Monday, February 13, 2012

Lesson #107: Social Media Analytics & ROI

It feels like the Wild West out there in the social media marketing world.  Advertisers are identifying the need to get in front of large social media audiences, like Facebook and Twitter, spending around $5BN a year in advertising on those two sites alone.  And, there are tons of startups out there trying to pitch social media marketing, management and analytics tools.  Which is good, because CMOs are starting to get more pressure from their CEOs and CFOs to clearly show an ROI from their social marketing spend, which has been lacking during the infancy of this channel.  The problem is, with the glut of fragmented solutions in the marketplace, many of which are still learning the business themselves, it can be a daunting task to identify the right technologies to use to optimize your social marketing efforts.

To help me better learn this space, and to get an opinion about the best social media analytics tools in the market today, I engaged the help of my colleague, Joshua Sigler, a Senior Product Specialist at Sprout Social, a Chicago-based leader in social media analytics for SMB's, financially backed by Lightbank (the Groupon founders' venture capital fund).  Joshua did his best to keep his assessment non-biased, and truly educate me on the wide range of solutions available in the market.

To start, I want to summarize what I feel are the various pieces to the social marketing technology puzzle, to ensure whatever strategies and tools you employ, include all of the various components you may need.  This includes technologies to assist with: (i) social content management (e.g., publishing schedules, distribution to all platforms, communications with fans/followers); (ii) content analytics (e.g., retweet/click activity, fan/follower growth, trends over time); (iii) customer sentiment (e.g., are customers happy or angry with your brand/product); (iv) building a social CRM (e.g., identifying brand influencers most passionate and engaged with your product); (v) social commerce (e.g., allowing purchase directly from your Facebook brand page); (vi) campaign management (e.g., buying media on Facebook or Twitter, building creatives, tracking impressions/clicks), and (vii) ROI analytics (e.g., calculating brand awareness, consumer sentiment, e-commerce conversions from your social marketing spend on the inhouse team managing your efforts or the media dollars spent to accelerate growth). 

In addition, it is important you research: (a) how many internal group partitions or team members can access the system; (b) how many separate social media accounts can be managed from your central dashboard; and (c) how these social tools can be used for task management by non-marketing departments (e.g., sales, customer service), to make sure they meet the needs of your specific business.

Right now, many of these technologies are fragmented from many different providers only tackling one piece of the puzzle, and hence, do not tackle the full suite of client needs discussed above.  I expect to see a lot of industry consolidation in this space, as marketers are going to want all pieces of the puzzle aggregated into one easy-to-use social platform.  There are a handful of companies that already provide numerous pieces of the puzzle, and I am going to focus on them below.  But, I haven't found anybody that is doing everything yet, especially in a price point affordable to most startups.

The companies that are most progressed in this space, include companies with affordable solutions focused on SMB's (e.g., HootSuite, TweetDeck, SproutSocial) and companies with very expensive solutions focused on larger enterprise-scale clients (e.g., Radian6, Sysmos, Meltwater, ExactTarget).  I have not personally played with each of the tools, and relied on Joshua to help me assess the plusses and minuses of these various technologies.  So, make sure you kick the tires for yourself, to formulate your own opinions of what will work best for your needs.

In terms of the SMB facing technologies, I would summarize it as follows. TweetDeck (now owned by Twitter) is primarily a platform used to consume and post tweets. It's heavily focused on Twitter and it doesn't incorporate analytics or team functionality like some of the other tools. HootSuite has begun adding business oriented features in the past year, but is generally considered a consumer product, with the vast majority of their 3MM customers using the free version of their software.  SproutSocial offers the largest mix of features for businesses, and even though it only offers a paid version of its platform, it is very affordable for SMBs with functionality on par with many of the enterprise facing solutions, which can be materially more expensive.  As an example, Radian6 has an annual cost starting at $10,000 per year, whereas SproutSocial has full-featured plans starting at around $500 annually.

In terms of the enterprise facing technologies, Radian6 was the first mover in this space, building a large business on 1st generation social monitoring and analytics and was recently acquired by Salesforce.com. The early enterprise tools like Radian6 have a reputation of being confusing to use and lacking audience engagement features.  I did not dig too deeply on Sysmos, Meltwater or Exact Target, since I focused on the affordable solutions for my startup readers, and simply offered up Radian6 as one alternative, if you require more features and functionality.

I am definitely not a pro on these technologies.  So, if you feel that I am missing any important ones, please be sure to add them in the comments field below.  But, it is clear to me, SproutSocial has built a really terrific product for the price point, and is even getting the attention of bigger enterprise clients.  So, be sure to reach out to Joshua at 312-878-3787, if you have any questions from here.

Social media should be a component of any smart marketing plan, and it is critical you efficiently manage and track your efforts with tools like the ones discussed herein.

For future posts, please follow me at:  www.twitter.com/georgedeeb

1 comment:

Andi Steward said...

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