SOCIAL MEDIA COUNTS – You just have to know what to count. Copenhagen Business School Mads Linnebjerg Management of Innovation & Business Development (MIB) & Supervisor: Sof Thrane, Institute for Produktion og Erhvervsøkonomi Mikkel Ib Nielsen Februar 2011 Total STU’s: 259.137 Total pages: 114 Executive Summary Social media have, in resent years, attracted the attention of companies, but they are still struggling to understand the integration and use of measurement. Theoretical perspectives for measuring social media are limited, and it is necessary to look at traditional marketing perspectives to gain insight in social media performance measurement. Companies have discovered measurement barriers, especially in determining the value of integrating social media as a part of the marketing-mix. This thesis explores how social media performance can be measured, in order to encourage company investment. The subject is investigated through both a theoretical- and field study. Two case companies are investigated. The first is Danske Bank. Danske Bank experienced communication and PR difficulties/crisis in relation to the financial crisis. Social media was utilized to reach out to customers. The second is IBM Denmark, who has the internal culture to embrace social media presence. IBM uses social media as a branding tool for the company and its employees. Interview with the media agency OMD were also conducted, to obtain further insight in traditional media measurement. The literature revealed, that traditional marketing performance measurement discloses positive relationships between measurement ability and positive impact on firm performance and CEO satisfaction. The theoretical framework is used to investigate the relationship between social media, firm performance and CEO satisfaction. The research revealed, that social media, theoretically, holds similar impacts on the relationships. Meanwhile, the interviews disclosed that currently, financial measurements are undetermined but still have the highest importance for validation of social media initiatives. By aligning traditional- and social media, using Balanced Scorecard and the Likert scale, parallels and differences in the areas of financial, internal business process, customer and learning & growth are identified and scored. These depict were social media measurement and integration still needs to be developed to achieve wide spread investment by companies. The findings must, however be put into perspective, seeing that only two in-depth case studies were documented. Social media counts - You just have to know what to count. Mads Linnebjerg & Mikkel Ib Nielsen Table of Contents Executive Summary ...........................................................................................................................2 1. Introduction .....................................................................................................................................4 1.2 Setting the scene…................................................................................................................................ 4 2. Research Question.........................................................................................................................8 3. Delimitations and area of focus ...............................................................................................9 3.1 The Focus.................................................................................................................................................. 9 4. Structure of analysis – A double case study .................................................................... 10 5. Methodology ................................................................................................................................. 11 5.1 Choice of Theory..................................................................................................................................11 5.2 Data Collection .....................................................................................................................................12 5.3 Practical Considerations ..................................................................................................................14 5.3.1 The Internet survey (quantitative data collection).....................................................16 5.4 Interpretation & Analysis ................................................................................................................18 5.5 Reliability & Validity..........................................................................................................................18 5.6 Source Criticism...................................................................................................................................19 6. Theory.............................................................................................................................................. 20 6.1 Marketing Performance Measurement......................................................................................20 6.2 Balanced Scorecard............................................................................................................................23 6.3 The Likert Scale....................................................................................................................................25 7. Traditional Marketing Theory............................................................................................... 26 7.1 Definition of Traditional Media.....................................................................................................27 7.2. Traditional Media Measurement Ability..................................................................................28 7.3 Metrics – Measurement tools & programs...............................................................................30 7.3.1 LTV – Life Time Value (RFM)................................................................................................31 7.3.2 TNS Media Intelligence............................................................................................................32 7.3.3 Return on (Media) Investment.............................................................................................33 7.4 Criticism ..................................................................................................................................................39 8 Traditional Media case - IBM .................................................................................................. 40 8.1 The company.........................................................................................................................................40 8.1.2 Services and customers ...............................................................................................................40 Page 1 Mads Linnebjerg & Mikkel Ib Nielsen 8.1.3 Vision and mission..........................................................................................................................41 8.1.4 Core values....................................................................................................................................41 8.2 Measurement Ability - IBM Denmark.........................................................................................42 8.2.1 Activities – The Campaign......................................................................................................42 8.1.7 The Monitoring Tools & Metrics..........................................................................................43 9 The point of view of an agency – OMD................................................................................ 47 9.1 An example - How to choose media for mobile phone campaign ..................................47 Summary...................................................................................................................................................50 10. Defining Social Media ............................................................................................................. 50 10.1 Relevant Knowledge & Information.........................................................................................50 10.2 Conceptual Clarification ................................................................................................................51 10.2.1 Types of Social Media ............................................................................................................52 10.3 Social Media Measurement Ability ...........................................................................................53 10.4 Metrics – Measurement tools & programs ............................................................................55 10.4.1 Google Analytics.......................................................................................................................56 10.4.2 Facebook .....................................................................................................................................57 10.4.3 Twitter .........................................................................................................................................57 10.5 Metrics – Social Media Metrics ...................................................................................................58 10.5.1 On-site metrics .........................................................................................................................58