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GROUPE SUP DE CO MONTPELLIER BUSINESS SCHOOL
Graduate School of Management
Member of International Association to Advance Collegiate Schools of Business (AACSB International)
Miembro del Consejo Latino Americano de Escuelas de Administración (CLADEA)
Member of European Foundation for Management Development (EFMD)
Member of European Association for International Education (EAIE)
Member of International Trade & Finance Association (IT&FA)
Membre de l’Association Alexander Von Humboldt
Membre du Pôle Universitaire de Montpellier et du Languedoc-Roussillon
Groupe accrédité AACSB
Groupe membre du projet « Global Compact » des Nations Unies
Titulaire du label Diversité
The opportunities and challenges of social media marketing
How should the effectiveness and impact of social media marketing be measured?
Thèse professionnelle MBA
Programme executive MBA
présentée par
James MEAKIN
Sous la direction
du Professeur Calin GURAU
Octobre 2011

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Table of Contents
1. Acknowledgements.................................................................................................................................4
2. Executive Summary.................................................................................................................................4
3. Introduction ............................................................................................................................................6
4. Methodology...........................................................................................................................................8
4.1. Research Aim & Objectives:...................................................................................................................8
4.2. Research Strategy .................................................................................................................................8
4.3. On-line Survey .......................................................................................................................................8
4.4. Difficulties and limitations ....................................................................................................................8
5. Literature Review....................................................................................................................................9
5.1. Overview ...............................................................................................................................................9
5.2. The social media era ...........................................................................................................................10
5.2.1. The e-commerce era .......................................................................................................................11
5.2.2. The information era ........................................................................................................................11
5.2.3. The Virtual era ................................................................................................................................11
5.3. What is Social Media?.........................................................................................................................11
5.4. Characteristics of Social Media ...........................................................................................................12
5.5. Forms of Social Media.........................................................................................................................13
5.6. Social Media Categories......................................................................................................................14
5.6.1. Social Networking sites...................................................................................................................14
5.6.2. Blogs ...............................................................................................................................................14
5.6.3. Collaborative projects .....................................................................................................................14
5.6.4. Content Communities .....................................................................................................................15
5.7. Social Media & the Media industry .....................................................................................................15
5.8. Social media & ROI measurement.......................................................................................................16
5.9. Social Media metrics ...........................................................................................................................17
5.9.1. Influence .........................................................................................................................................18
5.9.2. Engagement....................................................................................................................................19
5.9.3. Advocacy.........................................................................................................................................20
5.9.4. Sentiment........................................................................................................................................20
5.9.5. Return on Investment .....................................................................................................................21
5.10. Social Media ROI Framework ..............................................................................................................22
6. Discussion and findings .........................................................................................................................26

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6.1. Major Findings ....................................................................................................................................26
6.2. Data Analysis & results........................................................................................................................26
6.2.1. Respondents Profile ........................................................................................................................26
6.2.2. The most popular sites....................................................................................................................28
6.2.3. Social media objectives...................................................................................................................29
6.2.4. Social Media measurements...........................................................................................................29
6.2.4.1. Engagement....................................................................................................................................29
6.2.4.2. Site/blog metrics.............................................................................................................................30
6.2.4.3. Revenue ..........................................................................................................................................31
6.2.4.4. Brand Performance and awareness................................................................................................31
6.2.4.5. Cost Savings ....................................................................................................................................31
6.3. Discussion of results ............................................................................................................................32
6.3.1. The correlation between Social media measurements & ROI.........................................................32
6.3.2. The Difference between value and ROI...........................................................................................33
6.3.3. Objectives & Strategy .....................................................................................................................33
7. Limitations & Further Research .............................................................................................................34
8. Conclusion.............................................................................................................................................34
8.1. Company culture .................................................................................................................................35
8.2. Social Media is not a marketing campaign. It’s long term..................................................................35
8.3. Afterword ............................................................................................................................................36
9. Bibliography ..........................................................................................................................................37
Appendix A ....................................................................................................................................................41
List of Professors: Groupe Sup de Co Montpellier Business School ................................................................45

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1.Acknowledgements
Firstly I would like to thank my supervisor, Professor Calin Gurau, for helping me understand the
importance and necessity of gathering primary data for this research study. There have been
significant changes to my professional career and objectives during the two years of my MBA course;
which has made decisions with regards my subject all the more difficult.
I would also like to thank the Dell social media and communities group in Austin, Texas, for their
openness in answering my emails and phone calls and sharing information. Even if the majority of
the data and information I have received is and remains confidential, it has allowed me to
understand the importance of social media strategy and best practices.
I am also grateful to all the respondents who, in keeping with the spirit of social media, so willingly
responded to my on-line survey.
2.Executive Summary
The objective of this study is to explore social media strategy and to understand what
measurements can be used to monitor and track return on investment (ROI).
The study is conducted using a qualitative approach with the purpose of exploring the opportunities
and challenges of social media. The empirical data of the study is done through an on-line survey as
well with wider reaching surveys from research institutes such as Altimeter and Forrester. Internal
interviews within Dell were also conducted, but due to the confidential nature of the data and
strategies discussed, only publicly available information was used in the report.
In synthesizing the survey results and comparing them against the qualitative research, certain
results become apparent. Social Media has altered the nature of the Marketing Mix. Increasingly,
customers, and not marketing executives, are performing the Four P’s (Product, Price, Promotion,
and place)1
. They are providing companies with product roadmaps, dictating the price and making
public any inconsistencies instantly allowing new companies to enter the market closer to the point
of purchase.
A new generation of employees, the millennial generation, is entering the workforce. With them,
they are bringing new technologies and expectations. Social media is transforming everything we do
and the blur between a people’s personal and professional use of the internet is becoming more and
more obvious.
Ten years ago, success in lead generation campaigns was measured via “sales leads”: the number of
people who requested information from the website, or the number of people who came onto the
booth at a trade show. Public relations were measured by the number of articles in newspapers &
magazines. While these measurements are still somewhat valid, Social Media has opened up a long
1
McCarthy reduced the marketing mix concept to 4 elements in his book “Basic marketing. A Managerial
Approach” in 1960

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list of new types of measurements: buzz, followers, friends, fans, user-initiated views, brand
promoters & detractors etc…
The research I have undertaken proves that measuring the impact of social media is a highly
controversial area, and the subject of great current debate. These new social media metrics are
being used by most companies to prove the value and impact of their social media activities, but
rarely are aligned to ROI goals and objectives. When ROI is ascertained, it is invariably within a
specific social media campaign. The report also shows the importance of creating a framework to
build goals and objectives and that building such frameworks allows for a much better chance of
calculating the return on financial or marketing investment. Indeed, not all social media activities
need to or should have a financial ROI.

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3.Introduction
As a marketing executive as Dell since February 2010, and specifically a brand manager since July
2011, I have witnessed a significant transformation strategy taking place internally. A large portion
of this strategy is to incite all employees to be empowered to use social media as part of their
business interactions.
Dell was ranked the most social brand in 2011 (Headstream, 2011) and is widely considered as one
of the most influential social businesses, but to understand how Dell reached such accolades, it is
necessary to look back at how Dell became socially engaged.
Dell’s direct model has been admired and imitated by business leaders around the world and is
taught in most business schools today. Dell was also a pioneer in the use of internet and e-
commerce. In 1994, Dell.com was launched, followed soon by its first online discussion forum –
years before many of its competitors. Dell.com continued to make rapid strides, and by the end of
1997 was the first company to make $1M in online sales. In 2003, Dell.com became the world’s
largest consumer ecommerce site.
Dell’s social media engagement was essentially born out of its direct model; although it was kick
started into action by a now infamous blog saga "Dell Hell ” (Jarvis, 2005) that gained significant
exposure not only online but also in newspapers and magazines.
In March of 2006, an online support community outreach team was formed to start listening and
monitoring conversations. Three months later, the blog Direct2Dell was launched and in January
2007, Dell’s video and podcast site, StudioDell was launched. In February 2007, IdeaStorm, a site for
customers and other people interested to submit technology and business ideas for Dell was
launched. By 2009, over 10,000 ideas had been posted and 400 product innovations implemented
(Dell, IdeaStorm, 2009).
In June 2007, Dell joined Twitter and in the same year the internal blogs OneDellWay and
EmployeeStorm were inaugurated, as was the investor relations blog, DellShares. By 2009, the
online shop for refurbished PC’s called Dell Outlet had surpassed $3 million in sales on Twitter alone
and in total; Dell’s global reach on Twitter had resulted in more than $6.5 million in revenue (Dell,
Direct2Dell, 2009).
In December 2010, Dell’s Social Media Listening Command Center was launched monitoring an
average of 22,000 posts daily (Dell, Inside Enterprise IT, 2010).
I am one of over 10,000 certified Social Media & Community professionals at Dell that have
completed at least 2 days of social media internal training (Fidelman, 2011).
While Dell’s social media strategy spans virtually every department within the organization,
marketing is obviously at the forefront of this empowerment and it is necessary for me to
understand and embrace the shift that is taking place between traditional “paid” media and the new
“earned” social media.
However, as a “social media” novice, my first interrogation was with regards my ability to measure
and track the use of social media within my campaigns. This in turn brought further questions with
regards understanding and determining whether new social media metrics such as reach,
engagement, influence, sentiment, and brand awareness, can or should be integrated with the
concept of financial return on investment.

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From an internal career perspective, it therefore appeared that the subject was a high priority.
Understanding social media from a business perspective and gaining proficiency with the immense
changes that are taking place in marketing and advertising is, I believe, a solid investment.
More and more theories and models exist to calculate the return on investment for marketing
initiatives. Although this literature review covers certain theories, it is primarily focused on their
application to social media marketing campaigns. The scope of the research includes some general
information regarding the current views on what social media is, how ROI is defined, the use of
metrics, measurements, objectives, and goals as well as considerations for the scope of ROI.
The literature review will be concluded with a section highlighting the major issues that have
emerged regarding calculating ROI for social media marketing.
While this encourages such research, it also requires many theoretical concepts to be understood,
specifically in relation to the psychology of individuals and their desire for social interaction.
The findings of the primary research will then be explained followed by a discussion of the findings in
relation to the literature review. The final chapter will conclude with what the main difficulties
discovered were, whether any best practices were formulated and what further research might be
required.

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4.Methodology
4.1.Research Aim & Objectives:
The aim of this study is to explore and investigate to what extent companies can calculate return on
investment for social media marketing campaigns, understand what is being measured and what is
measurable.
This will be undertaken by:
 Researching existing practices for measurement and return on investment analysis in social
media.
 Highlighting key concepts and best practices in evaluating ROI for social media.
 Discussing the challenges and limitations of calculating ROI in social media marketing.
4.2.Research Strategy
A qualitative analysis of secondary data was chosen as the most appropriate research strategy. As
social media is constantly evolving, and the concept of social media ROI is itself still in its infancy;
very little academic literature is available. A quantitative approach could therefore not address the
ambiguities of a concept that very few companies have yet attempted to implement.
Initially, the approach of the literature review was to understand the conceptual background on
social media basics and business strategy towards social media.
After this academic research, significant analysis from research companies was conducted,
specifically from Forrester Research, eMarketer and Altimeter all of whom are very respected and
been very active in the social media space.
This analytical research was further backed up with data from reputable and carefully selected blogs
and thought leaders, even though the content from these sites can often be based on subjective
opinions and data that can sometimes prove difficult to validate.
Once the conceptual background on social media had been researched, this was then compared with
primary data from an on-line survey and with internal interviews and research at Dell Corporation.
4.3.On-line Survey
A survey (see appendix A) was constructed and posted on various on-line discussion groups that
were directly related to social media ROI and social media marketing. To this extent, the survey was
destined for marketers and executives who were already tackling the issue. The objective of the on-
line survey was to get an understanding of how and if companies were managing the question of
social media measurements and ROI.
4.4.Difficulties and limitations
Firstly, the confidential nature of the information gathered during my interviews with internal
executives at Dell coupled with the legal constraints imposed by Dell meant only publicly available
information could be used.

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With regards the survey, respondents were either UK or US based which could potentially give a
biased result. The sample size of the survey could also be criticized as being too small; however the
results do seem to prove the outcome of the literature review.
Also, while some academic reports, notably “Users of the world, unite! The challenges and
opportunities of Social Media “ (Kaplan & Haenlein, 2010) ” were used in the research; most did not
fully address the specific issue of ROI and only touched upon the challenges of measurement. In
addition, as this subject is evolving so fast, books that are just 18 month old appear out-dated and
often discuss situations that are no longer relevant – for example virtual social worlds such as
Second Life are no longer considered a priority medium for business marketing.
5.Literature Review
5.1.Overview
Gartner (Gartner, 2010) estimates that by 2014, 20% of all business users will rely on social media
rather than email as the primary vehicle for interpersonal communications. Indeed, social
networking has rapidly become a part of our personal lives. With Facebook declaring over 800
million active users and more than 7 million apps and websites linked to its site (Facebook, 2011), it
is undeniable that the social networking phenomena has taken a hold. However, social networking
extends far beyond Facebook and this study will attempt to delve into the fascinating world of this
new era.
One in three marketers indicated that measuring the success of Social Media marketing campaigns is
the second most common question (Stelzner, 2009). In particular, marketers are looking for ways to
measure success, the return on investment, what metrics need to be used and how to measure the
impact. Measuring the impact of Social media on business goals is the second most important
challenge associated with implementing social media strategy (IDC, 2010) (Figure 5-1)
Figure 5-1 : What are the key challenges/concerns associated with using/implementing social software? IDC Social
Business Survey, 2010
0% 10% 20% 30% 40% 50% 60%
IT tries to block / monitor social software use
It does not have the functionality that I require
There is no company policy to guide behavior
It is not integrated with other systems used
Having people monitor what I do
Allowing comments posted openly
It has been subject to security threats
Justifying the investment to management
Finding the time to use another tool
Measuring the impact on business goals
Getting people to participate

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However, in this same survey, measuring revenue was stated as the least used metric to measure
the impact of social media initiatives (Figure 5-2)
Figure 5-2 : What metrics are being used to measure the impact of your social initiatives? IDC Social Business Survey,
2010
Finally, a survey in 2009 representing professionals from a variety of industries reported that 84% do
not measure RO I (Mzinga, 2009) (Figure 5-3)
Figure 5-3: Do you currently measure ROI for your social media programs? Social software in Business survey, Mzinga
and Babson Executive Education, 2009
Social Media is therefore at the top of the priority list of many business & marketing executives
today. However, most executives are still unable to define what social media actually is. A survey of
over 1000 executives in 2010 found that 66.4% said they could not properly define the term; but
99.1% said they knew that Social Media would have a significant effect on them & their businesses.
(Safko, 2010)
5.2. The social media era
While it is beyond the scope of this study to delve into the founding origins of social media, it is
interesting to note how the internet has evolved over the past two decades and it has profoundly
changed the ways we relax, the ways we play, the ways we connect and communicate and the ways
we do business. This evolution can be split into three distinct periods:

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5.2.1. The e-commerce era
In the 1990’s, the Internet era was all about e-commerce and selling products & services directly to
consumers on-line. However, while ecommerce has significantly altered the way in which business is
done, the concept of e-commerce has not been hugely revolutionary. Admittedly, great
technological strides have been made in the form of supply chain management, electronic data
exchange, and inventory management as well as with marketing and web advertising. But
realistically, Ecommerce is generally considered as being just another platform for doing business; an
evolution rather than a revolution.
5.2.2. The information era
In the 2000’s, the Information era was characterized by the ability of individuals to transfer
information freely, and to have instant access to knowledge that would have been difficult to find
previously. This is the “Google” decade (Sullivan, The Google Decade: Search In Review, 2000 To
2009, 2010) where the world’s technological capacity to store information grew from 2.6 exabytes in
1986, to 295 exabytes in 2007 (Hilbert & Lopez, 2011). In more comprehensible terms, this is
equivalent to 4 CD-Roms per person in 1993 to almost 61 CD-Roms per person in 2007.
5.2.3. The Virtual era2
This is the era of social media. Its concept is not particularly innovative and Social Media is in many
respects the outcome of the idealistic beginnings of the internet. It allows us to do what we have
always done – communicate, collaborate, debate and it obviously satisfies our belonging, esteem
and self-actualization needs3
. Customers have always wanted to communicate on the product or
brand they like or hate and people have always wanted to be a part of a network, be it professional,
scholar, political or other. With the rise of the internet & its collaborative capabilities; every day,
hundreds of thousands of conversations about a product, service or brand are taking place on the
internet. Most companies & brands today are not familiar or are afraid of these conversations and
don’t understand the strategic implications of social media.
5.3.What is Social Media?
As this study is all about the internet, it seems logical to quote Wikipedia, one of the best known
Social Media sites: “Social Media refers to the use of web-based and mobile technologies to turn
communication into interactive dialogue” (Wikipedia)
Kaplan and Haenlein (Kaplan & Haenlein, 2010) define social media as a “group of Internet-based
applications that build on the ideological and technological foundations of Web 2.0, and that allow
the creation and exchange of user-generated content”
Social media is therefore bi-directional communication over the internet. This includes: searching for
information, connecting with people, organizations & brands, networking with business colleagues,
finding and sharing interests, recommending and reviewing products, researching and educating and
purchasing.
2
The Virtual Era is a term that has been coin-phrased by Dell
3
Maslow’s hierarchy of needs, A Theory of Human Motivation, 1943

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The growth of Social media has been exponential over the past 4 years. Figure 5-4 shows user
growth rate in the United States in all age ranges and demographics, and the continuing pervasive
ubiquity of social networking into every facet of work, play and life in general:
Figure 5-4: US internet users who use social network sites, 2010, Searchenginejournal.com
The reason for this exponential growth can perhaps be understood better with Metcalfe’s law4
which states that “the value of a network is proportional to the square of the number of connected
user to the network” (Wikipedia). Although written in relation to telecommunications (Ethernet)
networks & connections, it characterizes the rapid rise of social media sites because the ability to
reach and leverage a critical mass of “connections” is rapid and inexpensive (Penn, 2010).
5.4.Characteristics of Social Media
Social Media has a defined set of five characteristics (iCrossing, 2008). These characteristics are also
generally agreed upon within the wider internet community:
Participation: This relates to the ability for users to contribute & to communicate with other
interested parties. This is the single biggest difference between traditional one-to-many media and
Social Media.
Openness: Social media services encourage comments, votes and sharing of information between
users and the barriers to accessing these services are generally very limited.
4
Robert Metcalfe co-invented Ethernet and formulated Metcalfe’s law:
http://en.wikipedia.org/wiki/Metcalfe%27s_law

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Conversation: Rather than the broadcasting of media to an audience, Social Media is about
conversing.
Community: Social media allows for the creation of communities that share common interests
Connected: Most types of social media services are inter-connected and linked to other sites,
resources and people.
5.5.Forms of Social Media
Tightly related to the above mentioned characteristics, there are six different forms of social media
(Kaplan & Haenlein, 2010), based on a defined set of four theories:
 Social presence: This theory determines the relationship between intimacy and the
immediacy of the medium (Short, Williams, & Christie, 1976). Intimacy can either be
interpersonal (eg: face-to-face meeting) or mediated (eg: telephone conversations). The
communications medium can be either asynchronous (eg: email) or synchronous (eg: live
chat)
 Media richness: According to Kaplan and Haenlein, the media richness theory (Daft & Lengel,
1986) is closely related to social presence. It is based on the assumption that the goal of any
communication is the resolution of ambiguity and the reduction of uncertainty.
 Self-presentation: This concept states that individuals wish to control the impressions other
people form of them, with the goal of influencing to make rewards (Goffman, 1959). It also
states that people wish to create an image that is consistent with their personal identity.
 Self-disclosure: This is the conscious or unconscious revelation of personal information and
is what allows individuals to develop relationships.
By combining these theories, the authors were able to classify the different forms of social media
(Figure 5-5). A blog, for example, scores very low with respect to social presence & media richness
as they are essentially text-based and allow for only a relatively simple exchange. However, a blog
has a high level of self-presentation and self-disclosure because a blog is generally focused on a
specific subject.
Social presence/Media richness
Low Medium High
Self-
presentation/
Self-
disclosure
High Blogs
Social Networking
sites
(e.g: Facebook)
Virtual social worlds
(e.g: Second life)
Low
Collaborative
projects
(e.g: Wikipedia)
Content communities
(e.g: YouTube)
Virtual game worlds
(e.g: World of Warcraft)
Figure 5-5: Classification of Social Media by social presence/media richness and self-presentation/self-disclosure (Kaplan
& Haenlein, 2009)

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5.6.Social Media Categories
Social media is evolving very quickly and the research shows that it is difficult to categorize the
different types of social media channels. Below is a summary of the most important social media
sites from a marketing perspective:
5.6.1. Social Networking sites
Social network sites are web-based services that allow individuals to construct a public or semi-
public profile within a bounded system, articulate a list of other users with whom they share a
connection, and view and traverse their list of connections and those made by others within the
system. (Boyd & Ellison , 2007)
These sites allow users to create personal web pages and then connect with others to share
common interests, content and communicate with each other. The two most well-known Social
networks are currently Facebook and Twitter, but there are also business social networks such as
LinkedIn and Plaxo.
5.6.2. Blogs
A blog is the blend of the term “web log”. It is an on-line journal posted in reverse chronological
order where the author can write about any interest he wants. They are the Social Media equivalent
of personal web pages and can come in a multitude of different variations, from personal diaries
describing the author’s life to summaries of all relevant information in one specific content area.
(Kaplan & Haenlein, 2010) The blogger can also use the blog to share content picked up from other
social media by taking advantage of the simple embed codes offered by those content hosts.
There are also other forms of social media sites that can be classified under this umbrella term:
o Internet Forums
A forum, or message board, is an online discussion site. Users can post messages and comment on
other messages.
o Social News Sites
These sites are primarily meant as a source of news and information. Users visit these sites for news
and to exchange useful information. Most of these sites provide users the facility to vote for the
information which according to them was most useful. The links appear on the site based on the
users rating so that most popular news is seen by maximum people. Common social news sites
include Digg & Reddit.
5.6.3. Collaborative projects
Collaborative projects enable the joint and simultaneous creation of content by many end-users and
are, in this sense, probably the most democratic manifestation of user generated content (Kaplan &
Haenlein, 2010). A collaborative project or wiki refers to content created online as a result of
multiple users working on the same content, but at different times and from different places. The
best known wiki is Wikipedia.

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5.6.4. Content Communities
A content community is where users can organize & share particular kinds of content.
There are many different forms of content communities:
 Social bookmarking
Social Bookmarking is a way of managing the bookmarks of the webpages users save on the internet.
Social Bookmarking Sites offer a channel for the users to save the links of the web pages that they
want to use in the future. These bookmarks can be private, public or shared with a limited number
of people. Some of the popular Social Bookmarking Sites are Delicious and Blinklist.
 Photo, Video and presentation sharing
These sites are where people can upload content to share either privately with only selected other
users or publicly. Users can grant permissions for others to use the content by simply embedding the
codes in their blogs.
The most common photo sharing site is Flikr. Slideshare is the market leader for presentation
sharing, while YouTube and Daily Motion are the two mastodons of video sharing
5.7.Social Media & the Media industry
As social media is a form of media, it is necessary to understand its impact of the overall media
industry, particularly as the industry has been turned upside down by Social Media. As Rupert
Murdoch, the CEO of NewsCorp said in 2010: “Technology is shifting the power away from the
editors, the publishers, the establishment, and the media elite. Now it’s the people who are in
control”
Social media can be classified into three distinct media channels (Corcoran, 2009):
- Paid media, which is advertising inserted next to another’s content
- Owned media, which is brand-created content
- Earned media, which is getting someone else to provide content about a brand.
Figure 5-6 below from Forrester research, details the different channels:

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Figure 5-6: Types of media channels, Forrester Research (2009)
Social media starts as owned media but soon turns into earned media. So what was once owned and
controlled, can easily become organic and while the concept of earned media is not new, it has
evolved significantly over the past few years into the transparent and permanent word-of-mouth
that is being created by social media.
Ultimately, this study is oriented towards the measurement of this earned “social” media.
5.8.Social media & ROI measurement
Because social media delivers a broad range of advantages to marketers, Forrester research (Augie,
2010) argues that a similar approach to the balanced scorecard (see section 5.9.5) is necessary to
fully capture the value delivered by social media programs and tools. The report argues that a
balanced social media marketing scorecard should monitor effects across four perspectives that
balance the short term and long term and the directly financial with indirectly financial outcomes.
According to Forrester, a social media scorecard should include four metrics (Figure 5-7):
1) Financial: Has the revenue or profit increased or costs decreased?
2) Digital: Has the company enhanced its owned & digital assets?
3) Brand: Have consumer attitudes about the brand improved?
4) Risk management: Is the company better prepared to note and respond to attacks or
problems that affect reputation.
The report claims that a properly designed social media scorecard should focus on of broad range of
corporate objectives, rather than purely concentrating on the financial aspects.

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Figure 5-7: Four Perspectives of a Social Media Marketing Balanced Scorecard, Forrester research (2010)
The study concludes that as social media is moving out of the experimentation stage and into
mainstream marketing strategies, the way social media is being measured must follow suit and that
the focus on metrics will shift from short term to long term; while not every program will need a
financial ROI in order to prove its benefit.
Altimeter (Owyang, Altimeter, 2010) suggests an ROI pyramid (Figure 5-8) where companies must
first gather raw engagement data from their social media activities and then develop a standardized
way to measure based on business goals. More importantly, he notes that it is vital to provide the
right metrics to the right audience, and such engagement and analytical data should not be destined
to executives.
Figure 5-8: The social media ROI pyramid: Metrics and Roles, Altimeter group, 2010
5.9.Social Media metrics
A seen in the previous paragraph, the business impact of social media programs varies based on who
the data is intended for. Susan Etlinger (Etlinger, 2011) takes this concept further and argues that all

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social media metrics, regardless of whether they are activity based (such as fans, likes, or shares) or
results based (such as sales conversions), should always be mapped to a business goal (Figure 5-9).
Figure 5-9: Tying social media objectives to business objectives, Altimeter group, 2010
According to the research led by Forrester, social media metrics can be classified into 5 main areas
that all interconnected and influence each other:
5.9.1. Influence
The Word of Mouth Marketing Association defines an influencer as a person who has a greater than
average reach or impact through word of mouth in a relevant marketplace (Womma, 2011).
Influence is thus the ability of a person or business to target messages to highly connected and
influential people in the aim of getting them to further propagate the messages in the social network.
This is considered to hold significant value, particularly as both Google and Microsoft Bing claim that
the social authority of a user influences the rank of a link within their search engines (Sullivan,
Search Engine Land, 2010). This means that any link shared in social media is analyzed on how
influential the person sharing it is (How many followers and how many the person is following). The
more influential the person sharing the link, the better value that link gets.
From a measurement perspective, influence is usually presented in the context of attempting to find
out who is engaging with the brand, company, product or service and who should the company be
engaging with. According to the blogger Christopher Koch (Koch, 2011), influence should be
measured using two components based on perception:
- Who we are: Through surveys, both qualitative and quantitative, to find out how the
consumer perceives the company.
- Who we want to be. This is trying to influence consumers to move from the existing
perception of the company to the new one and requires all the key players in the company
to decide how they want the company to influence the market in the future.
However, high popularity does not necessarily imply high influence and vice-versa (Romero, Galuba,
Asur, & Huberman, 2010). Equally, when discussing how to measure influence, Lauren Fisher (Fisher,
2010) states “the problem is that we’ve tried to apply a numerical fix to a human attribute, and that
influence is subjective”.

19. 19
5.9.2. Engagement
In 2007, Brian Haven (Haven, 2007) called “engagement” marketing’s new metric. It was defined as
"the level of involvement, interaction, intimacy, and influence an individual has with a brand.”
However, over time, and with the extreme exposure of sites like Facebook and Twitter, social media
engagement has become a general quantitative metric for determining the level of interaction a user
has with a brand or company – number of followers, comments, fans, members, likes etc..
Still, according to Altimeter’s 2010 Survey of Corporate Social Strategists (Owyang & Li, How
Corporations Should Prioritize Social Business Budgets, 2011), engagement remains the top metric
to evaluate the success of a social media program
(
Figure 5-10)
Figure 5-10: What measurements are most important to evaluating the success of your program? Survey of Corporate
Social Strategists, Altimeter Group, 2010

20. 20
While it is generally agreed that no single engagement metric is a solid indicator of the level of
engagement of customers or of a community, best practice metrics that go beyond straight forward
quantitative measurements are emerging. These include (Naslund, 2010) :
- Evaluating the spark of conversation ignited by a post.
- Determining the number of unique commenters
- Analyzing the length and breadth of threaded discussions
- Measuring passive engagement: time spent pursuing the content
However, as Katie Paine (Paine, 2009) points out, the major issue with an engagement metric is
differentiating between engagement and passion. “People express passion about movies, books,
people, and places on a daily basis, but not all those people are truly engaged in the brand. They
may simply like it, rave about it once, and go onto the next hot thing.”
5.9.3. Advocacy
Advocacy is the “the act or process of advocating or supporting a cause or proposal” (Enyclopedia
Britannica). In relation to social media, this is the measurement of those that are actively
recommending products, services, causes, or brands.
According to the Word of Mouth Marketing Organization (Womma, 2011), there are three stages of
advocacy
- I know you (I am aware of you and I have a favorable perception of you)
- I like you (I bought your product/service and renewed, I like you enough to come back
- I love you (I’m delighted with you and exceeding to refer you)
Advocacy is the stage when all three above are recognized and the consumer/customer will go to
the point of defending you.
According to the Aberdeen group (Zabin, 2009), the 3 most used advocacy metrics are:
- Net Promoter Score (NPS): This is a customer loyalty metric developed by Reichheld in his
article “The One Number You Need to Grow” (Reichfeld, 2003). NPS defines brand advocacy
as “likelihood to recommend” and is calculated by asking customers their likelihood to
recommend on a scale of 1-10. The score is the percentage of respondents likely to
recommend (answering 9 or 10) minus those less likely to recommend (answering 0-6).
- Brand Advocacy Quotient (BAQ): This metric was developed by Nielsen Online (Blackshaw
& Zabin, 2008) and aims to define whether consumers are promoting or redoing brand
advocacy by analyzing consumer generated social media activity and website activity against
survey data.
- MotiveQuest Online Promoter Score (OPS): This is a methodology created by
MotiveQuest (MotiveQuest, 2005) to help businesses measure the effect of their marketing
on consumer advocacy for their brands. It was the first metric based on online word of
mouth to show a correlation between online advocacy and sales, as documented by the
2008 Forrester book Groundswell (Li & Bernoff, 2008). The Online Promoter Score measures
the number of individuals who are advocating (promoting, recommending) their brand and

21. 21
separates these individuals from and other brands that they might like but not advocate. It
also measures the changes in the number of brand advocates over time.
The major difficulty in measuring advocacy is the ability to differentiate between a consumer’s
intent to recommend and the actual act of recommending. (Womma, 2011)
5.9.4. Sentiment
As above
Figure 5-10 shows, sentiment is the second most used metric after engagement and is tightly
correlated to both engagement and advocacy. Social media sentiment is “the measure of emotional
versus cognitive activity demonstrated by an individual when their attention is focused. It is
demonstrated by behaviors that are caused more by emotion than they are caused by logic."
(Carrabis, 2011)
Sentiment is therefore a personal belief or judgment that is not founded on proof or certainty and is
generally measured in terms of positive, neutral or negative sentiment.
The goal of sentiment analysis is to determine the attitude, opinion, emotional state or intended
emotional communication of a speaker or writer. (Rutledge, 2011)
There are several limitations to evaluating online sentiment. In particular, sentiment is subjective, is
dependent on the context and there are differing degrees of sentiment that make it difficult to
gauge. (Kmetz, 2011)
A recent article on measuring brand sentiment (Schweidel, Boudreaux, & Moe, 2011) argues that
companies have little guidance as to how they should interpret the volumes of comments posted
online and that they generally rely on simplified measures such as total volume of comments posted
or the average sentiment expressed across all posted comments. The article suggests that simple
metrics based on an aggregation can be problematic as they ignore the differences between
comments on a specific product or attribute and general brand impressions. Equally, there is little
representativeness with metrics base on aggregation.
Despite the inherent difficulties with measuring the level of sentiment, this is considered an
essential part of a company’s social media strategy and is often used as a research tool to gauge
customer brand sentiment. This monitoring of online conversations is called “listening” and

22. 22
throughout the literature review, the concept of listening is perceived to be a fundamental best
practice. Listening is the process of receiving, constructing meaning from, and responding to spoken
and/or nonverbal messages (International Listening Association, 1996). Listening involves searching
for information and conversations about the company, product, category, competitors and the
industry. From those conversations, the company gains an insight into what people are people
talking about, and how they talk to and about companies and products. By listening, the company
also gains an understanding with regards the opportunities for engagement and how to act on
customer feedback.
A Forrester study commissioned by Dell (Forrester Research, 2011) found that companies that have
implemented listening initiatives are beginning to see impressive business returns as the data
gathered has a high corporate value that can be used to create strategies and programs across all
areas of the organization.
5.9.5. Return on Investment
A common, albeit basic, definition for ROI involves looking at the cost of a marketing campaign
relative to the profit generated. This approach obviously comes from the world of finance rather
than marketing, and as marketing typically involves expenses rather than balance sheet assets, the
strict financial term appears to make no sense. Marketing has therefore generally referred to ROI as
the value achieved from a specific action or campaign.
However, the ultimate purpose of marketing is to generate sales. It is therefore important for
companies to manage their marketing budget as an investment rather than a cost. But if marketing
budgets are considered as an investment, then that investment should logically and ultimately
require a financial return.
This conundrum between financial investment and marketing value has always been a major issue
for marketers when trying to measure the success of their campaigns, but as Sergio Zymann, former
Chief marketing officer for Coca-Cola clearly summarized in his book, The end of Marketing as we
know it, the “sole purpose of marketing is to get more people to buy more of your product, more
often, for more money”. Every strategy and tactical decision should be intended to increase profits.
It is completely reasonable, and highly beneficial, to expect a return on investment for each
incremental marketing dollar spent. (Zyman, 2000)
So, while the idea of measuring the market’s response in terms of sales and profits is not new, the
concept of measuring the return on marketing investment (ROMI) & its actual implementation is
relatively new. The concept of ROMI was first made prominent with the book, Marketing Models
(Lilien, Kotler, & Moorthy, 1992), in which they defined ROMI as:
ROMI = Incremental revenue attributable to marketing x Contribution margin – Marketing spending
Marketing spending
Another method that has been used by marketers in recent years is the balanced scorecard, which
was first made popular by Kaplan and Norton through an article in the January 1992 edition of the
Harvard Business Review, and subsequently in 1996 in their book, the balanced scorecard. (KAPLAN
& NORTON, 1996)

23. 23
A Balanced Scorecard monitors the performance of all or part of an organization, towards strategic
goals. It uses financial and non-financial performance measures to highlight areas where the
organization is failing to do what is required or was expected. In its basic form, performance metrics
are divided into four areas: Customer perspective, internal business perspective, innovation and
learning perspective and the financial perspective.
The advantage of the balanced scorecard method is that the both financial and non-financial metrics
are incorporated, as are both long-term and short-term goals.
5.10. Social Media ROI Framework
According to an Altimeter (Owyang, Survey of Corporate Social Strategists, 2010) survey in
November 2010, respondents indicated their top internal objective for 2011 is to “Create ROI
Measurements”.
Figure 5-11: What internal social strategy objectives will you focus on most in 2011? Survey of Corporate Social
Strategists, Altimter Group, 2010
Marketers are being held more accountable for delivering positive, measurable results that align
with business performance. In the 2009 Marketing ROI and Measurement study (Lenskold Group,
2009), two-thirds of marketers said their hierarchy is making greater demands to show ROI as a
means to secure budget. And 80% of marketers indicated a greater need to measure, analyze, and
report marketing effectiveness over the prior year.
In the 2010 Argyle Executive Forum and Aprimo joint survey (Aprimo, 2010), 27% of marketing
directors indicated that ROI/accountability requirements are driving the highest degree of change to
their marketing strategies. And 39% said the ability to correlate marketing activities to revenues is
what is “most broken” in marketing.
In order to clearly articulate the strategic business value of social media, Susan Etlinger from
Altimeter (Etlinger, 2011) has developed a social media measurement framework (Figure 5-12)

24. 24
Figure 5-12: Social media measurement framework, Altimeter Group, 2010
The first step is to set measurable objectives that are aligned with one or more business outcomes.
These outcomes include corporate priorities such as brand health, product objectives such as
innovation, efficiency objectives to reduce expenses, revenue generation, optimization of marketing
programs, and improving customer relationships. Don Bartholomew (Bartholomew, Social Media
ROI, 2009) takes this a step further and argues that in order to demonstrate ROI in social media it is
necessary to link these objectives with the relevant business processes they are addressing and that
understanding which business processes are being impacted by social networks is fundamental to
understanding ROI. For example, a program aimed at employee engagement could be linked to
employee retention, turnover or recruitment business processes.
The next step of the framework is to determine how success will be measured, based on the initial
objectives. These metrics fall into one of the 5 previously mentioned types of measurement –
engagement, influence, advocacy, sentiment or return on investment.
Don Bartholomew in his blog about Social Media measurement (Bartholomew, A 30,000-Foot View
of Social Media Measurement, 2009) takes a slightly different approach to the framework and
suggests that there are two additional areas that need to be taken into consideration in addition to
pure social network measurements. Bartholomew (Figure 5-13) argues that that there should be an
initial analysis of the websites the company or brand controls which is measured primarily by web
analytics. In the center are the actual social media measurements, and the third area represents all
the offline transactions that occur as a potential consequence of the social online interaction; such
as a consumer visiting a shop, attending an event, or purchasing a product. He suggests that the use
of primary audience research is necessary to address these post-social media metrics.
Figure 5-13: The three primary areas for social media measurement, MetricsMan, 2009
In Susan Etlinger’s ROI framework (Etlinger, 2011), the third step is to evaluate how ready the
company is to be in a position to measure social media. The report suggests that this is often an

25. 25
overlooked step but that it is a critical element that requires sufficiently trained staff. Jeremiah
Owyang (Owyang, Social Business Forecast: 2011 The Year of Integration, 2010) has defined 5 social
business organizational models (Figure 5-14)
Figure 5-14: Companies organize for social in 5 ways, Altimeter Group, 2010
The centralized approach is where one department controls all the efforts. This has the advantage of
maintaining consistency but can appear to be unauthentic. According to the Altimeter research,
almost 30% of social businesses are organized in this centralized approach.
The distributed or decentralized approach, allows for strong organic growth of social media within
the business, remains authentic; but is considered too experimental and uncoordinated.
The coordinated or hub and spoke approach is where one cross functional team sets rules and
procedures (often the marketing or corporate communications department), leaving the
independent business units to undertake their own efforts. This approach allows social media
practices to spread widely across the organization, but takes time to be effective. According to
Altimeter, 41% of social businesses are composed in this way.
The multiple hub and spoke or dandelion approach is very similar to the coordinated system, but
allows different brands or units within the enterprise to develop their own social media practices. It
is particularly suited to multinational companies or within companies that manage multiple brands.
Finally, the holistic or honeycomb approach is where each employee is empowered to use social
media safely and consistently across the organization. According to the research only 1.4% of
companies, including Dell and Zappos, have reached this level of social media integration within the
company.
The final step of the Altimeter ROI framework is with regards the choice of a social media monitoring
tool to best support the initial business objectives, metrics and the organization structure. The
market for social media monitoring vendors is still very immature and many vendors exist; and their
assessment is beyond the scope of this research study.

26. 26
6.Discussion and findings
It is obvious from both the literature review and from the primary data gathered that the question of
social media measurement and ROI is very significant topic that has not yet been fully integrated or
understood by the general business community.
In its most basic form, the question is not being formulated correctly, and is inherently too broad of
a question.
The question of ROI often comes up either because a company is either inquiring as to whether it is
worth investing in social media or is debating on whether more investment should take place with
social media in lieu of another marketing activity. In other words, ROI is generally the question that
comes up when a company has not yet clearly defined its social media strategy, goals and objectives.
6.1.Major Findings
It is clear from the literature review and from the on-line survey that there is a blur between the
marketing return on investment and the financial return on investment. The value of social media in
most organizations is still quantitative and defined in terms of “awareness” or “engagement” and
other soft metrics making it extremely difficult to attribute a direct relationship to ROI.
6.2.Data Analysis & results
In total, 72 responses were received to the on-line survey. While obviously a very small sample, it
was destined for people already engaged in social media and this was confirmed in the initial profile
questions. To this extent, the qualitative nature of the survey, I believe, gives results which are true
to the current situation of social media measurement in businesses active in the social media space.
6.2.1. Respondents Profile
In order to understand the profile of the respondents and verify that they were indeed using social
media, four questions were asked.
As can be seen from Figure 6-1, 78% of respondents were from small and medium size companies.

27. 27
Figure 6-1: What is the size of your company?
While knowledge of the actual industry was not necessary for the ultimate aim of the survey, it was
important to confirm that respondents were not just marketing consumer products, as this could
have potentially made answers to further questions much more biased. Figure 6-2 shows an equal
mix of business & consumer social media marketing activities.
Figure 6-2: Are you in the B2B or consumer space (in relation to your social media activities)?
When asked where the respondent’s target audience was based, the results were fairly homogenous
with 56% being national or regional and 44% being international or global.
0% 10% 20% 30% 40% 50%
Less than 50 employees
Between 50 and 500 employees
Between 500 and 3000 employees
Between 3,000 and 10,000 employees
Greater than 10,000 employees
44%
33%
22%
Consumer products/services
B2B products/services
Both

28. 28
Figure 6-3: Where is your target audience principally based?
Finally, the last three questions were aimed at verifying that the respondents were actively using
social media within their marketing activities. When asked how long their company had been using
social media, 44% said a few months and 56% a few years, thus confirming the validity of the sample.
When asked if their company had staff members dedicated to social media, 89% said yes, a
somewhat surprising score given the high percentage of small and medium sized companies in the
sample. When asked to characterize the adoption of social media within their company; as
Figure 6-4 depicts, all respondents claimed adoption to be moderate or high, suggesting that most
companies were organized as hub and spoke or centralized businesses (see Figure 5-14).
12%
44%
34%
10%
Regional (part of a country)
National
International
Global
33%
67%
Strong: Our employees are actively incited to
use use Social media to collaborate internally &
externally
Moderate: Our company has attempted to
promote the use of social media, but there’s
been limited uptake
Weak: Our company has banned, restricted, or
discouraged on-the-job employee use of social
media technologies

29. 29
Figure 6-4: How would you characterize the adoption of social media within your company?
Based on the findings from these preliminary questions, it can be asserted that the sample
corresponds to the objective of the survey as all respondents are actively engaged in social media
activities and there is a homogenous selection of consumer and business- to-business companies.
6.2.2. The most popular sites
The objective of this question (Figure 6-5) was to simply verify where the respondents were
investing their time and money. It is no surprise that Facebook, Twitter, LinkedIn as well as blogs and
forums were the most prominent sites as this is where the bulk of users are concentrated.
However, almost 25% of respondents claim that they are using geo-location marketing tactics – this
is the process of marketing to users once the actual physical location of the user has been obtained.
Figure 6-5: What social media sites is your company most active on?
33%
67%
Strong: Our employees are actively incited to
use use Social media to collaborate internally &
externally
Moderate: Our company has attempted to
promote the use of social media, but there’s
been limited uptake
Weak: Our company has banned, restricted, or
discouraged on-the-job employee use of social
media technologies
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Social networking (eg: Facebook, Myspace)
Professional networking (eg: LinkedIn)
Micro blogs (eg: Twitter)
Blogs (eg: blogger, wordpress..)
Forums
Social Bookmarking (eg: Del.ic.ous, blinklist)
Photosharing (eg: Flikr)
Video sharing (eg: Youtube, Dailymotion)
Geolocalization
Presentation sharing (eg: slideshare)
Social News sites (eg: Digg & Reddit)
None of the above
Other

30. 30
6.2.3. Social media objectives
The next set of questions was aimed at understanding which social media objectives were of the
highest priority.
Figure 6-6: What do you consider to be your principal social media objectives?
As can be seen from Figure 6-6, brand awareness, increasing site traffic and the size of the
company’s on-line community were the most important objectives. These objectives can be
considered as being related to measuring the level of engagement.
The two objectives that are the most directly related to a financial return on investment (Driving
transactions and generating leads) all scored fairly low and were perceived as being secondary to the
engagement objectives previously cited.
6.2.4. Social Media measurements
As discussed during the literature review, social media objectives are directly correlated to the type
of metrics that need to be measured.
The questionnaire was divided into a series of measurement questions on:
- Engagement
- Site/Blog metrics
- Revenue
- Brand awareness
- Cost savings
6.2.4.1. Engagement
The level of engagement is visibly the most important measurement tool (Figure 6-7), as all
respondents claimed to measure at least 3 of the metrics. Almost 90% of respondents claim to
measure comments posted by their members, while over 75% of respondents measure the number
of members in their communities and the number of posts or threads.
0% 20% 40% 60% 80% 100%
Brand Awareness
Greater exposure, Increase in traffic
Lead generation
Drive transactions
Increase size of a community
Product feedback
Employee feedback
Customer retention
Extremely important
Moderately important
Not very important
Not at all important

31. 31
Only a small percentage of respondent’s measure referrals and active profiles, and this was confined
only to the larger companies with an international outreach.
Figure 6-7: What are you measuring - ENGAGEMENT?
6.2.4.2. Site/blog metrics
Site or blog metrics, which can also be classified mostly as the measurement of engagement, were
the next most important measurement tool (Figure 6-8), with page views and unique visitors being
the most used. All respondents measured at least one of the metrics.
Figure 6-8: What are you measuring – SITE/BLOG METRICS?
6.2.4.3. Revenue
Almost 25% of respondents didn’t measure any form of revenue metric and only 55% were
measuring the generation of new leads from their social media campaigns (Figure 6-9)
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Members
Posts/threads
Comments, ideas or trackbacks
Inbound links
Tags, votes, bookmarks
Active profiles
Referrals
Post frequency/density
We don't measure engagement
Other
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Unique visitors
Cost per unique visitor
Page views
Visits
Return visits
Interaction rate
Time spent on site
Video installs
Relevant action taken
Site relevance
Conversation size
Author credibility
We don't mesure site metrics
Other

32. 32
Figure 6-9: What are you measuring - REVENUE?
6.2.4.4. Brand Performance and awareness
Brand awareness is a key metric according to the respondents as 100% are measuring brand
sentiment. This is percentage of users who speak positively about your product, brand or company
in relation to the number of negative mentions. Out of all 40 metrics proposed in the survey, this
was the only metric that all respondents said they were measuring.
Figure 6-10: What are you measuring - BRAND PERFORMANCE?
6.2.4.5. Cost Savings
Visibly, the concept of measuring cost savings (Figure 6-11) is not important as close to 90% claimed
to not measure any form of cost saving. Such metrics come into play, for example, when a company
is using social media as a recruitment tool, for generating new product ideas or for resolving support
issues.
0% 10% 20% 30% 40% 50% 60%
Speed of sales cycle
Repeat business
Customer retention
Transaction value
New leads
Cost per lead
Incremental revenue
We don't measure revenue
Other
0% 20% 40% 60% 80% 100% 120%
Brand Sentiment: positive mentions vs negative
mentions
Brand Share of voice : how much your company is
discussed compared to competitors
Brand loyalty/affinity
Media placements
Interaction with content
Other

33. 33
The results are somewhat surprising given the importance of measuring brand awareness – a
negative mention often being in relation to a support or product issue.
Figure 6-11: What are you measuring - COST SAVINGS?
6.3.Discussion of results
The results of the survey show that most companies are still “stuck” in the measurement of
customer and brand engagement. The number of Twitter “followers” or Facebook “likes” remains to
be the principal metric in an attempt to prove the return on marketing investment.
While social networks have the ability to create value through customer engagement and
community building, the ROI of such activities can only be measured by their ultimate impact on
downstream revenue or cost saving metrics like sales, employee retention and customer
loyalty/repeat purchase.
6.3.1. The correlation between Social media measurements & ROI
One of the most interesting findings is the difficulty of linking social media measurements to actual
ROI and business objectives. As Olivier Blanchard points out: “Only measuring social media metrics,
as if in a vacuum, leads absolutely nowhere”. It is only by establishing a relationship between social
media metrics and business metrics that a company will be able to gauge both the impact and value
of social media. (Blanchard, 2011)
Indeed, many of the well-intentioned but misguided attempts to rename or reinvent what ROI
means in social media such as return on influence and return on engagement, seem to be the result
of an inability to distinguish value creation from ROI. These new social media metrics do have a
purpose and deliver value to the conversation as they show how a company’s social media strategy
is progressing and whether or not its social community is engaged. While this is directional for
marketing, it is important to recognize that they are not important to business executives who are
looking for monetary measurements.
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Issue resolution time
% of issues resolved
Account turnover
Employee turnover
Hiring/recruiting
Training costs
New product ideas
Development cycle times
We don't measure cost saving metrics
Other

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6.3.2. The Difference between value and ROI
While it is clear from the survey and the research that most companies are measuring engagement
and have rarely successfully linked those metrics to ROI, it is worth noting that Social media
programs create value and in some cases generate demonstrable ROI. ROI is a form of value, but not
all value takes the form of ROI.
ROI is a financial metric – percentage of dollars returned for a given investment or cost. ROI is
transactional and lives on the income statement in business terms.
Value is created when people become aware of a product or brand, engage with its content or brand,
are influenced by this engagement, and take some action like recommending to a friend or buying a
product or service. Value creation occurs over time, not at a point in time and that value lives on the
balance sheet.
From a sales process perspective, the ultimate value of a social media program may be in increasing
the number of people who are likely to buy a company’s products and services. Other social media
programs may be designed to improve or protect corporate reputation or to build and enhance
brands. Much of this value is intangible; in other words it is balance sheet “goodwill” that becomes
tangible at the point in time a transaction occurs. When buying decisions happen, a company’s
investments in marketing, brand and reputation work together. They become tangible and ROI
becomes measureable.
6.3.3. Objectives & Strategy
The literature review clearly shows that it is absolutely vital that a company builds a comprehensive
strategy. A company has to embark on a 5-stage journey with social media. That journey starts with
a listening strategy and it is only when this listening strategy is well embedded in the company’s
culture that you can start engaging and finally measuring your activities (Huba, The Social
Engagement Journey: How Companies are Transformed By Social Media , 2010)
Dell reached that stage in 2007 after 2 years of experimenting with social media, and began to
formally organize its social engagement with a baseline framework for measuring social engagement.
(Huba, Dell’s Social Engagement Journey , 2010)
Even if in its very early stages from an academic perspective, the literature review clearly shows that
there is agreement on the importance of building a social media framework with clearly defined
objectives, and the need to build a social media culture throughout the organization.
Companies that attempt to respond to social media like they did 10 years ago when it was necessary
“to have a website” will likely fail in this new virtual era. Companies need to work towards the long
term goal of a holistic organizational model where all employees are empowered to use social media.
However, 49% of US businesses still prohibit the use of social media in the workplace in 2011; even if
this is a significant change to the same report in 2009 where 81% of companies prohibited its use.
(Robert Half Technology, 2011).

35. 35
7.Limitations & Further Research
Geo-location marketing, which as the survey proves, is a rising phenomenon that has not been
addressed in this report due to the lack of data and analysis on the subject.
The concept of internal social media is equally a subject that has not been addressed in this report as
its relationship to social media measurement and ROI is still extremely subjective. Dell has embraced
internal social media tools and as Michael Dell explains: ““We spend a tremendous amount of time
communicating. We have to talk in real-time…because we’re in a real-time business. A sense of
urgency about communicating and solving problems is imperative.” Internal social media has
significant business benefits with regards collaboration and sharing, listening, the speed and quality
of problem solving, innovation and efficiencies in its ability to collapse corporate hierarchies.
Internal social media, in my opinion, is certainly a subject for further research.
Finally, the focus of this document has been on measuring the results of social media marketing. Of
course, social media tools and strategies can be used to meet a wide range of business needs,
including customer service, product development, research, and enterprise efficiency, and these
efforts may be measured in ways other than those conveyed in this report. This report is written for
and about social media marketers doing social media marketing.
8.Conclusion
While it’s possible to measure just about any aspect of marketing, it is impossible (and possibly
unwise) to measure everything in marketing. This is why marketers must prioritize when to measure,
based on what needs to be measured and how the measurement will be used relative to the
resources (budget and staff) required. It is more important to periodically capture potentially high-
impact insights than to frequently measure less important outcomes simply for reporting purposes.
But the temptation, particularly for socially engaged global corporations such as Dell, is to measure
everything. Dell’s monthly internal social media insights report contains over 60 pages and as many
graphs.5
Such is the need for new measurement standards, the three most influential advertising associations
in the United States (ANA -Association of National Advertisers, IAB -Interactive Advertising Bureau,
and 4A’s - American Association of Advertising Agencies) recently collaborated on the creation of a
new set of measurement principals specifically for digital marketing and advertising (IAB, 2011).
Equally, in Europe, the “Barcelona principals” have succeeded in building guidance on measurement
and evaluation that specifies the importance of goal setting and on measuring outcomes rather than
results. (Institute for Public relations, 2010). As Jane Wilson from the UK Chartered Institute of
Public Relations (Wilson, 2011) explains “measurement should not just be about tracking, or trying to
understand how influential any particular commentator or participant is. It is about identifying what
conversations the organization should participate in and understanding how engagement can help
an organization meet its objectives”.
The research has revealed that to effectively measure social media marketing and evaluate its
potential ROI, organizations must incorporate social media into its culture; and understand that it is
5
Dell’s monthly brand insights report is an internal report that gives a detailed analysis of social media
engagement, sentiment, and competitive data on all aspects of Dell’s business.

36. 36
a long term strategy that requires long term goals and objectives, which in turn means that the
return on investment from social media should not always have an immediate financial link.
8.1.Company culture
Social Media is not just another marketing channel. It incorporates Public relations, customer service,
human resources, Information technology, loyalty building, collaboration, networking, thought
leadership, as well as front line sales and customer acquisition. It touches nearly every facet of the
enterprise and it is imperative for it to be an integral part of a company’s strategy. Generations of
executives have successfully managed companies & their products without actually talking with their
customers, but increasingly; it is the customer who chooses the media in which to communicate
with a company. Internet-born companies obviously have an easier time communicating on-line with
their customers than traditional “brick-and-mortar” companies; so it is obvious that company
culture plays a huge role in Social Media strategy.
Equally, traditional marketing tactics are becoming less and less effective and consumers tend to
trust and are more influenced by peers, friends and even strangers on-line. Indeed, a 2009 Nielson
report (Nielson, July 2009) shows that 78% of customers trust peer recommendations, while only 14%
trust advertisements. Customers are no longer taking their lead from what they see on TV or read
about in a print ad, but rather what their friends or social connections have to say about that
product or company.
The structural implications for organizations are profound. Companies now face the dual task of
empowering employees to engage with customers as well as influencers through social media. At
the same time, businesses have to put governance strategies and policies in place to mitigate the
risk involved with the “openness” of the internet.
8.2.Social Media is not a marketing campaign. It’s long term
Traditional marketing campaigns start and stop, which creates fluctuations in customer attraction
and retention. Campaigns that involve social media build sustained, ongoing relationships with
customers. Today’s customers are asking brands to engage them more directly, more often, and
more deeply. Customers also want more benefits, value and relevancy that come from two-way
communication. As a result, customers are rewarding brands with greater loyalty and advocacy.
Traditional marketing metrics with narrowly defined ROI tend to lead to social media campaigns that
maximize short-term benefits for the brand without worrying too much about customer motivations
and the long term. However, many marketing investments are not intended to furnish immediate
financial results but instead aim at creating long term brand value.
Indeed, while in every economic environment, high returns are the ultimate objective, there is a
difference between the concept of “returns on investment” and the metric known as “ROI”.
“Returns” are conceptual – they’re a reasonable, qualitative assessment of whether the cost of an
investment or innovation is worth it. ROI, on the other hand, is a financial spreadsheet number that
implicitly relies on existing market information – and, as such, is poor at assessing disruptive
innovations such as social media.
As such, social media helps by building lasting relationships with customers but it needs strategies
and metrics specific to those long term objectives. Brands that have adapted to this new playing field
increase customer satisfaction while creating an ever-expanding platform for building relationships,
improving sales and creating long-term loyalty and influence.

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8.3.Afterword
The research I have undertaken has been fascinating and has allowed me to understand just how
revolutionary social media is for marketing and how important it is to embrace the technology.
Social media marketing is still in its infancy, as are the tools and software used to measure, track and
interpret the huge quantities of unstructured data that exists on social networks about brands or
products.
However, it is exciting to see that the collaborative environment of social media itself is helping the
marketing industry advance through sharing best practices, developing standardization and working
towards meaningful measurements strategies.

38. 38
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Appendix A
An online version of the survey can be viewed here:
https://docs.google.com/spreadsheet/viewform?hl=en_US&pli=1&formkey=dEJaMnpjLWV
Sa2dOSWM2ZXBQT01FWVE6MQ#gid=0

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44. 44

45. 45

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List of Professors: Groupe Sup de Co Montpellier Business School
Oct 2010 / Oct 2011
DEPARTEMENT
Enseignement & Recherche
Droit, Comptabilité, Contrôle, Finance
DEPARTEMENT
Enseignement & Recherche
Management des organisations
ANDRIEU Guillaume BAULAND Matthias
BAGNERIS Jean Charles BOURDIL Maryline
BECQUE Philippe CABROL Mathieu
BESSIEUX-OLLIER Corinne CHAMARD Marie-Dominique
DE PINS Gilles CHOMETON Pierre
DUBOIS Yves DACHS Roland
GIVRY Philippe DE CRECY Renaud
HILLARD Thi Hong Van DUFOUR Lucas
ICKOWICZ Roland FERRAN Benjamin
JOURDAN Didier GERAUDEL Mickaël
LOUBET Guylaine GHERRA Sandrine
PAILHE Reine GUNDOLF Katherine
PERRET DU CRAY Eric GUYOTTOT Olivier
PUECH Didier JAECK Mélanie
RAYMOND Jacques JAOUEN Annabelle
ROSTAN Pierre LASCH Frank
ROUBAUD David LEROY Fréderic
ROUX-GUILLEMAIN Monique LORANG Joseph
SENTIS Patrick MARLIER Catherine
SCHNEIDER Valérie MARTIN Paul
VEDEL Benjamin MEYER Maryline
DEPARTEMENT
Enseignement & Recherche
Marketing
MISSONIER Audrey
NAKARA Walid
BISIOU Sengmanichanh ROBERT Frank
BOSQUE OLIVA Alexandre ROBERT Marc
CHAIZE MAHE Annie RIVIERE Lionel
DANA Léo-Paul SCHOETTL Jean Marc
DUMAZER Christophe WEBER Mélanie
GURAU Calin DEPARTEMENT
Enseignement & Recherche
Technologie Innovation ManagementHANNIN Hervé
JOLY Cédrine GIULIANI Philippe
LAPORTE Jean Yves BARLETTE Yves
LE BELLAC Agnès BELBALY Nassim
MAHE Patrick BENBYA Hind
MATTEOLI Vincent KHEDHAOURIA Anis
MERDJI Mhamed VAN ALSTYNE Marshall
PASCUAL ESPUNY Céline
PECH Catherine
ROBERT Anne-Sophie
THERY François-Xavier
VILLEMUS Philippe
VILLANOVE Denis

47. 47
Groupe Sup de Co Montpellier Business School
Programme executive MBA
Thèse Professionnelle MBA
Auteur
Nom : MEAKIN
Prénom : James
Date : 31/10/2011
Titre, sous-titre
The Challenges and Opportunities of Social media marketing
How should the effectiveness and impact of social media marketing be measured?
Résumé
The objective of this study is to explore social media strategy and to understand what measurements
can be used to monitor and track return on investment (ROI).
The results of the research show that Social Media has altered the nature of the Marketing Mix.
Increasingly, customers, and not marketing executives, are performing the Four P’s (Product, Price,
Promotion, and place). They are providing companies with product roadmaps, dictating the price and
making public any inconsistencies instantly allowing new companies to enter the market closer to the
point of purchase.
Social Media has opened up a long list of new types of measurements: buzz, followers, friends, fans,
user-initiated views, brand promoters & detractors etc…. These new social media metrics are being
used by most companies to prove the value and impact of their social media activities, but rarely are
aligned to ROI goals and objectives.
The report also shows the importance of creating a framework to build goals and objectives and that
building such frameworks allows for a much better chance of calculating the return on financial or
marketing investment. Indeed, not all social media activities need to or should have a financial ROI.
Mots-clefs
Social media, marketing, ROI, engagement, influence, sentiment, metrics, measurement, Dell,
ROMI