If you’ve ever spat the words “Facebook” or “Twitter” in the face of your client or supervisor before, you probably heard one of the three most predictable responses:
- What the hell is that?
- Ooh yeah, we gotta get on that and go viral!
- I don’t care what it is – how do we measure it?
Dealing with #1 can be a pain, but you never know, you might actually get through to them. The folks in the #2 camp are idiots, so let’s just forget about them… which leaves us with #3 – a challenging response indeed.
So, how can we measure SMM? The question is oft asked and rarely answered. Well, leave it up to ol’ Mitchy to stick his neck out with a formula to quantify one of the keystones of Internet Marketing metrics: Cost Per Conversion.
Now, one could call it Cost Per Acquisition, depending on the website or company’s goals… regardless, what we’re talking about here is a reference point for how much it costs your Marketing department to generate a lead, a sale, a new membership, etc. Below is the data you’ll need for the formula, and getting that data is definitely the hardest part of this quantification strategy.
Traditional Cost Per Acquisition (tCPA). I’ll use Acquisition instead of Conversion here to avoid confusion over use of the CPC acronym. So, this figure is the amount you’re shelling out per acquisition from your “non-social” marketing avenues. You could go ahead and create some sort of a weighted average based on how well specific campaigns perform (e.g., PPC is likely a better lead generator for you than newspaper ads, so it might be wise to show bias towards PPC’s numbers), or if you’re lazy, you could just take your total marketing spend and divide it by your total “acquisitions” for the period. Let’s be lazy, and say you picked up 100 non-social memberships to your website this month with $3,000 of advertising… so your tCPA is $30.
# Of Social Acquisitions (SA). This is simply the total number of social marketing-based acquisitions you brought in for whatever period you’re calculating. Let’s say you brought in 6 memberships through Twitter this month, by tempting half a dozen schmucks to click through on your intriguing blog post links and become members. Well done, chap.
Salary Per Minute (SPM). Here’s the real touchy one, for two reasons:
A) If it’s your salary being calculated, it puts your very existence at the company in question
B) If it ain’t your salary being calculated, good luck finding out what it is.
Nevertheless, the time spent on social networks is a serious part of measuring its value, so you’ve gotta know this. And hey, if you end up liking the way the numbers crunch, it’s a great stat to whip out when you request a raise. Let’s say you make $50k and typically work 50 hours a week (yes, I know you’re up at 2am looking at site stats… I’m sorry to be the one to tell you this, but no one else cares. We’re talking work hours where other people know you’re working). If my math is right, you’re working for about 31 cents per minute. Kinda sad to know phone sex operators make more than you do, isn’t it?
# Of Social Minutes Logged (SML). You’re not tracking this data, I’m sure. Well, start. Whether you have a fixed point during the day when you’re doing your social media thing, or you put a stopwatch next to the computer, figure out a way to log the time you spend on social websites. Let’s say you spent 170 minutes this month on Twitter, which got you those 6 leads we mentioned in the SA metric.
Okay, let’s hit the chalkboard:
Behold, the total marketing dollars you’ve saved this month by using Twitter to get those 6 members instead of your other avenues. And as a very useful bonus, if you haven’t figured it out yet, you can use these metrics to grab the Social Cost Per Acquisition (sCPA) for direct comparison with tCPA – just take the latter half of the equation (the total money spent on all the minutes of your little Twitter antics) and divide it by how many conversions it generated. In this case, a Twitter-based membership costs you $8.78, which is pretty sweet when compared to the $30 tCPA. I’d advise you look at both the total ROI and the sCPA savings, and blab the more impressive one to your boss.
Does the formula take into account the “intangibles” of SMM? Psht, what do I look like, a miracle worker? It is what it is, ladies and gents… I’d recommend that the SMM community actually come up with several formulas to attack different measurements of social media, and not one singular magic number to try to justify the entire strategy… this is just one of those formulas, and obviously doesn’t even approach the issue of all the “friends” and “followers” who never made it to your website. But for what it is, I hope it helps, and I hope you’ll all leave some great ideas below for improving this formula or adding new formulas to help us all quantify social media.
