Pundits and critics jumped on them. While I have my own opinion about these studies in particular (I think that they are a necessary first step, and if nothing else at least kick started a discussion), what it really got me to thinking about is measuring things that are difficult to quantify.
As a web analyst, it’s always comforting to be able to clearly define and accurately measure (well, somewhat accurately measure) the patterns of behaviours of our digital interactions.
Ah yes, mister/ms CEO, I can, with a great degree of confidence, tell you that the website generated $100 trillion in revenue, 50% of which came from clickthroughs of campaign A directly, 20% came from viewthroughs of campaign B, and 30% came from the goat herders ad network.
Ok Dan, Goat Herders sounds like the way to go. I want to do a Facebook page and application, but I’m not sure how much I should spend. What’s a Facebook fan of Goat Herding worth? If I spend this bajillion dollars on this Facebook thing, how many more sales will I get out it?
Umm… some people say a Facebook fan is worth $136.38. Others say it’s $3 and change. The reality is, it probably depends… and sales? Well, I can come up with a fancy attribution model that shows if the person ever visited Facebook and then ended up buying our stuff 3 years later then Facebook influenced their purchase decision, and I can do a revenue forecast based on recency and repeat purchase rate by first visit landing page and content interest areas…. sir… are you awake? Sir?
Spot the leap of logic?
Did Facebook influence their purchase decision? Or would they have bought anyway? Are Fans just an interested segment to advertise to and provide some cool application for? Or does Fan-dom itself create value? Should a company spend money cultivating fans? Is Facebook its own segment or is it just an overlap of existing segments with no actual added value?
Wait a minute.. I’m experiencing 1998 Déjà Vu. “Do we need a website? How much money will it make me? How many people are on that darn Internet-thingy anyway?”
Some things, dear reader, are table stakes. Do you need a website? Do you need a Facebook page?
Anyway the point of all this, if you’re still with me, is that sometimes you just can’t measure precisely what you want to measure. So dear reader, you have a choice. Should you Guesstimate? Or just throw up your hands in despair?
Many web analysts I know would say… just say no. Only talk about what you can measure, and pretty precisely too. If you can’t measure it, it’s a waste of money.
Others like the aforementioned social media companies don’t have a lot of choice. Their business depends on quantifying something they can put on a PowerPoint slide to a CEO. There’s that CEO again… darn him/her!
Reason being is that Facebook pages (and social media stuff in general) are not yet widely accepted in the boardroom as table stakes, and boards don’t spend money on something they can’t see a direct return on (that behaviour ended on March 10, 2000).
So how do you get your CEO to put some bucks on the table for it? You need some ROI numbers. What’s in it for Me? Capital M Me, aka whoever is in charge.
Therefore, we must on occasion attempt to measure the un-measurable, which makes analysts (like me) squirm. Sometimes, we can’t even guesstimate. There’s simply no reliable data available. So what can you do? How should you approach the board?
More to come with part 2 😉