FreshNetworks Blog

I’m returning to the subject of measuring the ROI of online communities after an all day session with a client today. We spoke a lot about how they are to measure the benefit of the online community they are launching and about the metrics they are going to measure and the KPIs they will report on.

I’ve worked with a lot of clients and read a lot of things on metrics and KPIs and have noticed that many people confuse these two terms. Really they’re very different. The best description I have seen of how and why they are different is a presentation from Dennis Mortensen, that I’ve copied below. It’s worth a look as it quickly and clearly shows how and why metrics are different from KPIs.

This ties in to the debate on measurement in online communities. There are many things that you can measure (metrics) but only some things that show the impact your community is having vis-à-vis the business or other objectives of the site. These are KPIs and are what you probably will be using to show the success of your online community.

So work out all the metrics that you can track with your online community, and work out what KPIs you are going to report on to show the success of your community. Both are measurements but only the latter is really a measurement of success of ROI.

Some more reading

• So How Do You Measure ROI of Online Communities?
• Great Article on Measuring Social Media ROI

The answer to this question is simple and complex. The simple answer is that you make sure you establish a set of criteria when you launch the community and then judge success against these. The complex answer come with some of the ways in which you may judge success.

The workshops that I’ve run with clients at FreshNetworks only prove that every online community has a different set of aims and so needs to be measured in different ways. However, a few basic principals exist that show the possible ways in which you can measure ROI.

First of all it’s useful to distinguish between actual measures of ROI and measures of the health of the community. As people who build and manage online communities, at FreshNetworks we are interested in metrics such as number of people who log-on each day, proportion who make contributions, average amount of time spent on the community and other such measures. These help us to benchmark the community against others that we have run and understand how each community is developing. It’s also useful for us to be able to build a set of metrics across community types so that we can better understand consumer behaviour in them. In most cases however, such measures are not (just) what we use to measure ROI.

A client may want to own the debate in a certain area. It may want to work with its customers to improve or develop its product in an online research community. It may be looking to engage a new audience demographic. It may want to amplify the word of mouth for its services. There are many reasons why people may set up online communities and understanding these on a very granular level is the first stage to effective measurement of ROI.

Then it’s just a matter of work out which factors will help you to understand how you are performing against these aims. There are really two types of data you can measure in a community

1. Qualitative data - this could mean measuring the quality of conversations about the brand, the response to the brand and competitors, the increase in actual conversations and dialogue about the brand, the extent to which these conversations are positive, the quality of ideas generated. Whatever you’re trying to achieve there will be qualitative measures that help you to measure this. Of course the problem with qualitative data is exactly that - it’s qualitative. Although this is the nature of online communities - they’re a space for conversations and discussions. So we often find that establishing detailed qualitative measures of success can be the most revealing and the most informative.
2. Quantitative data - to some extent this is much easier to measure, the trick is measuring the right thing and not measuring too much. From Google Analytics to more bespoke packages there are ways of quantifying a member’s interactions with the site and building a set of measures from this. It may be about reaching more people (possibly of a certain type), or about engaging the same people for longer. Quantitative measures can be good for understanding how people interact with the site.

This is really the fundamental difference between these two types of data and these two ways of measuring. Qualitative data helps us to understand the quality and usefulness of the contributions to the online community. Quantitative data, on the other hand, shows us how people have interacted with the site.

Most are important to measure and different clients have different aims from their online community - this means that different baskets of measures are needed. Sometimes you’re more interested in the quality of debate and so want to include a greater number of qualitative measures; sometimes you’re more interested in the reach and penetration of the community and so want to include more quantitative measures.

Whatever you measure it is that first question that’s important: what are you trying to acheive with this online community; how will it help your business? Answering that is where it all begins and one of the most critical stages in planning a successful online community strategy.

Some more reading

• Social Media Measurement Camp August 08
• Where Does Social Media Sit in a Firm? Probably Many Places
• Great Article on Measuring Social Media ROI
• Social Media + Measurement + ROI = it’s all about CRM
• Measuring the Value of Your Blog: Reflections Over the Last Year
• Communities = more than the sum of their social media parts
• ROI for Social Media Engagement: B-B Lead Generation
• How to Measure Social Media ROI for Business
• Building your Community Strategy
• Online Media Measurement Framework

Today’s Libération, in Paris, reports on the rise of “le Twitter” (or gazouillis as it could be in French) and in particular its use in politics. Citing a French researcher the article says that:

Politicians, already under pressures, like to think that with these new means of communication they will escape the yoke of journalism and instead establish a direct link with the public

Twitter is still in it’s infancy in France. It has only 6,000 users, as opposed to the two million French people on Facebook. But even though the take-up is small (although growing rapidly) it’s development is being accelarated by learning from how it is being used in the US.

The French researcher quoted in the article no doubt has Barack Obama and his more than 50,000 followers in his mind. But what is interesting is to compare how he is using Twitter and how it is being used by French politicians.

Obama has a large following and is using Twitter as a means of pushing out messages and feeds. Contrast this with Benoît Hamon, a French Member of the European Parliament. He is using Twitter to give updates on what he is doing, such as

I don’t understand why riot police has cordoned off the European Parliament for Sarkozy’s arrival. The strikers have always been peaceful until now.

This contrast is interesting and shows, again, how the same social media site can be used by different people for different things. Obama is using it to issue notices and updates, Hamon to give his followers a real insight into his life and observations.

Perhaps most interesting, however, is that even though Twitter is in its infancy in France it is being used in a very mature way by its politicians. This shows that being a first mover can often mean a slower adoption curve. The US took to Twitter a lot quicker but the growth of corporate, political and organisational use of the medium to engage the public has developed quite slowly. France can start higher up this curve. It can start much sooner to use social media to have a direct link with the public.

Some more reading

• Can Barack Obama Fix Twitter?
• Twitter, la nouvelle arme des politiques
• McCain Lags Behind Obama in Online Fundraising, Social Networking Popularity

A few weeks ago I posted about the nature of friendships and manners online and in social networks (see post here). Over the weekend I heard a conversation that made me think again about this and post a bit more.

Two people on a train from Cambridge to London were discussing Facebook. Let’s call them Mary and Simon. Mary was bemoaning how she doesn’t use it that much because she doesn’t want “people to know what I’m doing all the time”. Simon on the other hand found that he was slimming down his friendship group because he didn’t “want to know what everybody was doing all the time”.

This conversation highlighted for me a rather developed aspect of the nature of friendships in social networks. One of the features of Facebook, Twitter and other networks is the ability to constantly update what you are doing, what you have stumbled upon online, photos of events and so forth. This can be seen in two ways, the second of which is often overlooked:

1. You are sharing information with your friends - you update what you are doing, post photos and write notes that you want your friends to read. It’s a way of you keeping them up to date
2. Your friends are being shared with by you - this constant flow of updates and and information is received along with those of every other friend

In terms of how you deal with situation, there is a need for people to understand both of these and then to respond to them. As I said in my previous post, social networking manners is an emerging area and one where people are developing their own approaches to mirror their different uses of the networks.

Some people update regularly, share everything they find and will constantly tell you what they are doing. Others use the networks only report on things that they would possibly previously have done via email. Both are valid approaches but can come into conflict with each other. When a small number of your friends update regularly on everything and other very rarely, then your news feeds will be overrun by this minority.

Of course there are two ways of dealing with this - either unfriending the frequent updaters, or conversely adding even more friends so that their updates get drowned out. But perhaps the best thing to do is to reevaluate what it is you use your social networks for.

Different social networks are for different things. I update Facebook more than LinkedIn, for example, and befriend different people on each of these. Whilst my friends on Facebook may want to know about the wedding I was at over the weekend, those on LinkedIn probably don’t.

When you think about accepting friends and using social networks it worth thinking about who else you are friends with their and what, for you, the purpose of this network is.

Sharing is great, but share the right things with the right people in the right places. Some people want to be shared with regularly and others don’t. The beauty of social networks, and one of the reasons I expect that the proliferation of networks and communities will continue, is that you can go to different places to do different things.

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• What is a social network
• What are your tips for using your social networking profile for professional work?
• What are your tips for using your social networking profile for professional work?
• Stalking your friends could be big business. $3.3 billion location-based social network economy by 2013?
• Dear Social Networks: I’ll Decide Who My Friends Are

A couple of days ago I blogged about some of the emerging analysis of online communities and their benefits from the Deloitte and Beeline Labs 2008 Tribalization of Business Study. I’ve  now seen the full slide deck and have posted this below.

For me, perhaps the most shocking statistic in this study continues to be that 34% of the communities studied did not have somebody charged with managing them. One of the things that people can easily overlook with online communities is that, although technology is important, these are social environments and so the social structure needs to be set up and then managed correctly. A good community manager is critical and when paired with an effective strategy and good technology it can make a community really fly.

I should also add that whilst the social aspects are important, so is technology. In fact another revealing statistic from the study is that almost one in ten of the communities studied had more than ten community managers. With good technology and an effective strategy you can really make this process more efficient. Meaning that a community can grow significantly, without a concomitant increase in bodies managing the community.

Anyway, here are the slides

Related articles by Zemanta

• Do Branded Online Communities Fail?
• Companies failing with social networks
• Why (most) online communities fail
• Building your Community Strategy
• Some Evidence of Online Community Benefits

I have worked a lot in the past with Education clients, especially with organisations who were trying to ammend their offering to prepare learners for the jobs they might be doing in 5, 10 or 20 years. It was an interesting time and I learnt a lot. One fact that struck me was that the role of education is to prepare people for jobs that don’t yet exist.

I was reminded this week when I was thinking about Generation Y and how they are changing the web (I posted about this before) and the world of work. To some extent Generation Y is having a significant impact on both of these. The way they are plugged in, value peer opinions, don’t see TV as the main medium and their social consciousness (amongst other things) means that they are changing the way they want to use the web and the way they want to work.

Another way to look at this situation is that the web and work are adapting to meet the changing needs of Generation Y. A narrow distinction, but a difference nonetheless. Perhaps it’s the case that rather than being the driving agents of change, change is happening to meet their needs.

This then reminded me of a presentation I saw last year. This is the UK version of a presentation originally developed by Karl Fisch. It was presented by Microsoft at a Building Schools for the Future conference in London - a conference about the scheme that is rebuilding all British schools to prepare them to deliver the changing needs of learners.

I think the presentation shows clearly (and quite powerfully) that change in a variety of arenas means that the environment people  are now growing up in is different. If Generation Y has changed the way we work and use the web, then the next Generation is going to face even bigger changes and will have to adapt and adopt to meet these. Generation Y has changed the way we work and use the web. The real push should be to change the way we learn too.

Some more reading

• Generation Y: Too demanding at work?
• What Will Globalization Do to Languages? A Freakonomics Quorum
• Can New Media Be Taught in Schools?
• Who has more data about Gen Y: Facebook or the US Government?

So here’s another post on the Deloitte / Beeline Labs 2008 Tribalization of Business Study that everybody seems to be talking about (including me here and here).  They are running a webinar next week on the study and I came across some slides they will be talking about thanks to Awareness Networks.

Here are a couple of slides that start to show the benefits identified of online communities. The first shows what companies are doing with online communities and the second shows the benefits they are getting.

It is clear from this that amplifying word of mouth, innovation and online research communities that are the most frequent use of online communities in the study. This mirrors our experience of working with clients and talking to people in this space. All three of these can be uses of the online community and this medium of engaging people is great for achieving them.

Perhaps of more interest for me is the second slide that looks at the benefits people are seeing of online communities. Greater awareness (including through better organic SEO) is something that is a clear benefit for brands of a community, as is generation of new ideas. What is interesting is that almost 25% of firms reported that the online community led to each of: increased sales, more referrals and more leads. This shows the clear and immediate business benefit of the communities and so the more immediate (as well as the longer term) benefits they bring.

These slides are great and start to show some of the real benefits of online communities that the study found. Adding depth and detail to the reports that came out when this study was first released.

Usage of online communities

Business measures of success

Some more reading

• Do Branded Online Communities Fail?
• Corporate Social Networks Are A Waste of Money, Study Finds
• Social Networking in the Enterprise
• How Internet Marketers Can Create an Extra Revenue Stream
• Companies failing with social networks
• Why (most) online communities fail
• WeAreMedia Module 5: Encouraging Online Participation - Some Tips from Nonprofits
• OCRN: The Online Community Marketing, Growth and Engagement Report
• Why Does Corporate Social Networking Fail?
• Corporate Social Networks Are A Waste of Money, Study Finds
• The Art of Conversation - It’s About Listening Not Marketing
• Requirements for a social media network

I saw a really useful set of research findings today from Universal McCann, the third wave of their research into the impact of social media. The research comes from a couple of months ago but is a fantastic digest based on a large respondent base.

The slide deck is below and is very detailed and worth going through, but I thought I’d pull out three highlights that resonate with our own experiences at FreshNetworks.

• The research highlights the power and continuing rise of the Asian social media market. China has more bloggers than the US and Western Europe combined and across the region social media growth is huge. I’ve seen this for a number of years, often investigating the Asian market (especially South Korea, China and Japan) for clients wanting to know what the next thing to hit the Western Europe might be.
• Video is the fastest growing reported area with significant growth in penetration across all regions. We see this every day - a growth in the use of video on sites and of making video portable and shareable. I know that the BBC in the UK has seen a significant rise in the viewing of video in its news site since it started embedding video rather than linking to it.
• There is a measurable impact of social media on brand reputation. The research shows that 34% of people post opinions (positive or negative) about brands and that 36% feel more positive about brands that have a blog. This is an interesting finding, our recent post on brand blogging talked about how brands might get this right, this research underlines the importance of getting it right.

The slide deck below covers the full detail of the research findings and I really think it is worth your while reading it. It’s particularly useful for looking at how different regions and countries are developing in different ways.

Some more reading

• Report: Like it or not, number of bloggers growing rapidly
• UK Social Network User, Ad Spend Numbers Keep Growing
• Firms ‘miss’ social site success
• YouTube most popular network site
• Summer Social-Network Traffic Still Sizzling, but Down from ‘07

I’ve spent the day talking about online communities. At the WOM UK Espresso briefing this morning and then with a client until now. So returning to my desk it was great to see updates of two new online communities that have launched. One for US brokers, Charles Schwab, and the other for UK high street retailer, New Look.

For Charles Schwab, the online community is a benefit to its active clients. It has created Schwab Trading Community for it’s active trading clients to, reportedly, do four things:

1. Participate in timely discussions on both short and long-term investing topics
2. Swap information, ideas and trading experiences
3. Connect with other traders to make trading more fun by learning from each other
4. Gain access to Schwab and third party trading experts both informally and via a series of blogs, tutorials and live webinars

The New Look community is different. MyLook, as the community is called, will be for a select group of customers to help with business issues. As they say:

MyLook allows customers to share their views, suggest improvements to the brand and give opinions on the latest trends through surveys and forums on the site.

The insights gained will be presented to the board to shape the brand’s direction and strategy.

These two communities highlight well the very different purposes brands can use communities for and the different ways in which they then execute their plans.

• Charles Schwab is an example of a community that rewards loyal and regular customers - providing services that would be of use to them while extending their brand experience and building advocacy and word of mouth for the brand.
• New Look is an example of an online research community, it is private and invite-only. Building a community of customers to test new business ideas and to get feedback.

Whilst these are both online communities they are very different, they will probably use very different features, be attracting different types of people and be managed in different ways.

They are, of course, aimed at different types of people from brands in very different sectors. For me that just shows how online communities can be used by a wide range of brands to reach a wide range of people.

Related articles by Zemanta

• Some Q&A; on virtual private communities
• Charles Schwab launches online community for active traders
• Charles Schwab Launches Virtual Community for Active Traders
• New Look to use online club to shape business

For the last few days I’ve been privy to an interesting  example of how not to use social networks for marketing. It all started when somebody I don’t know (let’s call him John) asked to be my friend on Facebook.

I don’t know John and have never known John. It became clear that we were both members of a couple of groups and that was, I assumed, where he had got my details from. I have a fairly tight group of friends on Facebook and use it mainly to keep in touch with people I know and don’t get to see as often as I like. So I haven’t accepted his invite. I did look at his profile though and the very day he asked me to be his friend he also befriended almost 200 other people.

People are popular, but often not all at the same time like this so I wanted to find out why.

As I checked back at John’s profile, signs came with his changing statuses. First was one telling us that his new book was out in a few months and we should call his PA to reserve a copy. Next came an update about a radio interview he was doing and then came one about an event.

It may be a coincidence but it seemed as though John had found people with interests aligned with his new book and asked them to be his friend so that he could constantly market his new book through their feeds.

Clever you might think and there are lots of people (myself included) who feed their blog posts and other items through Facebook. The problem came in John’s approach to adding friends.

Over the last couple of days posts have appeared on his wall saying things like

Thanks for the ad. Who are you?

This wasn’t just spam. John is a real person who has found people with similar interests to him and asked to befriend them. This happens all the time. That John was trying to use this for marketing just highlights the complexities of using Facebook for this.

Facebook is a very personal space. It’s the place I go to to find out about my friends, post my photos and read my messages. This can be a very difficult context for brands, or anybody trying to market a product, to enter. You are interrupting a user’s experience and need to do it sensibly and sensitively. Whilst some people will be happy to receive your updates to their news-feed, others will see this as an intrusion.

Of course dealing with this is easy. Just don’t befriend them. From the marketers perspective this makes it difficult to control who you can get your message to.

Some more reading

• Facebook Marketing
• The Facebook Platform is Biased Toward “Fun” Apps
• Three Reasons To Become Friends With FriendFeed
• Social Networking - Go Where the Fish Are!