) proposed 10 key customer (e.g. distribution level, profitability metrics on marketing measurability. Some of intermediaries, and quality of service), and Journal of Internet Social Networking & Virtual Communities 4

(6) measures of innovativeness (e.g. new minds and markets, (2) margins and profits, products launched and revenue of these (3) product and portfolio management, (4) products as a percentage of total turnover). customer profitability, (5) sales force and Clark (1999) downsized the categories to channel management, (6) pricing strategy, four: (1) traditional financial measures (e.g. (7) promotion, (8) advertising media and sales revenue, profit, and cash flow), (2) non- web metrics, and (9) marketing and finance. financial measures (e.g. customer loyalty and satisfaction, quality of service, adaptability, Since scholars have expressed concern that and market share), (3) input measures marketing metrics very often are not linked related to marketing (e.g. marketing assets, to quantifiable financial output, Seggie, audits and implementation), (4) output Cavusgil and Phelan (2007) examined measures (e.g. effectiveness and efficiency, existing approaches to monitor marketing and multivariate analysis). Among performance and rated them according to practitioners the set of nine metric groups of seven dimensions, which marketing metrics Farris, Bendle, Pfeifer, and Reibenstein should evolve. Table 1 gives an overview of (2006) is widely used: (1) share of hearts, their ratings.

Table 1: Existing Approaches to Measurement Critiqued on Seven Dimensions (Seggie et al. 2007)

Brand Brand equity Balanced equity Relational Customer EVA (consumer scorecard (financial equity equity psychology perspective) perspective) Financial Yes Partial Yes No Partial Yes Forward No Partial Yes No Partial Yes looking Long -term No Partial Yes Partial Partial Yes Micro No No No Partial No Yes Relative No No No No No No Causal No No No No No Yes Objective Yes Partial Yes No Partial No

Economic Value Added (EVA) is still seen as proposed widely accepted models for the one of the advanced traditional accounting measurement of brand equity. Aaker’s model metrics and therefore widely used. Even for the measurement of loyalty, considers though it is financially-based and objective, it perceived quality brand associations and has weaknesses according to the framework brand awareness. developed by Seggie, Cavusgil and Phelan (2007). The balance scorecard by Kaplan and Keller added the dimension of brand image. Norton (1992) helps managers to get a Depending on whether the measure is comprehensive overlook of the whole subjective or objective financial aspects can organization. Within their framework, the be measured. The Relational Equity customer perspective, the innovation and Scorecard, a model that combines the learning perspective, the internal business Relational Maturity Model with a scorecard perspective as well as the financial approach, provides measures on the quality perspective is reproduced. Although it of partnerships. According to the framework, ensures partially financial-measures, it fails customer equity seems to be a feasible metric to derive direct impact of marketing actions. to link marketing investment to the increase Aaker (1991, 1996) and Keller (1993) of all customer lifetime values. 5 Journal of Internet Social Networking & Virtual Communities

Some practitioners still stick to the old- Measuring Social Media Performance fashioned and common financial metric return on investment (ROI). The ROI Since the rise of social media, it has become determines the value of an investment by common among marketers to talk about setting the return or benefits resulting from social media activities. It is not only the an action in relation to the expenditure or number of users that has increased, but there invested resources. is also a growing number of social media applications, which are struggling for new Apart from a discussion whether ROI or cost users. The applications have different effectiveness is more appropriate, Likely, technology perspectives and therefore also Rockland and Weiner (2006) also present vary in their functionality and their mode of several return models such as (1) Return on utilization. The specific purpose determines Impressions model, (2) Return on Media which type of social media to use and how impact model, (3) Return on target influence the customers react and respond to it. model, and (4) Return on earned media Although Social media in our everyday model. language is mostly used for social- networking services, especially Facebook, As Barwise and Farley (2004) recommend, Google+ and Twitter, a vast variety of Social the success of marketing performance and media services exist (see Figure 2). the measurement of that always lies in the combination of different metrics rather than the single use on one specific.

Fig 2. Social Media Prisma (Ethority GmbH & Co. KG, 2012)

In the literature no common classification of interpersonal). This paper concentrates on social media tools and applications can be the most commonly used social media found. Safko (2010), for example, divides the platforms: (1) Social networking Sites (e.g., social media world into 15 categories (social Facebook, Google+, LinkedIn, MySpace), (2) networking, publish, photo sharing, audio, Blogs (e.g. Blogger, Wordpress), (3) video, , livecasting, virtual Microblogging (e.g., Twitter), (4) Social worlds, gaming, productivity applications, bookmarking sites (e.g., ) and (5) aggregators, RSS, search, mobile, Sharing Sites (e.g., , You Tube). Before Journal of Internet Social Networking & Virtual Communities 6

addressing relevant metrics for social media social media tools. The three dimensions are applications, an introduction of the above data breakouts for the use, effort required mentioned applications and platforms is (both in time and resources) and necessary. effectiveness.

A simple understanding of the services does Thus, figure 3 shows, for example, that social not only lead to the success of a Social media networks are often used, require little effort marketing strategy for a company. Social and are of medium effectiveness. The effort media services just provide a platform to usually determines the use of social media support and promote communication. The more than the effectiveness. Especially in the firms’ purpose and strategy determines beginning the focus is on “fast and easy”. The which type of social media to use. Marketing more effort required, the less likely is the Sherpa (2010) has created a three implementation of the social media dimensional chart which maps different application.

Fig 3. Three Dimensions of Social Marketing Tactics (Marketing Sherpa, 2010)

Before addressing different social media among people. Individuals, groups or metrics, the most relevant applications for companies can set up a profile and companies are briefly described. connect with others. Consumers often rate the value of the network by the 1) Social Networking Sites: The Small World number of friends and their engagement, Phenomenon by Milgram (1967) states whereas marketers evaluate the that on average every person shares six endorsement of the consumers by friends with every other person. counting the number of friends, followers Computer simulations demonstrated that and subscribers and their contribution to if you combine six billion points (i.e. the viral distribution. population of the earth) in an accurate way one can pass from any point to any 2) Blogs: A weblog or is a web site on other point only via a maximum of six which individuals, groups or business nodes. Social networking sites are online entities can publish news, opinions and sites, platforms or services that focus on commentaries various topics. Many blogs building social networks or relations focus on a particular subject or current 7 Journal of Internet Social Networking & Virtual Communities

event whereas others cover a niche topic encompasses trust and customer loyalty. or are similar to a personal . Brand monitoring solutions enable to surveil Usually new posts are listed at the top, discussions of the brand and to track the older ones follow. sentiments. Nevertheless, interpreting written statements is often difficult and 3) Microblogging (e.g. Twitter) features very subjective. Hoffmann and Fodor (2010) short posts in a maximum of 140 recommend to consider four key motivations characters and can be received in various of consumers, also called the ‘4c’s’. With ways. creating and consuming content, consumers connect online with other consumers and 4) sites (e.g. Delicious): thereby control not only their own actions Social bookmarking helps to organize, but also the market. store and manage online resources. According to the general marketing 5) Sharing Sites: Some platforms offer users performance measurement literature the possibility to store and share photos companies also still measure consumer (e.g. Picasa, Flickr), videos (e.g. YouTube), loyalty and growth prospects with the slides (e.g. SlideShare) and other media change in the Net Promotor Score (NPS) with other user, both for public and (Reichheld, 2003). The concept of NPS is private use. much more than just an analysis to determine customer satisfaction. It also has a In nowadays businesses budgets are tight strategic component. Ideally, any company und marketers are under pressure. They decision should lead to an increased NPS in need to be sure to get a return on their the long term. Through a customer survey investments and to justify the used the NPS directly measures the probability marketing mix to the executive board. Like with which a customer expresses a ‘traditional marketing metrics’, social media recommendation for the company / product metrics are not only quantitative. What is the / service. It is calculated by taking the total value of a customer attitude? percentage of technology users who are promotors and subtracting the total The measurement of social media marketing percentage who are detractors. Passively performance indicators is very complex and satisfied remain unconsidered. Promotors has to deal with numerous variables. are those customers, scoring 9-10 on a 10 Isolating single dimensions and calculating likert scale who are loyal enthusiasts and the specific impact is hardly possible. therefore will keep buying. Passives (score 7- Furthermore, each social media activity has a 8) are satisfied but unenthusiastic customers specific goal and therefore a different who are vulnerable to competitive offerings. measurement metric. Some attributes may Detractors (score 0-6) are unhappy stay the same, but the combination will be customers who can damage your brand and different. According to Owyang and Lovett impede growth through negative word-of- (2006), if you do not have a goal then you mouth. The NPS therefore ranges from plus cannot measure it. Social media is a 100 to minus 100. The NPS serves as a bidirectional communication between the decision support of social media impact, for it company and people/followers. Therefore, it shows how much a company would need to is not only essential to measure how many pay to achieve a similar outcome. Studies consumers engage but also how high the have shown a strong correlation between activity level is. Also note that not only recommendation, customer satisfaction and satisfied customers post their comments, but customer loyalty. A financial outcome cannot also dissatisfied customers express their be gauged; changes in NPS, however, relate resentment. Tracking the tone and to revenue growth. perception as well as reacting immediately Journal of Internet Social Networking & Virtual Communities 8

A similar concept is the Advertising Value the "Return on Investment", the ROI in Social Equivalency (AVE) (Likely, Rockland and media marketing is commonly referred to as Weiner, 2006), also known as “Return on “Return on Influence" or "Return on earned media”. By considering opportunity Interaction". costs, earned media and the costs of advertising, a comparison metric affirms Peters (2010) suggests the following ways to whether a dollar spent on media relations measure social media efforts: (1) awareness, publicity is more or less effective than a (2) engagement and (3) revenue, whereas dollar spent on advertising. Hoffmann and Fodor (2010) focus on three (mainly qualitative) objectives: (a) brand The ROI (Return on Investment) usually awareness, (b) brand engagement, and (c) plays an important role in investment word of mouth. Social media can enhance decisions. Measuring an ROI in Social media, brand awareness in various ways. The however, is very difficult. “The problem with decisive question is: (a) “How many trying to determine ROI for social media is consumers are you reaching?” (b) If people you are trying to put numeric quantities involve in social media activity, brand around human interactions and engagement can establish, the commitment conversations, which are not quantifiable.” to the brand arises and hence consumers are (Jason Fall, 2008) The collection of costs and more motivated to support the brand, which benefits incurred as a result of social media will reinforce loyalty to the brand. (c) Once investments genuine factual figures. In social consumers are aware and engaged they pass media marketing, the first result is always their opinions to others. Table 2 lists several the communication, the resulting key metrics according to their social media conversations and relationships. Instead of application and objectives.

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Table 2: Key Metrics for Social Media Applications (Adapted from Hoffman and Fodor, 2010)

SOCIAL MEDIA BRAND AWARENESS BRAND ENGAGEMENT WORD OF MOUTH APPLICATION Social Networks • number of • number of comments • frequency of members/fans • number of active users appearances in • number of installs of • number of “likes” on timeline of friends applications friends’ feed • number of posts on • number of page views • number of user-generated wall • number of impressions items • number of • number of bookmarks • usage metrics of resposts/shares • number of applications/widgets • number of responses reviews/ratings and • impressions-to- to friends referral valence +/- interactions ratio invites • rate of activity (how often members personalize profiles, bios, links etc.) Blogs • number of unique • number of members • number of visitors • number of RSS feed references to blog in • number of return visits subscribers other media • page views • number of comments (online/offline) • number of times • amount of user-generated • number of in-links bookmarked content and out-links • author credibility • average length of time on • number of people • conversation density site commenting on blog • ranking • number of responses to • number of reblogs • number of blog-driven polls, contests, surveys • number of log posts stories by offline-press, • content freshness in a Technorati Web media or high search profile bloggers • number of times badge displayed on other sites • number of “likes” Microblogging • number of followers • number of followers • number of retweets • number of tweets about • number of @replies the brand • valence of tweets +/ - Video and • number of • number of page views • number of Photosharing videos/photos uploaded • number of replies embeddings • number of views of • number of comments • number of incoming video/photo • number of forums created links • valence of video/photo • number of subscribers • number of rating +/- references in mock- ups or derived work • number of times published in other social media and offline • number of “likes”

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Since the upcoming of social media cannot be explained with conventional consumers have been able to express and knowledge and measures. Interactions with disseminate their knowledge and customers in real time amplify customer experiences about products and services relationship, whereas data leakage or legal faster. Owyang und Lovett (2010) suggest implications can impede the company’s some key performance indicators to measure growth. the audience engagement, conversation reach or advocacy promotion. Social media sites can also enhance customer support and service. Support inquiries that are resolved directly through social media sites can potentially decrease support costs. (Owyang und Lovett, 2010) Measuring online customer support metrics is as essential as offline KPI’s. “Share of Voice” is a competitive metric, The “Issue Resolution Rate” demonstrates relating the number of brand mentions in the percentage of customer service inquiries social channels to the total number of all that were resolved using social media brand mentions. “Share of Voice” should be channels. An implicit factor is that the segmented by channel to identify which inquiries have to be resolved satisfactorily, social media channels have the greatest which has to be tested by other means. impact.

(Owyang und Lovett, 2010) (Owyang und Lovett, 2010) Depending on the goal, different key metrics By taking the proportion of active visitors for social media applications can help to (i.e. those who actively participate in the identify the impact of the activities. The communication) into account, the “Audience adequate type of key metrics for social media Engagement” can help to identify the impact applications to identify the impact of the of specific marketing initiative or set of activities depends on the goal/aim of the actions. Quite similar is the total company. The basis of the chart by Hoffmann conversation reach, a relative percentage of and Fodor (2010) (see Table 2) was the number of unique participants in the scrutinized and completed with metrics conversation over the total exposed obtained by interviews. 20 marketing audience. managers of different industries in Austria were interrogated about metrics they use in In the future the internet will connect an their companies and about which metrics even greater number of users and critical they consider useful monitoring in the future. information infrastructures. However, why The interviews showed that less than half of do companies suddenly talk about sensitive the managers use social media tools on a data that used to be discussed behind closed regular basis and even fewer monitor their curtains before, particularly when the activities. Therefore, technical students were competitors were listening around the asked which metrics are of significance to corner? Advertisement loses its power and their social media activities and whether they influence, even though it is still about think that these data can be adopted in merchandising a product innovation. But, in entrepreneurial application. In principal the internet a recommendation is only a click individuals and companies connect with one away and people are talking anyway. another for the same reason. People expect Communication processes, engaging or hope to receive an advantage through the prospects and developing these into satisfied network. Since it is within human nature that customers has reached a complexity that actors (either individuals or companies) seek 11 Journal of Internet Social Networking & Virtual Communities

to fulfill their needs, they usually do not rest Cross Channel still until having reached their aims. But how can one obtain what he/she was yearning for The level of professionalism and when he/she never knows (or does not care) effectiveness of the company’s activities if it is unclear how to determine the actual depends largely on the expertise of the position. It might also be possible that the responsible person. This statement is also goal has already been reached. Hence, as applicable to social media activities. mentioned before, it is essential for Therefore, it is not surprising that U.S. marketing managers or CEOs first need to companies have already recognized the define a strategic goal for social media importance of the position of a social media activities or marketing activities in general, manager who, in the best case, combines and preferably also a business objective. The personal interest in social media with company, as a unit, has to walk in the same expertise in online communication and direction, knowing where they are heading. tracking methods. However, social media is After defining the goals, the company has to not a toolbox, but a new set of technologies decide which social media platform to and concepts. It is not a standalone tool, but implement and use. The expert interviews has to be integrated into the existing also showed that many Austrian marketers marketing strategy. Purchases nowadays are lack a specific strategy for social media not only made through a single channel. A usage. If the goal is to increase customer McKinsey study (2007) showed that offline satisfaction the number of minutes the firm is purchase can be influenced by online nice to customers be measured. On the other research. The DEI Worldwide study (2008) hand, the number of positive comments or examined the impact of social media on posts can indicate the level of satisfaction. customer behavior and revealed that 70% of Nevertheless, not only the number but also the consumers visited a social media site to the manner of the comment or post is get information. Based on this information relevant; a very difficult data to measure 49% of these customers purchased. indeed. However, offline activity can also lead to online purchase. Customers and friends recommend products, print media or TV commercials brand a product or company, or (Owyang und Lovett, 2010) refer to the web site or online store. Some customers prefer to examine the products Based on the mood barometer percentage of physically (in a store) before buying them positive, neutral or negative mentions about online. Fig.1 shows the percentage of touch the corporate brand, the product or the points converted to sales. service can be calculated by the n the number of mentions within a certain time period.

Direct online sales Cross-channel impact

Travel, entertainment 62 15 30

Computers 46 10 20

Utilities 31 15 14

Electronics 29 15 12

Telecommunication, media 23 13 11

Bank, insurance 22 13 10 Online sales influenced by offline touchpoints Beauty apparel 21 16 6

Automotive 17 8 6 Offline sales influenced Pharmaceutical, health care 8 6 2 by online touchpoints

Fig 4. Cross-Channel Impact (Mckinsey Study, 2007) Journal of Internet Social Networking & Virtual Communities 12

It becomes clear that concentrating on one Although social media applications are great channel and only measuring direct online tools to communicate with customers, to sales can be dangerous and might lead to a raise brand awareness or brand engagement, lack of effectiveness of the total impact. The and maybe also to increase sales, it is not a internet and Web 2.0 are great tools for standalone tool. In fact, it should always be branding a product or a company, combined with traditional media and be used communicating with customers and building as an add-on to the existing marketing up relationships, but they cannot replace activities. Furthermore, companies should traditional media. Rather than altered, the implement social media managers or even marketing mix has enlarged. social media mission control centers to constantly monitor social media activities Conclusion and Further Research and intervene with corrective action when necessary. This paper has listed several ways of measuring social media activities, based on a References review of the literature and on the analysis of expert interviews. The illustrated table of key Aaker, D. A. (1996). 'Measuring Brand Equity metrics for social media applications gives a across Products and Markets,' California useful overview of metrics assigned to the Management Review, 38 (3), 102−120. most common used social media platforms (i.e. social networking sites, blogs, micro Ambler, T. & Kokkinaki, F. (1997). "Measures blogging, social bookmarking sites and of Marketing Success," Journal of Marketing sharing sites). These are only of qualitative Management, 13, 665 −678. nature and do not reflect any return on social media marketing investments. In order to Ambler, T., Kokkinaki, F. & Puntoni, S. (2004). develop a manual for marketers that link the "Assessing Marketing Performance: Reasons so-called soft metrics (metrics with for Metrics Selection," Journal of Marketing qualitative objectives) with traditional Management, 20, 475 −498. financial performance measurement indicators, the next step is to investigate the Ambler, T. & Riley, D. (2000). 'Marketing use of social media as well as the monitoring Metrics: A Review of Performance Measures in companies. On the basis of a qualitative in Use in the UK and Spain,' Working Paper study, data of practical usage will be No. 00-901, London Business School, Centre collected and investigated. So far several for Marketing. surveys, mostly of quantitative and only descriptive manner, have been carried out. In Barwise, P. & Farley, J. U. (2004). "Marketing the majority of the cases they outline the Metrics: Status of Six Metrics in Five usage of social media platforms in domestic Countries," European Management Journal, industries, the allocation of the different 22 (3), 257−262. tools and platforms as well as the spending on social media marketing investment. Only Bughin, J., Guggenheim Shenkan, A. & Singer, few studies inquire the usage of social media M. (2008). 'How Poor Metrics Undermine and even less point out how social media Digital Marketing,' The Mckinsey Quarterly, spending is monitored. As a consequence, October 2008. this lack of measurement techniques will be analyzed. Moreover, the linkage between the Clark, B. H. (1999). "Marketing Performance different key metrics among each other and Measures: History and Interrelationships," the outcome in financial performance Journal of Marketing Management, 15, measures will be elaborated. 711−733.

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