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David Alston twitter.com/Davidalston Bryan Eisenberg - Future Now Inc. twitter.com/thegrok www.grokdotcom.com/ Avinash Kaushik twitter.com/avinashkaushik www.kaushik.net/avinash/ Maggie Fox twitter.com/maggiefox Nick Koudas twitter.com/koudas Jim Stern on Emetrics emetrics.wordpress.com/

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An old adage, most often attributed to the founder of Wanamaker’s department stores, John Wanamaker, dictates that half the money spent on advertising is wasted, but nobody is sure which half.

Television and print advertising is widely understood to be effective, but the cost-per-eyeball metrics applied to campaigns in these media are imprecise, leaving a fair amount of guesswork in the calculation of return on investment. If that’s the case for traditional media—which industry has known and worked in for decades—imagine the confusion when it comes to social media, the proverbial new kid on the block that has so dramatically changed the way people communicate in the past several years.

Tasked with trying to measure the value of Twitter to their brands, marketers who are still trying to figure out what exactly Twitter is can be left feeling like plain old twits.

But David Alston, vice-president of marketing for Radian6, a Fredericton N.B.-based social media measurement firm, believes applications like Facebook, blogs and Twitter yield a gold mine of data that smart marketers can use to their advantage.

“It’s a misconception that you can’t measure social media,” Alston says. “That comes from marketers who are used to traditional media, which has standardized [metrics] on eyeballs and reach-frequency models. But social media is absolutely measurable, and in fact, because it’s digital, interactions in social media leave a lot of breadcrumbs along the way.”

Identifying the most relevant of these breadcrumbs is one of the current challenges facing the marketing industry. New technologies demand a new glossary of terms, and social media experts have already pointed to several metrics that, as unfamiliar and strange as they may seem now, are poised to become commonplace before long. And the numbers that will rule are not the big, flashy ones.

Marketers who brag, for example, that their brand’s Facebook page has thousands of “fans” or that thousands more are “following” a Twitter feed associated with the brand, or that their brand blog has drawn hundreds of thousands of unique visitors, may be missing the point of social media entirely.

“Whoop-dee-doo,” says Jim Sterne, author and founder of the eMetrics Marketing Optimization Summit series, about the gaudy fan, follower and visitor figures he hears bandied about. “These numbers have always been great for chest-beating and nothing else.”

Bryan Eisenberg, co-founder and executive VP of FutureNow Inc., agrees, analogizing the social media universe to a big party where the fact that lots of people know you doesn’t mean they like you.

“What you’re looking to build are relationships,” says Eisenberg. “Would you measure a relationship by how many times someone looked at you? Does that mean they’re really engaged with you?”

Engagement has been a marketing buzzword for years—so long that Avinash Kaushik, analytics evangelist for Google, has stricken it from his vocabulary.

“To me, engagement is not a metric, it’s an excuse,” he says. “Engagement no longer means anything to anyone because it means everything to everyone.”

Instead, Kaushik prefers the term “amplification” to refer to the degree to which a marketer’s message or content spreads through online social circles. But regardless of what they call it, the social media gurus agree on several data points that can be used to measure it.

According to Kaushik, marketers using Twitter should pay less attention to the number of people following them and more to what happens to the messages they post. Kaushik charts the performance of his own Twitter account by measuring the number of “retweets”—instances of other Twitter users reposting his tweets—he generates, and further breaks down the data by calculating the number of retweets per thousand followers (he has over 7,000 followers on Twitter and boasts a retweet-per-thousand rate of 7.86).

He also measures “conversation rate” based on the number of Twitter replies he sends and receives per day. Kaushik applies the conversation rate metric to his blog, Occam’s Razor. He measures conversation rate by the number of user comments his posts generate—an average of 38, he says. In addition, he places high value on the number of times his blog is linked to from other websites—Ripple Index, he calls it—and on the number of people who opt in to his blog’s RSS feed.

“At the moment, I have 20,781 feed subscribers, and that number is a billion times more important to me than the fact that last month 90,000 people read my blog,” says Kaushik. “This is an audience I’m building over time, one at a time.”

This emphasis on gradual growth, says Maggie Fox, founder and CEO of Social Media Group, is something marketers should heed. Fox points to the 1% rule of online engagement, which she discovered on the Church of the Customer blog and refers to the percentage of social media users who create new content—for example, a comment on a blog post—as an important yardstick.

“If 100 people visit your blog every day and every day you get one comment, that’s an engagement metric of 1% and you’re very average,” says Fox.

Patience, it seems, is a virtue when it comes to social media, one that Fox and Chris Reid, national manager, product planning and research for Yamaha Canada, preached to Yamaha’s corporate bigwigs when introducing the Sled Talk snowmobiling blog in 2007.

Reid hired Fox’s company to help him make the case that Yamaha needed to interact with snowmobiling enthusiasts in the digital space, and that doing so jived with Yamaha’s three-year objective of creating more “direct touches” with consumers.

Like Kaushik, Reid measures direct touches by counting comments. Reid performs this task himself, a responsibility he says he couldn’t have managed without a year spent using Social Media Group’s proprietary measurement technology and some training on Google Analytics.

“I think in the initial stages it’s important to have someone who knows what they’re doing and has that software available to do the monitoring,” he says.

Whether to go it alone or use a commercial tool is a debate faced by many marketers, as more companies like Omniture, Tealium, Radian6 and Sysomos develop paid services. With freely available tools such as Retweetist, Twitter Counter, the blog “authority” measurement system Technorati, Sysomos’ own BlogScope and the constantly evolving list of applications offered by the Google and Yahoo Analytics platforms, it’s certainly possible to analyze social media data without a major cost outlay.

“I’ve always joked that you just need to find the right person in I.T., take them out for dinner, give them six cans of Red Bull and you’re set,” says Kaushik, noting that open Application Programming Interfaces (APIs) allow developers to build custom add-ons to these free measurement tools. “It’s not trivial, but it’s actually not that hard.”

However, Alston believes it’s helpful for companies to have a Sherpa guide them up the mountain of social media data, and says products like Radian6 increase efficiency and reduce headaches. “You’re pulling in stuff from blogs, online mainstream news, Twitter, video sites, forums, and [that] takes time,” he says. “A solution like ours saves time and money, and that, to me, is the most basic thing.”

According to Alston, Radian6 also goes beyond simply accumulating data about the volume of conversation a brand is generating and actually assesses the relative importance of each individual who posts content about that brand. “If you have limited resources, you want to look at the posts with the most discussion around them, or the retweets by the people with the most followers,” he explains.

Like Radian6, Sysomos—born out of a University of Toronto research project—claims to be able to identify the most influential consumers in the social media sphere.

“The services we provide allow you to analyze the information based on who these people are that are mentioning you,” says Nick Koudas, CEO and co-founder of Sysomos. “And our monitoring tools allow you not only to find out what’s being said about you, but also to engage with those people.

“For example, if someone posted a negative review because they had a bad experience [with a product], you can engage the person directly and offer them something to remedy the situation.”

Social Media Group has also developed a proprietary tool called the Conversation Index, which aims to provide this kind of weighted look at social media conversations, but Fox believes that, at present, no automated system can do the job with complete accuracy. “There’s no way to actually measure tonality without getting real people involved,” she says.

Regardless of whether a marketer relies on their own industriousness or a paid product, it is critical that industry executives recognize the importance of measuring social media endeavours. As Fox says, “If you can’t measure it, you can’t manage it.”

And the fact that not every challenge in social media measurement has yet been met—reliably identifying key influencers, measuring the more private, walled-off arena of Facebook and linking it all to revenue are just some examples—should not dissuade companies from learning about the metrics that are available.

In marketing, as on Twitter, it’s much better to be a leader than a follower.