This was very insightful information, especially due to the fact that I am a novice tying to find my social media way. I appreciate the concepts and how you broke everything down – I still am struggling with the best methods to employ to have social media assist in generating revenue. Please forgive my ignorance, but I am a “Rookie” and just searching for the answers. Thank you for your insightful tips. I do appreciate the spirit of helping others within social media.

My Best,
@LouImbriano

To better understand the right-hand side of the equation you may want to become more familiar with the Spark toolset as there are algorithms involved that I didn’t get into in the video. At the end of the day, we’re communicating with customers and building relationships in a social environment. By nature, both are counterintuitive to black and white measurement. However, we’ve found this concept works for us.

a) Twitter followers, Facebook fans & friends and YouTube subscribers fall into the same category. They should be in the same column. (The “reach” column, which is neither hot nor cold. It’s a hard metric.)

b) Assuming that Volume and Engagement are relevant categories/columns, Frequency and Reach would apply to both.

Frequency is a measure of how often something happens. (An activity, a transaction, etc.) How often you engage = frequency of engagement/interaction.

Reach is a measure of how many people you can touch. To use Amber’s own terminology, reach is the number of people who live in your ecosystem. A subset of reach is how many people within that ecosystem you actually touched or engaged with for a particular campaign. Once you realize that, you start to see how the concept of a volume column is a bit shaky: You would have to include “reach” as an element of the “volume” column even though they are basically two words describing the same thing.

But I digress.

Based on this model, I would expect frequency of interactions to show up in the engagement column: How often do you engage?

Likewise, Reach would manifest itself in the engagement column in terms of how many people were touched/reached through… engagement.

c) I think Amy meant “transactions,” but I don’t know. “actual activity and action” probably needs to be more clearly defined. This is her method. You would have to ask her what she means.

d) The size of an ecosystem is the definition of reach. It can’t appear twice as separate elements in the same equation.

e) Before we dive deeper into this, the equation needs more work, starting with the fundamental flaws I already outlined.

f) (somehow listed as a second d) If the equation is supposed to create an influence index, then it doesn’t need a unit of measure. Just call it a Social Influence Index (SII) and you’ll be fine. Whatever number the equation spits out is your “score”. Fair enough. There is nothing scientific about it, but you can probably get away with it.

But if you are going to call it “return on X,” you need a unit of measure. In real Return on investment, you distill the investment in time, human capital and other resources to $$$. The “return” on that investment therefore is calculated in $$$ as well. Money is the common unit of measure. Money is the currency. The ROI equation gives you a ratio of money invested to money earned. The same rules apply here: If this is to be a “return on influence,” what unit of measure is used to calculate that ratio of return?

Without a clear unit of measure, you cannot calculate “return” on something. Basic 101 stuff.

g) (listed as e) is self-explanatory.

I hope that answers your questions.

I recently spoke with a client that is all about measurement. They love numbers and knowing whats going on. The problem they run into is social media measurement doesn’t provide them with an apples to apples comparison to their other platform’s measurements. Any thoughts?

I gather your ROI formula is an area of interest and passion for me as well. I have just posted my view on the business world of sport titled ‘Business model of sport v2.0 – a refocus on controlled, bought and earned media for sports participants, consumers and fans.’ on my sports industry blog http://sportssymposia.com

Only recently launched it but the notion of influence is also common with my thinking. I believe the opportunity lies in being able to align this ROI model to a specific league, club or athlete in order to demonstrate brand value for them respectively. This in turn, should become a contributing factor in the further adoption of social media across sports as the sports marketer begin to understand how to position these services and tools to their clients.

What do you think?

Nick Gonios