As long as I’ve been in digital marketing people have told me that, because we had “all” the data, we should be measuring every effort to the end of the sales chain and evaluating on that basis. For a time I believed this and would run campaigns solely based on direct sales outcome while my counterparts in TV, Radio, Print measured the impressions, the lift of the business that week, or whatever metric they could correlate.

With social the approach to measuring has really crept into the same process. Sure we had – and still have – a lag in getting to the right data, the naysayers who argue that if you don’t measure ROI elsewhere, why measure it here, the people who say you can’t, or shouldn’t but all said the abundance of metrics in the space have made it too tempting for companies to peer beyond the social stats and into the business results.

But what I learned through all that media buying, all that “what’s a sale” ROI analysis is that the TV / Radio / Print people had one things right… as good as metrics are, they only tell you story of how to grow those metrics and that isn’t always a part of the greater tale of what’s making you succeed.

Social metrics only count what they can see and they can’t see much.

How many of your customers make a purchase, walk out of your store elated and immediately call a friend to advocate your brand to them? How many times will you be mentioned over beers during Sunday football? Or in the mall during a shopping trip? The answer is that you don’t really know… We get indicators through surveys, customer rep interactions, but we never profess to measure the absolute number let alone bottom results that a casual mention brings. Social is no different: we’re able to access a slice of the conversations but it’s only part of the pie – and a shrinking one at that.

Measuring Word of Mouth: No one includes a track code in their conversation

The most common Social ROI calculation comes by taking the number of people who click a link from a Tweet, Facebook posts, etc and within the same cookie-measured period convert to an action of some sort whether that’s a sign up, a lead, or a sale. This is simple, logical and traditional ROI methodology and yet fundamentally misses measuring how social actually works: person to person.

Just imagine if this scenario were applied offline…

Running off of the previous sample people are mentioning brand all over the place… in the mall, around a sports game but you’d even dream that they’d include a specific reference code along with their endorsement or that when the people they told it too walked into your business they would recite that code, or much of anything about the introduction, back to you. On the web it’s the same. People don’t share links that you pick. They take your story and write their own intro, they mention you once in a longer tweet, or as a offshoot in a blog post and the more embedded the mention is, the more relevant and authentic it becomes. An affiliate link from a friend is worry little; a raving review is worth everything.

Measuring Conversations: The door is closing on what’s being said

A recent CEA survey indicated that only 26% of people believe they’re sharing anything publicly on social networks. As the demand for privacy is grows, people are cutting off read access and locking down across many tools and that means less to see, less to read. But the desire for reporting doesn’t slow just because the data is limited; instead we turn to what remains open and use that. Twitter, parts of Google+ and the open posts on Facebook. On one hand all good barometers to gleam out individual remarks and action they remain fundamentally flawed by their population bias, by their sample size and thus as an overall read the fail provide anything comprehensive.

It’s like doing research on your nation-wide customer habits by only calling people who live in Texas.

Even if you’re more sophisticated, doing backend data matching with your follower list against customers, you’ll still be left making conclusions off a fraction. Think about it: the top brands have 5, maybe 10 million fans against 10 or 20 times that many customers….  People like a page on their terms and often long after getting a product, if ever. But does that mean social was missing from the equation?

Measuring the “other “benefits: Social is more than just sales, much more.

Just as important as how we measure is what we measure and the evidence is that it’s not all about the sales. Again this is natural — the flow of social is that people who have experienced, who have a problem, who really like what we do are the ones that connect, not just those on the fence. Thus the benefits come all over… cost savings in service… reputation improvement… a boost to retention… even product development insights.

But while sales are easy to break apart, the so called “soft benefits” are no. What’s lift of knowing to put more cheese on the next pizza? How about in answering the phones quicker? These are tough questions with no direct result and it often takes months or even years for a chance to fully impact the consideration and purchase processes. So we turn back to what can see and what we always use judge marketing because face it, we’re still calling social media, and that’s sales.

So while we may remark that there’s “other benefits because we can’t quantify them per interaction, per fan, per anything into a clean dollars and cents column, ROI becomes sales on investment, reduced calls on investment, coupons printed on investment and we quickly stop considering anything else.

But it’s not just what we measure: How we influence has changed.

The sales funnel is no linear. There’s no entry point, no requirement to visit a store, order a catalog or go to a website to start thinking about a brand or a purchase. Smartphones, tablets, kiosks, mall stores, retail, ecommerce… we’ve gone from one to two to over a half dozen purchasing channels.

And how we expect to behave is shifting as a result. When you can share anything and you know your network can access everything, what matters is your spin, your opinion why waste characters on a link everyone knows or can find. Amazon gives out a $5 or $10 offer and more tweets ask people if they used it or about it than end up linking to it. If you only tracked the clicks to conversions, you’d miss success.

By following what we can see, we’re abandoning the big picture.

The danger isn’t in measuring what we can see; it’s in assuming that what we measure is what’s happening. When we have data we logically want to follow what it says but in social the data is just an indicator of what’s risen to the top, what’s public, what’s got our magic link involved.

If we make that slice our focus where does it lead us? The logical jump on making more that we can track, more of the same, more of what we say is “working”. Abandon the casual mention, forget people telling a friend, the smartphone photo in the store, the self-made pin… those don’t associate with clicks, leads or sales. Instead bring out the funnel… the offer sign up form, the coupons, and the contest.

Those aren’t bad things on their own by any stretch but are they social? Do they have correlation to opening up to interact with our customer? To show our expertise? Build our sense of value? Reposition our brand in a market that expects transparency? Or even drives people to want to tell their friend so they can try it too? By focusing on what call ROI what we’re saying is focus on what can carry through to ROI and while that’s improving, it’s the story, it’s not what social really does, it’s not where success is.

… When I was a new direct response marketer I let myself believe that the influence my message had was captured by a funnel we created, we defined and we wanted to force. Social is the inverse of that reality and it’s our job as marketers to insure everyone understands the distinction between a useful datapoint and an all-encompassing report. If the conversation becomes “do ___, it’s giving us the most customers” we’re not doing it right.