One corollary to that statement is “be careful what you measure.” Why? Because as anyone who has worked in marketing for any length of time can attest, target metrics can rapidly take on a life of their own. As marketers on the team start to orient campaigns and programs around the target metrics, there are two enormous and all-to-common risks:

1. The metric takes on a meaning of its own, divorced from its actual value;

It turn’s out there’s a handy “law” that applies, called Goodhart’s, found via Boing Boing, which explains both of these clearly:

“…once you start measuring GDP as a way of gauging social welfare, people will start to figure out ways to make GDP go up without improving social welfare (say, by swapping dirty financial derivatives). Once Google starts measuring inbound links as a way of evaluating the importance of web-pages, people will figure out how to increase the inbound links to unimportant pages (splogging, blogspam). And once you measure fat or calorie content as a proxy for the healthfulness of food, manufacturers will figure out how to decrease fat and calories without making the food more healthful (reducing fat by adding sugar, reducing calories by adding poisonous artificial sweeteners).”

How exactly does this apply to marketing, and social media marketing in particular?

A quick story from personal experience to illustrate:
Some years back I worked with a marketing team that was striving to make some sense of the chaotic mass of campaigns, promotions, and marcom channels churning through the organization on a regular basis. Like many orgs, they sought to standardize on a small but (supposedly) highly relevant set of goals that they felt, drawing upon research, would most effectively drive the business. That metric was “contactable profiles” – gained, for example, when a prospective customer would fill out a profile to get access to a whitepaper, and opt in for further communication from the company.

Not unreasonable as an activity goal for a marketing team, especially back in the pre-social media days when email marketing ruled. A qualified contact, who explicitly opted in to hearing more about your products and services, is always a big deal and can be an enormous marketing asset.

The problem however quickly became apparent, and it’s a case study in Goodhart’s Law. As that one metric gained prominence in reviews and scorecards, it rapidly took on a life of it’s own. Campaigns and programs that had no business collecting personal profile data – they provided no clear value to the user in exchange for it – started to incorporate it as the primary success metric. Everyone wants to show their campaigns are contributing to the business, right?

Profile data started to get collected for the sole reason of showing how your campaign was “performing.” Obviously, contactable profiles are only valuable if there’s a clear follow up plan – what are you going to DO with that data. Also, as this was before the days of Facebook Connect and single sign-on, customers quickly grew frustrated at being hit up again and again for personal profile data at every interaction they had with the company, and in situations where they saw no clear “get” for that “give.”

Take this example back to social media marketing.
All too often we hear of campaigns which have a primary goal of “building fans and followers,” a metric that is valueless when taken out of context yet has taken on a life of its own in social media circles. The result is enormous wasted effort from brands and agencies alike who churn promotions out to get more fans or followers, and once they get them a) they have no clear plan for how to leverage that engagement for real business value, and b) their new fans/followers end up seeing little value in staying engaged long term, and the brand sees high churn and disaffected followers.

Before you embark on a marketing or social media campaign, when the success metrics are being tossed around fast and furious, ask your team a few simple questions:

• How does this metric connect back to actual business goals – not just marketing goals?
• How can we build in some “reality check” milestones to ensure we haven’t let the metric get out of control?
• If it’s a metric that involves a customer or use action, what clear and reasonable value are they seeing by taking it?

Can you think of any other example when marketing or social media metrics took on a life of their own and went down the Goodhart’s Law rabbit hole?

*photo by lumaxart on Flickr, via CC license.

Related posts:

1. Abandon all thoughts of gaining tons of fans and followers
2. Activation is the Last Mile of Social Media Marketing
3. Beware the lone (social media) gunman

Enterprise business intelligence analysts are getting a new toy to play with, this one addressing the rapidly evolving field of social media analytics. SAS, practically our neighbor just up the road in Cary, NC, launched their new Social Media Analytics solution this past week in Seattle – a launch which incidentally made some very smart uses of social media in its own right. As a follow up, SAS hosted a small event Wednesday night for agencies and social media practitioners in the Research Triangle area, and was nice enough to throw us an invite or two.

A quick thanks to David Thomas, the social media manager from SAS, for both those invites and for hosting a great event. You can find some photos of the gathering over on Wayne Sutton’s blog. Beyond the networking, David managed to work in a very interesting demo of the new service. Here are two of my initial takeaways:

Read the rest…

Related posts:

1. Social Fresh Charlotte Recap – On Social Media Agencies, Rubbermaid
2. Yet again, social media is not about any tool or platform
3. Beware the lone (social media) gunman

Unless you can tell me what the hell [all those followers] going to do for you, how you’re going to mobilize them, and what you’re going to give back to them that makes it worth their while to grant you their attention and continue to give it, who cares? People aren’t marbles, and you don’t get any points for collecting a bunch of staring eyeballs that are waiting for you to do something significant. Attention only matters if can move people beyond noticing, and into investing their time and energy.

What matters is if you have the right fans, and if you’re doing the right things with them. What do I mean by the “right” fans? I mean fans who are there for the right reasons – they are interested in your product, brand, or service, in what you have to say or in the value you can provide to them. They are there to engage with you, and fellow fans, and ideally contribute in a tangible way. They aren’t there just to grab some short-term rewards before running off to the next online promotion. They are engaged. They are happy to share with their friends what they love (or at least find useful) about you.

True, volume can have some degree of virtue. If you have boatloads of followers on Twitter, chances are at least some of them are there for the right reasons. But the error is in focusing on the volume, which is what Amber is on about, because you’ll waste your time in an endless churn for any way to gather up those raw numbers. Far too many social media plans explicitly go for the topline fan or follower count, and ignore the deeper metrics that tell the story about the quality of their engagement with you.

So from a metrics perspective, what should you care about when it comes to fans and followers? Well, first off, the business metrics that matter. Beyond that, focus on ratios that indicate actual engagement with your brand, uniquely for each channel – fan feedback percentage, number of fan interactions around key content, number of @ and retweets, and so on.

Measure – and strive to achieve – what matters. Just like impressions is a measure of reach, and not impact, so are raw numbers of fans and followers. Look deeper, and focus on gathering the fans and followers that are actually valuable for your business.

Related posts:

1. Trey Pennington at PRSA Tar Heel, and some passionate bandana fans
2. Why You Shouldn’t Have a Facebook Brand Page
3. The Great Tweet Ad Debate

Oddly, the one I find most amazing is that apparently this year Boston College stopped providing email addresses to incoming freshmen. As integral as email is to my generation, as passe as it seems to be to the next.

Found courtesy of Jake McKee/Community Guy.

UPDATE: Just found the source data over on the video producer’s blog. Bookmarked…

Related posts:

1. Social Media ROI and ROMI
2. Nikon/Your Day: Social media marketing done right
3. Activation is the Last Mile of Social Media Marketing

In doing some client research on the subject last month, I found it useful to consider the subject in terms of Return on Marketing Investment (ROMI).* That helped me break down my understanding of potential Social Media ROI (smROI**) into two parts:

Short- and long-term smROI

Short-term smROI is loosely defined as when you use social media right alongside traditional demand generation elements within the marketing mix (think direct mail, email campaigns, etc). Companies like Dell use Twitter to drive direct, trackable sales through accounts like @DellHomeOffers and @DellSmBizOffers that offer up targeted product discounts and specials. Thousands of brands use blog posts in a similar manner, and you can see the same across pretty much every social media channel there is.

Calculating short-term smROI is the (relatively) easy part – you can make a pretty clear, compelling, and defensible ROI argument for these kinds of activities (X tweet generated Y sales). Unfortunately for us, that’s not really the kind of smROI that’s the subject of so much debate. That pain-in-the-ass kind is what I’ll call long-term smROI, which is really a fancy way of asking what all that “engaging in conversations” brouhaha is really worth.

Long-term smROI is akin to long-term ROMI – it’s all about brand awareness, loyalty, and other very difficult to quantify – in terms of bottom-line financial impact – activities. In traditional marketing these are the brand-building 30 second TV spots and conference sponsorships, among countless other activities. To create impact metrics many brands use survey-driven scoring such as Net Promoter, satisfaction, and so on. The same applies for social media activities that fall outside the definition of short-term smROI – they’re just hard to really measure, and as such marketers, consultants, community managers, and so on are constantly working to justify and defend them.

So what’s the solution to determining long-term smROI? Run NetP or CSAT surveys all the time? Maybe – I won’t pretend to have a firm answer, though I obviously have an opinion (a later post). One line of research I am fascinated by however is found in the ENGAGEMENTdb report from Altimeter Group/Wetpaint (PDF), released in July 2009. They paint an interesting picture to claim there is a direct correlation between brands that are deeply and broadly engaged in social media and financial success (more or less – read the report). That’s still a hell of a leap to take to management: lots of SM engagement —> analyst report! —> ROI, done! But they have some great data in there and filled an important gap in the debate.

A debate which I’m sure will continue for many years to come…

As a side note, some of the best thinking I’ve seen on the subject in a long while is by Oliver Blanchard. You can find just his smROI videos up at http://smroi.net/. Well worth the time invested.

*This isn’t to deny other ways to realize ROI from social media, such as through decreases support costs. My focus, for now, was on marketing.
**Using “smROI” based on the Twitter hashtag in use of #smROI. Seemed handy enough.

Related posts:

1. Olivier Blanchard on Social Media ROI
2. Who owns social media in the corporation?
3. Is Your Social Media Marketing Evergreen?

Related posts:

1. Social Media ROI and ROMI
2. Who owns social media in the corporation?
3. Social Media in Healthcare Cheat Sheet