Avoid these 4 Common Social Media Measurement Traps

Only seven percent say their organizations “understand the exact value at stake from digital.” Meanwhile, according to a Gallup survey, 62 percent of U.S. adults who use social media say these sites have no influence on their purchasing decisions and only five percent say they have a great deal of influence.

In business, we currently talk too much about social media and expect too little. In fact, A Forrester study found that posts from top brands on Twitter and Facebook reach just two percent of their followers (note: that’s followers, not new customers) and only 0.07 percent of those followers actually interact with those posts. And, as others have noted, people are more likely to complete a Navy Seal training program or climb Mount Everest than click on a banner ad.

Technology changes fast — remember MySpace and Friendster? — but consumer behavior changes more slowly. As a result, people tend to overhype new technologies and misallocate resources, especially marketers. With new media, therefore, great expectations are common and missing the goal is understandable: it takes practice and learning. But changing or dismantling the goal posts is a different story.

What follows are the four digital measurement traps that every business should be aware of before putting resources into a potentially sinking ship:

1. Leaving the ROI Behind: It’s now common to say that social media is “really” about awareness, not sales. Companies that “get” social media should be “relentless givers [who] connect instead of promote.”In fact, forget “traditional” ROI; focus on consumer use of social media and, instead of calculating the returns in terms of customer response, measure the number of visits with that social media application. How convenient: to be evaluated with a metric without tangible marketplace outcomes. But it’s wrong, a circular argument, and smart companies should not follow this flawed business logic.
2. Advertising For the Sake of Advertising: The value of any advertising, online or offline, ultimately depends on what effects it has on purchases. As Bill Bernbach, David Ogilvy, and other ad execs have emphasized, “our job is to sell our clients’ merchandise, not ourselves.” Those effects are difficult to measure, because consumers buy (or not) for many different reasons and even good ads in the right media have both carryover and wear-out effects that vary over the product life cycle and an ad campaign. But to justify an investment by activity and not outcomes is a tautology — we advertise because we advertise — not a meaningful business argument.
3. Assuming Your Ad is Viewable: Even an activity measure assumes the consumer can see the ad. Did you know that a display ad is deemed “viewable” if at least half of each ad is visible on your computer or smart phone for a minimum of one second? Data released in 2014 by comScore indicated that more than half of online display ads appear on parts of a web page that are not viewable. In response, the Interactive Advertising Bureau noted that for various reasons 100 percent viewability is “not yet possible,” but the industry should aim for 70 percent. In other words, hope that “only” 30 percent of your intended ads are not seen by anyone for at least a second!
4. Forgetting Locality: What we now know about shopping and social media activity says that online and offline behavior interact. They’re complements, not substitutes, and you ignore these interactions at your peril. The vast majority of communicationson social media sites are between friends who are within 10 miles of each other. The same is true about the available data on buying behavior. As Wharton professor David Bell documents, the way people use the internet is largely shaped by where they live, the presence of stores nearby, their neighbors, and local sales taxes.

All businesses must link customer-acquisition efforts with a coherent strategy. You can’t do that if you are not clear about the differences between hype and reality when it comes to buying and selling. But right now, much current business talk about social media lacks any programmatic use of the medium beyond “having a presence” on Facebook or Twitter or whatever. And here is my prediction:

Better use of social media will come from programmatic buying and selling of ads. In these electronic exchanges, buyers meet sellers for all varieties of digital media. It’s like a financial trading desk where data are required for the real-time bidding that takes place. As in any market, the resulting price says a lot about the value of that ad and that medium to that business. Programmatic buying now accounts for about 20% of digital ad spending, up from practically nothing just 3 years ago. As it increases, avoiding these traps will be necessary for the brands, agencies, and social media firms seeking to persuade those brands to buy their wares.

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Frank Cespedes is the MBA Class of 1973 Senior Lecturer of Business Administration at Harvard Business School. He has run a business, served on boards for start-ups and corporations, and consulted to many companies around the world. He is the author of six books, most recently "Aligning Strategy and Sales: The Choices, Systems, and Behaviors that Drive Effective Selling," and many articles in Harvard Business Review, The Wall Street Journal, California Management Review, and other publications.

Follow Frank on Twitter @fvcespedes.

This article was adapted from Frank’s HBR blog.