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Chapter 1: Creating Value with Social Media Analytics

Learning Outcomes

• In-depth Understanding of social media value creation concepts.

• Comprehend a generic social media value creation model.

• Understand different types of social media values for customers and firms.

• Gain insight into social media ROI (Return on Investment).

• Formulate social media metrics for measuring ROI.

• Understand analytics investment stages and components of analytics infrastructure.

Challenges in Social Media Value Creation

• Many businesses struggle to plan and generate value from social data analytics.

• Common questions include the definition of social media value and methods for capturing it.

• Key challenges:

  • Inability to tie social media to business outcomes.

  • Lack of analytics expertise/resources, poor tools, inconsistent analytical approaches, and unreliable data.

Understanding Value

• Definition of Value: Refers to tangible and non-tangible assets determining a firm's long-term success.

  • Tangible Assets: Sales, market share.

  • Non-Tangible Assets: Brand name, brand loyalty.

• Success indicators include profitability, competitive advantage, sustainability, ethical conduct.

Types of Business Value from Social Media

• Two primary categories:

  • Value to Firms (V2F): How social media creates firm-specific value.

  • Value to Customers (V2C): The benefits social media provides to consumers.

• Examples of potential impacts:

  • Engaging customers can enhance relationship equity and brand equity.

  • Social media campaigns can impact sales and customer engagement.

Social Media Analytics & Business Value Examples

• The table shows various business models for tangible and non-tangible values:

  • Tangible: eGift programs significantly drive measurable sales.

  • Non-Tangible: Customer recommendation systems improve products and enhance customer experience.

  • Social Media Campaigns: Engagement-based programs can promote brand awareness and customer interaction.

Creating Value with Social Media Analytics

• Emphasizes the importance of extracting actionable insights from semi-structured and unstructured social media data.

• Potential competitive advantages hinge on effective data analysis.

Social Media Value Creation Model

• Stages involved:

  • Define Value: Identify what value means for the business.

  • Align Value: Ensure business goals are aligned with social media strategies.

  • Capture Value: Identify how to extract value from social media.

  • Sustain Value: Long-term strategy for maintaining achieved value.

Analytics Investment Stages

• Enthusiasm Phase: High executive belief in analytics’ business potential.

• Disappointment Phase: Analytics results fail to meet expectations.

• Realism Phase: Refined expectations, focus on practical investment strategies.

Social Media Value Metrics

• Key Performance Indicators (KPIs): Quantifiable measures for success in reaching targets.

  • Include engagement rates, likes, shares, and customer sentiment.

  • Essential for gauging return on social media investments.

Analytics Infrastructure

• Definition: Comprises skills, practices, IT assets, and human/financial resources needed for effective social media analytics.

• Importance of robust IT infrastructure to support data analysis frameworks.

Challenges in Analytics

• Managing Data Quality: Ensuring accuracy and reliability of data.

• Developing an Analytics Strategy: Having a clear plan aligned with organizational goals.

• Addressing Skills Shortage: Need for trained personnel in analytics.

Mini Case Studies

• Global Retail Brand: Increased online engagement through targeted social media campaigns leading to increased sales.

• Technology Startup: Utilized social media to boost app downloads significantly, focusing closely on performance metrics.

Review Questions

• Explain tangible and intangible social media values.

• Discuss the social media analytics value creation model.

• Describe the concept of social media ROI.

• Define key terms such as engagement, interactivity, and popularity metrics.

• Discuss the stages of analytics investment and capabilities needed to generate value from social media analytics.