One of the basic elements (and benefits) of any direct marketing campaign is the ability to track and measure results. That's a primary reason why we like this business so much. You get the gratification that the marketing dollars spent resulted in positive results (like new leads acquired, new sales made, etc.).
So I was really pleased to come across this article that seriously attempts to quantify the value of Word-of-Mouth marketing: What's a Conversation Worth?
"LET'S SAY YOUR GREENEST FRIEND recommends the latest hybrid vehicle. Or a dairy-sensitive "foodie" suggests you try some new vanilla flavored soy milk. Or your frugal father-in-law steers you toward a particular variety of charge card. Few would question the power of these types of recommendations. After all, they cut through advertising clutter with relevant advice from trusted sources. This elusive credibility led marketers to spend over $1 billion on word-of-mouth programs last year, despite the fact that nobody seems to agree on how to properly value an unscripted consumer interaction."The article talks about the challenges of measuring social marketing and how it is so hard to compare to other mass media. Author, Dave Balter, CEO of BzzAgent, has decided to tackle this issue via a series of white papers, each focusing on a different measurement component. The first topic is CPM. From the article:
"In order to consider whether CPM is an ideal measure, one needs to consider how to calculate what a proper effective CPM might be for a word-of- mouth conversation. We begin with the simple correlation of a dialogue to an impression, and then layer on the additive values of word of mouth, such as premiums for customer targeting, value of a trusted source, length of engagement, and generational impact (or ripples of conversation)."
"The big, scary question looms: What is the proper effective CPM for word of mouth? $30? $300? $3,000?"The article provides an easy link to their white paper (no registration required) that delves into the calculation of measuring word-of-mouth marketing in terms of CPM. Now, for some reason, they left out most direct marketing channels in their comparisons, but there's still some valuable insight to be found here.
I know that I'll be on the look-out for upcoming articles on this topic of measuring social marketing efforts. Somehow, our pesky clients will only hire us to produce measurable results, so having a framework around how to measure social marketing results is a great way to add more of this to our direct marketing tool-kit.