Social media still struggles with ways to properly measure an ROI. Many people feel you have to go with your gut but you really just have to put in the research.
Here are 3 scientific studies to shed some insight on social media marketing:
1. Sales and Facebook, Only the Interactions Matter: A team of three professors worked together with a small Asian retailer to investigate how Facebook influenced sales. And this was a case study if ever there was one, because the data they had to work with was phenomenal:
- A database of 14,000 customers, including, get this, actual sales data
- Facebook API data
- Collaboration with the Facebook Data Science Team
The end result was definitive. On average, if you joined the Facebook Page, you spent about $22 extra on the company. More importantly, the difference was entirely explained not by the simple act of joining the page, but by the interactions that took place on the page. Needless to say, these results demonstrate that the real world can be a convoluted and unexpected place, but we can shorten this down to a relatively small list of takeaways:
- If you can do only one thing on Facebook, encourage information rich interactions between your users, both direct and indirect.
- If you can do two things, interact with users directly, and stay positive when you do.
- Recognize that while positive, indirect interactions have the strongest influence on sales, all information rich interactions help improve sales, and both direct and indirect interactions play crucial roles for different reasons.
2. Viral Marketing? Yeah, About That… The study is called “The structural virality of online diffusion,” a team effort by Microsoft Research and Stanford University, led by Sharad Goel. In this study, they analyzed events as they spread through Twitter, in an effort to understand how and why topics start trending on the platform. They looked at roughly one billion events as they cascaded through Twitter. And we all know how this works, right? The most popular tweets get shared with friends of friends of friends. It’s that six degrees of separation thing, right?
True, they did find that the most popular events on Twitter were in fact more viral that they average Tweet. But the correlation between virality and popularity was surprisingly low: 36 percent. It’s impossible to predict how viral a piece of content is based on how popular it is, and even the most viral events could see audiences of just a few hundred. More importantly, the team of researchers didn’t find a single example of a “supercritical diffusion process.” In other words, after looking at a billion events on Twitter, they didn’t find a single case where, on average, one person would “infect” more than one other person.
Instead, we need to focus on retention. If you want to grow, you need to stop thinking about producing content “worth sharing,” and start thinking about how to produce content worth coming back for.
3. Earned Media: Traditional vs. Social: “Earned media” has become a bit of a buzzword in the internet marketing community lately, but it’s easy to forget that earned media existed long before the internet in the form of media coverage. This study looked at both. The researchers looked at 14 months of data about a microlending marketplace:
- Once again, yes, they looked at actual daily sales data
- Kiva is a nonprofit, and they didn’t use any paid media, so there were no paid campaigns to interfere with the analysis
- Data on coverage in newspapers, magazines, television, radio, blogs, and discussion forum posts
- “Blog” content published by traditional media organizations, like newspapers, were considered “traditional” media
- They used Google Trends as a control measure, to make sure that they were measuring the impact of media coverage, rather than the impact of demand for information about Kiva and microfinance
- They also controlled for the holidays and owned blog content and press releases
Again, as you can see, we’re looking at meaningful outcome metrics (sales) and we’re looking at seasoned professionals who know how to avoid conflating cause and effect.
They found that all three main types of earned media significantly impacted sales:
- Traditional earned media events earned them about 894 new sales and 403 repeat sales
- Each blog post earned them about 90 new sales and 63 repeat sales
- Each community forum post earned them about 99 new sales and 48 repeat sales
After digging deeper into the data, however, they found some surprising revelations:
- If you look at percent changes in community posting, this influenced sales 30 times more than percent changes in traditional media coverage.
- Using the same approach, changes in blog posting frequency influenced sales 3 times more than changes in traditional media coverage.
- Blog posts had an influence on traditional media coverage
- Community posts had an even stronger influence on blog posts
In other words, it would be extremely foolish to assume that the traditional media coverage was more important than the community activity. In reality, sales were being primarily driven by community activity, reflecting what we learned in the first study above. Just as importantly, blog and traditional media coverage were being driven, in part, by community activity.
It is kind of crazy that forums are not be used more with online businesses than blogs. Forums are a great way to interact almost in real time with your network, which can be very beneficial when solving their problems and bringing in more sales.
Do you agree with the data from the scientific studies above?