San Diego Business Journal

The CEO of a San Diego company recently told the marketing staff to minimize the time and resources invested in Facebook and other social media to concentrate on improving the Google search ranking of the organization’s website. Because most customers had learned about the company through Google searches, the CEO regarded moving up the website’s ranking in the search results as the marketing staff members’ number one priority.

However, because the company did not Twitter or post updates on its Facebook page, its Google search ranking not only didn’t improve, it dropped below its chief competitor’s ranking.

The San Diego company’s decision to minimize its investment in social media backfired because, “Google has completely reworked its algorithms to determine a website’s ranking and placement,” said Steve Shulman, founder and CEO of High Clarity LLC, a software consulting company in Carmel Valley. “Historically, this was determined by content with meaningful keywords and phrases, as well as back-links from other websites. With Google’s recent changes, a website’s ranking is now based heavily on the amount of social engagement and interaction taking place on sites like Facebook, Twitter, Pinterest and Google Plus.”

Content continues to play a role, but social media have become an essential part of search engine optimization, forcing most companies to implement a social media strategy just to maintain their website ranking, Shulman said.

As a result, a company’s Google search rankings have become a factor in evaluating the return on investment of a social media program.

Not That Black and White

“The ROI measurements should be defined upfront during program planning, said Bill Trumpfheller, president of San Diego-based Nuffer Smith Tucker public relations. “That’s when you determine what you’re trying to accomplish and what you are going to measure.”

He added that if the company markets a product or service, the plan should describe how the digital strategy will support the selling effort.

“A lot of business owners expect that a dollar spent on social media will immediately result in a certain dollar amount in sales, but it’s not that black and white,” said Rebecca Coates Nee, assistant professor in journalism and media studies at San Diego State University. “By engaging actual and potential customers, Facebook and other social media help build the brand awareness and loyalty that pay off in the long term.”

While social media may not directly deliver sales, they will help a company make sales, she said.

Brad Slavin, founder and chief conversation officer of Webheat LLC, a San Diego-based online marketing company, compares social media’s role in selling a product or service with a basketball player’s assist. In an assist, the player passes the ball to the team member who has the opportunity to score. The best metrics for assessing social media’s role as an assist are not the numbers of people who have clicked the “Like” button on Facebook or who follow the company’s Tweets, Slavin said.

“A CEO whose sole interest is how many fans his company has on Facebook or how many followers he has on Twitter does not understand that increasing these numbers does not automatically impact the bottom line,” Slavin said. “These types of metrics would be considered vanity rather than actionable metrics.”

They Have to ‘Like’ You

Actionable metrics measure such interactions as the number of Twitter followers who regularly re-tweet the company’s tweets and the percentage of fans with comments on the Facebook wall. Other actionable measures include the percentage of fans who share new postings with friends, and the followers who click on the company’s website address on Twitter and other social media platforms.

“It’s not a question of the size of your fan base, it is how devoted they are to your company and the desire for them to amplify your messages,” Slavin said. “If Facebook and Twitter can be compared to the basketball player’s assist, the company’s website would be the team member who is in a position to score, because the goal of social media is to bring consumers to the company’s website.”

The website’s content and design should further engage the consumer to purchase a product or service or achieve another desired action, Shulman of High Clarity said. By measuring the amount of time that the Facebook fan or Twitter follower spends on the website and identifying the pages that are viewed, experts can obtain actionable information.

Nuffer’s Trumpfheller described a food company whose website included a few videos illustrating the use of the product to prepare meals.

“We noticed that many people were visiting the website just to look at the videos,” Trumpfheller said. Adding more food preparation videos boosted traffic to the website. “We showed through market research that people who watched the videos were more likely to purchase the product.”

Go Ahead, Complain

Shulman and Slavin recommend AARRR metrics for determining the ROI of Facebook pages and other social media channels. The term AARRR is a social media metric used by some that stands for acquisition, activation, retention, referral, and revenue. AARRR begins with acquisition of the fan and identifies the channel, such as Google, that brought the individual to the company’s Facebook page. The next step is activation, occurring when the fan posts comments or questions on the page. Retention is illustrated by the fan’s returning to the page. Referral occurs when the fan invites friends to the site. Revenue represents the purchase or completion of other desired actions.

An often unrecognized ROI of social media is the opportunity to respond to complaints about the company that are communicated on Twitter, Facebook, Yelp Inc., or one of the other social media channels.

“Social media is very different from any other communications because it allows people to talk back to the company,” SDSU’s Nee said.

Slavin recently talked back to a company after purchasing one of its products. On its Facebook wall, he described the difficulty of setting up the product. A company representative immediately responded with an apology and an offer to replace a defective part.

If not for the instant and positive response, Slavin said that he likely would never buy another product from the company.

Cathy Yarbrough is a freelance writer for the San Diego Business Journal.