The first step is simple: start monitoring numbers that measure something and draw the right conclusions. For instance, when the temperature reaches 35 degrees Celsius, air conditioning helps office productivity, making it a mediating factor for, though not a cause of, your Return on Investment (ROI).

Similar reasoning applies to social media measurement. We have addressed some of these issues previously:

Budgeting for SM: Cost-benefit analysis vs. ROI
Measuring ROI: Why it fails
KPI experts’ 5 secrets

In this post we focus on measuring smarter, while ensuring that we correctly work out the statistical pattern and address five critical pointers for establishing a successful monitoring program.

Assume nothing, question everything.

Qualitative and quantitative measures
We love to use quantitative measures because these are easy to acquire. Often, traditional measuring follows a script similar to this:

a) Number of unique visitors from each source (e.g., search engines, referrals, direct visitors),
b) Size of network (‘likes’ on Facebook formerly called fans, subscribers, Twitter followers), and
c) Quantity and quality of commentary about brand or product (of limited importance for SMEs, but crucial for big names like Nespresso and Perrier).

However, the above data is usually biased (e.g., a unique visitor is not necessarily unique), or the pattern we discover is incorrectly attributed to a cause.

So while collecting quantitative data saves time and is relatively easy, as Aldo Gnocchi points out, qualitative assessments are critical but difficult to do systematically without using huge resources, such as time to analyze how engaging comments really are.

Metrics that make sense
Qualitative and quantitative data, as well as a combination thereof all help improve performance. Most importantly, we must be clear on how we intend to measure our social media efforts. More often than not, numbers do not convince those holding the purse strings.

1. What do you want to achieve with social media activity?

If you are a small business, building reputation (i.e. what others think about you, your product, etc.) is all there is, since the cash available hardly enables building a global brand.

Social media is not for selling, but staying in touch with and keeping your current clients engaged, while connecting to potential new ones.

2. What social media activity are you trying to measure and assess?

It is obvious that different social media channels (e.g., corporate blogging, micro-blogging, participating in social networks) require different methods to measure your efficiency.

In fact, you may not want to use certain tools to engage clients, but to gain intelligence, learn and build a reputation as an expert (e.g., Twitter).

This is in contrast to corporate blogs, which focus best on serving clients’ needs for information and tools.

3. How much is enough?

In the same way that making a quiche or soufflé does not make you a chef, surfing the web does not make you an expert on social media measurement. You may need advice to set things up properly in order to:

a) Require no more than 10 minutes to get the info you need daily, and
b) Spend an optimal amount of money for your situation (e.g., subscribe to the Freemium version or 30-day trial and check data weekly at My.ComMetrics.com).

Figuring out what data are used for are the next critical steps (see points 4 and 5 below).

4. We’ve got data – now what?

Once we have collected data, we need to focus on:

a) Watching the trends, and
b) Comparing our performance to benchmarks (e.g., best in class, competitors).

Whichever competitor keeps your boss awake at night is a good place to start for comparison.

5. How can we get actionable metrics?

Noticing that crops grow under trees is fine, but concluding that bird droppings increase yields may be incorrect. The challenge is to work out whether a statistical pattern is caused by what we think it has. For instance, a regression analysis can demonstrate correlation (the two variables just happen to move together), but it cannot tell you whether sales increase because of A/B testing (i.e. causality).

One can use what economists call an ‘instrumental variable’ (also sometimes called a moderator or mediating variable), which is some outside force that partly mimics the effect of a properly randomized trial.

Another technique is to look for sudden jumps in variables that have nothing to do with the matter at hand (see Angrist and Pischke, 2010).

The challenge is two-fold: making sure the boss can follow your statistical explanations (not an easy task if you have to explain what an instrumental variable is), and ensuring you don’t confuse causality with correlation.

Thereafter, data have to be interpreted correctly and the right decisions must be made, such as:

a) What can we do with the data and metrics to improve performance? Should we (e.g., get more pageviews)?
b) If we are over or under budget (e.g., pageviews) what caused this result AND how can we further improve and/or achieve our goals?

Just collecting metrics and feeling good about them is not useful because this makes them vanity metrics. What matters most are the insights data can provide and our actions to improve our performance as a result.

Take-aways
Telling a manager that the company got ‘10 favorable tweets’ or ‘5 positive comments on Facebook’ is nowhere near as valuable as the single tweet that recommends a specific action to others (see right).

Besides, we look for:

- baseline measurement: establish a baseline so you know where you are starting from.
- annual audits: why did some blog posts, tweets or ad campaigns work while others failed, and can successes be repeated?
- trend monitoring: watch trends and make comparisons with past results (e.g., April 2010 with April 2009), while taking the necessary actions to improve.

In order to properly measure your baseline and complete future audits that will yield good information, Key Performance Indicators (KPIs) must be agreed upon right away, and you must always verify references and data to ensure they are what they seem.

Beware potential fallacies in data, as pointed out by Tim Gier: “I think, though, that often the results that we can measure cause us to chase after goals that are actually at cross purposes with long term success, goals which are not worth having.”

Finally, let us not forget that learning about metrics and putting an effective measurement system in place is a process, not an event.

More resources

Marketing Sherpa – What social metrics are organizations monitoring and measuring? => Not a representative sample but interesting.
Social Times – The 10 social media metrics your company should monitor
ComMetrics – Sentiment analysis for online content: Honest?
ClickZ - After a sour start in social media, skittles gets sweet results => Giving away discount vouchers and free product helps now, but does it help in the long term as well?
Angrist, J. & Pischke J.-S. (March 2010) – The credibility revolution in empirical economics: How better research design is taking the con out of econometrics. Discussion Paper Series No. 4800. Bonn, Germany: IZA

What is your take? What measures have you taken to arrive at actionable metrics that help your organization improve its social media effectiveness? Are you planning any new measures? Are there metrics you measure that we did not mention that you feel are more important for your organization? Please let us know in the comments!

You can get updates for this blog on Twitter by following @ComMetrics, get a free subscription by RSS, or get new posts via email:

Article source: ComMetrics – Social media metrics: 5 critical steps to success

ComMetrics University – coffee break webinars
Webinars are held every Wednesday at 8:45 AM CET for no more than 20 minutes – the time you spend on a coffee break. In order to make each webinar as interactive as possible, we will limit attendance to about 15 people, so please register yourself NOW, since space is limited and filled on a first-come, first-served basis.

Our inaugural webinar was held last week. Today we have:
2010-04-07 ComMetrics University – coffee break webinar: Social media metrics: 5 steps to increase productivity

Or just leave a comment below and we will make sure that you get a personal invitation with the particulars for next week’s webinar, including presentation slides that include links to further resources and freebies.

Every week we tweet about a lot of fascinating stuff, highlighting great content that is of interest to social media folks and corporate bloggers. This weekly compilation provides you with our top tweets for the previous 7 days.

Our top stories include the biggest tweetup ever – by Ford (go figure) and using banner ads since 1994 – HotWired, why cost-benefit analysis beats ROI hands-down when showing SM’s bottom-line effects, why you should join us on Facebook – AGAIN, and distrust all studies claiming Twitter will do wonders for your business, an invitation to the Social Media Monitoring group on Xing (if you want to know what Europeans are up to regarding web or social media analytics, you’d better join). Plus, check out some free Twitter tools, and more to better manage your brand on social networks.

In case you missed the last three weeks’ best links:

ComMetrics weekly review: Google to Barcamp Liechtenstein via Amazon for week 46.
ComMetrics weekly review: eBookers to Twitter via Google for week 47.
ComMetrics weekly review: ROI to porn via Facebook for week 48.

Don’t miss the upcoming week! Sign up with your email right now to get it first:

If you are a #Xing (Europe’s LinkedIn) member: Recently, we launched the Social Media Monitoring group. Your personal invitation is here (If you’re not a member yet, please join NOW.)

Also, if you are on Facebook, please join:

- Facebook – Europe – Social Media Metrics group – contribute your insights.
- Facebook – ComMetrics – product – join now and become a fan.
- Facebook blog by ComMetrics – view it here.

B2B – Luxury labels and manufacturing
RT @UdiDelgoshen: #things2read - 4 rules for social media success: Luxury brands

FREE tools, code for Twitter, blogs and Facebook: Tips and tricks
Twitter #analytics – why both quantitative AND qualitative #metrics could still fail you

Benchmark social media – best practice
#things2read – Budgeting for Social Media (SM): Cost-benefit analysis vs. ROI

Smart #strategy with #KPI and #metrics: Learn to #measure, measure to learn #pr

RT @deborahdrake Best and worst SEO practices for designing high-traffic websites #metrics #tools2follow

White papers – trendwatch
#things2read – Of libraries, doctorates and Web 2.0 – how the British Library outsourced a study and the outsourcer failed research 101.

The first banner ads on the Web (1994) => history in the making – in the US, of course:

1. HotWired – the first commercial digital magazine on the web and the offshoot of Wired magazine.
2. AT&T, Volvo, MCI and Club Med

#trendwatch FT reports: US newspaper article notes that, on average, each is paper is published 4.4 times, either full or partial content, by unauthorized websites.

#trendwatch see graphic Google accounts for 53 percent of ad #revenue being run alongside unlicensed stories.

Social Media – information security, privacy
#threats2watch2009-12-08 – Final Patch for 2009 on Tuesday. Microsoft will release six security updates #things2patch

Cases – failures – how NOT to do it – Social Media 101
35 percent of firms claim improved customer engagement with Twitter in 2009 – how did they #measure? By surveying people about their activities on Twitter and asking them if it was a success: a sure way to bias the results.

#first2move Ford organizes the biggest tweetup ever => blog post by @PamDyer
BUT WHY would any smart consumer fall for this – except to party and have Ford pick up the tab? Free booze always gets some people’s attention.

What did we miss this week? Please add your tweet about what we missed in a comment below. Thank you.
Interested? You should follow us on Twitter.

Skincare specialists praise the power of the pomegranate as the new miracle ingredient. Will social media be the miracle ingredient needed for small and micro businesses to make their mark during this economic crisis? Here I outline what ComMetrics intends to do to, with your help, make 2009 a year to remember. And I do feel sorry for Ronald Lauder, heir to the perfume and cosmetics fortune, who fails to find time to smell the roses. Personally, I say screw the crunch: I am off to this new year’s party.

Since I started writing this blog in late January 2008, I have passed on to my readers what I have learned about social media in order to help us both save money and time, such as:

Twitter tricks, tips and FAQs
Corporate blogging
Fortune 500

This is the time of year when many bloggers and journalists venture into making predictions for the coming year. In my case, as the grip of the economic recession takes hold all around us (including some predicting that by mid-2009 things will start to improve – NOT), I am wondering what social media, viral marketing and many other things might do for me and my business in the next year.

Just in case you forgot, neither employers nor employees can continue to feel insulated from the weakening economy after jobs have been cut so widely and so quickly in most cities around the world.

Need to do
As crisis bites, the issue for small-scale entrepreneurs like myself is whether I can outperform the big girls and boys in 2009. Sharon Jaffe put it very nicely:

Be resilient! Be prepared to bark up a lot of wrong trees. When there’s nothing up the trees, move yourself on to the next one. Set-backs and disappointment are par for the course. Protect your self-esteem and be positive. (2008-12-23)

Amazon took in 17 percent more orders on its busiest day of the holiday season in 2008 compared to 2007. Still, achieving this record was helped along by heavy price discounting and free shipping offers to lure elusive bargain hunters. Small businesses cannot survive using the same strategy, in 2009 or any other year. So should I stop using Twitter and give up developing My.ComMetrics.com or the FTindex?

No time to waste if I want to reduce my risk of joining those who will be on the dole by early Spring. And while today’s sleepwear is luxurious enough to be worn outside the bedroom, if nobody buys your lovely stock you may not be left with enough cash to pay your store’s rent for January 2009. Here, in no particular order, is what I plan to do to help things along and spend my time most effectively while using such social media as Twitter or this blog:

1. Step up efforts: get more people to sign up with My.ComMetrics.com by registering/claiming their blogs. In turn, this empowers them to benchmark their social media performance and how it affects the bottom line to save money sooner. For starters, it’s free for all Alpha Users (indefinitely) – what are you waiting for.

2. Improve dashboard customization: An ever greater amount of useful and often disparate information is provided to our users. However, being limited to a single screen to keep all data within eye span is our challenge and different needs require better ways for customizing one’s dashboard. Accordingly, we must successfully manage to display critical KPIs (Key Performance Indicators) required for effective decision-making in blog benchmarking. Why? Because that’s what the My.ComMetrics.com dashboard caters to.

3. Find one or two marketing savvy techies: We have a great team but I would love to get another person to help us with PHP and OLAP to further improve our tool(s). So, if you are able and love working part-time in a virtual team, I encourage you to apply, wherever you are located. Why not leave a message here? But only if you like to work with girls and boys who are a bit different compared to your neighbors down the street.

4. Continue getting clients for our risk and IT security consultancy to pay the bills: Get one or two more big contracts during 2009. I think this includes submitting tenders and even getting turned down a few times, something I hate.

5. Improve content and writing: There is so much to do and so little time, it seems. We have to improve how we communicate with our blog readers (namely, you), as well as our My.ComMetrics.com clients. Considering that more than 70 percent of our readers are non-native English speakers, it is time to hire a competent person to edit our writing, improving our spelling and grammar, thereby making it easier for you to get our message faster.

Bottom line
Let’s face the music and dance. Scores of employees have been left in the cold after being told that their skills are no longer needed or prized. Self-employed workers already account for nearly a third of the US workforce and number in the high teens or twenties in some European countries. These numbers have grown by 25 percent or so within the last two years.

The current recession will make it tough for these entrepreneurs to survive in the marketplace. Many will fold their tents and join the unemployment lines. Yes, a social network can help find employment, but what about making sure your business survives instead of looking for another job that provides little, if any, security?

I have outlined some of the ideas that I will use to improve my thriving business’ chances of survival during what is shaping up to be a tough 2009. If we succeed achieving at least three of the actionable objectives outlined above it will be the people involved with this project that come out as the heroes, because it is people who make things happen.

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Here’s what I’m suggesting for today. What did I forget and what is your advice to me for achieving my five objectives faster in 2009. Please provide your thoughts and insights! I love to hear from you. Thanks.
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In the meantime, register your blog at My.ComMetrics.com for free and track your performance (most important is that you start today, before 2009 comes around). Plus, follow the MyComMetrics Twitterfeed to stay abreast of the latest developments. If you also care to know more about my irreverent tips, subscribe to this blog and get a few tricks coming your way by following me on Twitter