Journal of Small Business and Enterprise Development

Use and measurement of social media for SMEs

Margaret McCann Alexis Barlow
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Mark Durkin, Pauric McGowan, Niall McKeown, (2013),"Exploring social media adoption in small to medium-sized
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Sulaiman Ainin, Farzana Parveen, Sedigheh Moghavvemi, Noor Ismawati Jaafar, Nor Liyana Mohd Shuib, (2015),"Factors
influencing the use of social media by SMEs and its performance outcomes", Industrial Management & Data Systems,
Vol. 115 Iss 3 pp. 570-588 http://dx.doi.org/10.1108/IMDS-07-2014-0205
Georgios Tsimonis, Sergios Dimitriadis, (2014),"Brand strategies in social media", Marketing Intelligence & Planning,
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 Introduction

Social media describes “the way in which content (particularly news and opinions) has become
democratised by the Internet and the role people now play not only in consuming information and
conveying it to others, but also creating and sharing content with them” (Cook, 2008, p7). Social
media has brought revolutionary new ways of interacting, participating, cooperating and
collaborating and involves users generating content and connecting with people through a many-to-
many, rather than the traditional ‘one-to-many’, communication approach. A range of services,
technologies and applications are commonly associated with social media including social networks,
blogs, podcasts, wikis, RSS feeds, forums, media sharing and social bookmarking (Safko, 2012; Kaplan
& Haenlein, 2010; Cook, 2008)).
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Social media is becoming an integral part of everyday life for communicating and sharing
information and other media. It is mainly free and easy to use and therefore can provide businesses
with a relatively quick and low cost method of connecting with customers (Fischer & Reuber, 2010).
This is especially beneficial to small and medium sized enterprises (SMEs) that may not have the
financial backing or technical expertise required for other, more traditional, technical solutions
(Stockdale et al, 2012; Zeiller & Schauer, 2011; Kaplan & Haenlein, 2010; Dyerson et al, 2009;
Nguyen, 2008) and require short term and tangible value in any new endeavours (Stockdale et al,
2012; Mehrtens et al, 2001) However, to ensure that social media is used effectively, businesses
must have a clear plan indicating how it will be used and what it will be used for. Without this,
businesses cannot determine its usefulness or effectiveness.

This paper is structured as follows. It firstly examines the use of social media by SMEs and discusses
the debate about whether or not the impact and economic value of social media can be measured.
It then highlights the importance of planning for the adoption of social media, determining
objectives and metrics for its use and contemplates using current analytical tools for measuring its
effectiveness. The paper then goes on to outline primary research undertaken, involving a
questionnaire survey, which has been carried out with representatives from SMEs on their use and
measurement of the ROI of social media and provides a discussion of these findings. Finally, the
paper provides an overview of existing models and concludes with a recommended framework for
planning, implementing and evaluating the ROI of social media for SMEs.

Use of Social Media

Safko (2010) describes social media as an extension of traditional media employing a more
sophisticated set of tools, techniques and technologies for connecting, building relationships and
 social interactions. Similarly, Edosomwan et al (2011) agree that the concept of conversation, social
interaction and engagement is not something new but has evolved to incorporate enhanced digital
technologies. Although both authors highlight the evolution of media, they also emphasize its
interactive and social qualities for the communities of users involved in sharing, communicating and
working together.

Social media can be classified in a number of ways. Safko (2010) and Mayfield (2008) both classify it
based on the functionality linked with the type of application: Safko (2010) presenting 15 different
categories while Mayfield (2008) compresses it into 6 major categories based on functional
characteristics of blogs, wikis, podcasts, social networks, forums and content communities. Cook
(2008) classifies social media based on how it is used for interaction using the term of the ‘4Cs’,
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namely communication, co-operation, collaboration and connection. Weinberg and Pehivan (2011)
consider the longevity of information together with the richness of the content. Although the
classification approach adopted by different authors varies, there is overlap in the functionality of
the applications, the type of human social interactions and the level of information content. It is
these properties and features that make social media unique and attractive to business in their
ability to enable, encourage and enhance participation, conversation, collaboration and interaction.

In recent years social media has become an integral part of everyday life with year-on-year growth in
the number of users. At the time of writing, Facebook has 901 million monthly active users
(Facebook, 2012); Twitter has 140 million users (Twitter, 2012) and LinkedIn has 161 million
members worldwide (LinkedIn, 2012). These statistics demonstrate the popularity of social media
which in turn provides an indication of the enormous influence such applications carry. A further
development is use through mobile technology meaning that users can access the media anytime,
anywhere (Kaplan & Haenlein, 2010; Kim et al, 2010; Beer, 2008). Therefore, businesses would be
foolish to ignore the growing number of people who regularly and frequently use these applications
routinely and the subsequent value and potential of this to create business opportunities. From a
business perspective, social media can be used in a number of ways to improve operations and
enhance the business profile through: improved communication; greater exposure through
amplifying word-of-mouth effects; ; getting closer to and building relationships with existing
customers; attracting new customers; promoting a company’s products/services; improving brand
awareness; increasing volume of traffic to website; increasing levels of sales; improved
collaboration; and establishing online communities (Divol et al, 2012; Stockdale et al, 2012; Fischer &
Reuber, 2011; Montalvo, 2011; Nair, 2011; Zhang et al, 2011; Hofman & Fodor, 2010; Kaplan &
Haenlein, 2010; Cook, 2009; Mangold & Faulds, 2009). Businesses are therefore increasingly
 attempting to embrace social media as an intregral part of working life and exploiting it for
competitive advantage (Kiron et al, 2012; Qualman, 2010).

However it is not enough for businesses to simply introduce social media, for example, in the form of
creating a Facebook page or a Twitter account. To use social media effectively, businesses must
have a strategy for its use and consider why they are using it as well as, more specifically, how it can
support business objectives (Stockdale et al, 2012). In addition, they must also consider the
resources required in implementing and using the various platforms, and how they will be able to
measure if the adoption of such media allows them to achieve the business goals intended.

Measuring Return of Investment (ROI) of Social Media

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The social media measurement conundrum has sparked much debate in recent times, as more and
more companies adopt the use of social media platforms to take their products or services online.
Calculating this investment can be a complex task but any business which fails to do so will
jeopardise their ability to demonstrate the full rewards of its use.

Social media is different from traditional means of face-to-face and online communication, and
therefore requires a different approach to measurement. Measuring the business value from IT has
traditionally been problematic and this extends to social media (Stockdale et al, 2012; Geho et al,
2011; Sixsmith and Angel, 2011; Fischer, 2009). While the impact of traditional online activity can be
measured using defined quantitative metrics, social media generates a huge amount of qualitative
data which traditional metrics alone do not address or quantify in monetary terms (Stockdale et al,
2012; Sexsmith and Angel, 2001; Crawford & Pollack, 2004, in Mangiuc, 2009; Fisher, 2009).
Therefore there is no single way to measure the financial impact of social media and so ROI remains
uncertain (Divol et al, 2012).

The key to unlocking the true value of social media “hinges on conversions” (Blanchard, 2011, p.
221) which may require “the ability to track the tone, perception and nuances” (Owyang and Toll,
2007) making it extremely difficult for organisations to measure and quantify.

Some argue that the value or return on investment (ROI) of social media cannot be measured at all
since the social media platforms are all about ‘people’ and not ‘money’ (Taylor, 2011; Bughin and
Chui, 2010). The traditional equation used to measure and demonstrate ROI as a percentage is:

ROI = (investment gain – investment cost) / investment cost

 Relating this formula to the use of social media implies that the gain and cost of its use must be
established. Blanchard (2011, p. 210) maintains that financial gains “manifest themselves in two
ways: cost reductions and increased revenue” and argues that every resource assigned to a project
has a monetary value, which typically falls into one of four categories: personnel, technology, time
and miscellaneous.

Although it can be argued that only financial gains can be measured in monetary value, nonfinancial
gains from social media may be equally beneficial resulting in a range of rewards such as better
communication with customers, brand awareness, etc. However, although these may be
advantageous for any business, measuring such intangible benefits is problematic. While metrics
such as ‘an increase in Facebook friends’ or ‘an increase in Twitter followers’ do not necessarily
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relate to increased sales, it is clear to see that a company’s presence across the social media
platforms can ultimately lead to financial gain. Taylor (2011) argues that social media by itself has
no value and you can only measure the business results achieved through the application of social
media. Further to this, Blanchard (2011, p. 221) argues that “changes in these nonfinancial
outcomes can be interpreted as the manifestation of shifts in familiarity, alignment, preference and
finally purchasing habits” and, as a result, “at the end of the line, nonfinancial outcomes are
converted into financial outcomes”. But associating an increase in sales directly to social media
activities becomes complex as businesses may have to “both prove and attempt to disprove cause-
and-effect and correlation” (Blanchard, 2011, p. 226).

Currently, the state of social media measurement remains “less than satisfactory” (Hoffman and
Fodor, 2010) with the measurement issue still being “quite immature” (Murdough, 2009). The
measurement problem can be linked, in part, to the lack of a measurement standard which makes it
impossible for organisations to prove that any investment in social media technologies has resulted
in a direct profit or loss (Divol et al, 2012; Manguic, 2009). Despite reported successes, the ongoing
measurement debate shows there is a need for SMEs to adopt a transparent, standardised yet
flexible measurement framework. “Without a set of measurable results, there is no proof that the
technologies were well chosen and efficiently employed” (Mangiuc, 2009).

Planning Social Media

Current literature highlights how vital a comprehensive planning process is to the success of social
media adoption if it is to result in a positive return on investment (Stockdale et al, 2012; Nair, 2011;
Sexsmith and Angel, 2011; Bernoff and Li, 2008; Constantinides et al, 2008). Planning should not
only address the objectives for social media use such as engaging with customers and setting
 expectations, but also how a company will measure the economic value and business benefits. As
Hoffman and Fodor (2010) argue “the question is not whether to blog or tweet, but what objectives
need to be achieved and which set of tools with their corresponding metrics can best achieve them”.
Once an organisation has a strategic framework and has set goals, objectives and metrics, only then
will they be in a position to choose the appropriate social media (Bernoff and Li, 2008).

Objectives and metrics:

For a business to understand the true value of social media, there are many aspects of its use which
can be measured as well as many different ways in which to measure. However to make
measurement meaningful, it must relate back to the original objectives social media was intended
for. The following table indicates some examples of objectives which the implementation of social
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media can achieve as well as metrics which can be used to measure their attainment.

Objectives Examples of Metrics

Improve Customer Service • Track level of positive/negative comments
• Analyse sentiment of customer comments
• Measure time taken to resolve a customer service request
Increase Sales • Analyse sales volume by product, categories, location
• Monitor landing pages/click-throughs that lead to purchase, from
specific social media platforms
Improve Brand Awareness • Analyse volume of mentions across channels eg count the
number of likes, visitors, followers, brand mentions
• Track level of positive/negative comments
• Analyse sentiment of comments
• Analyse sources of comments
• Ranking in search engines
Reduce Costs • Track change in costs
• Benchmark number of customers reached through specific social
media campaigns compared to other campaigns
Improve promotion of • Assess customer feedback via social media channels
company products/services • Number of page views
• Number of RSS feeds
• Number of comments
• Track level of positive/negative comments
• Analyse sentiment of comments
Building relationships with • Amount of user-generated content
business contacts/ • Track number of followers/subscribers
customers • Track number of unique visitors/regular visitors
• Analyse sentiment of comments
• Analyse source/quality of authors
increasing volume of traffic • Number of incoming links
to website • Number of visitors
• Monitor landing pages/click-throughs from specific social media
platforms
 • Ranking in search engines

Table 1: Examples of Social Media Objectives and Metrics.

From the table it can be seen that there are a variety of ways in which social media can be measured
and a mix of both qualitative and quantitative measurements are required to fully comprehend the
fulfilment of an objective. Therefore, social media measurement must move beyond merely using
past traditional conversion metrics as it is not enough for organisations to focus solely on metrics
such as the gross number of participants, comments etc as these tallies mean little (Filisko, 2011) as
they are largely “ill-suited to the interactive media environment”. Instead social media metrics
should address the distinct characteristics of social media (Hoffman and Fodor, 2010) and should
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blend quantitative metrics with important new elements such as sentiment, level and quality of
engagement (Divol et al, 2012; Weismann, 2009; Bernoff and Li, 2008). In addition to the blend of
metrics required, measurement should also extend across the organisation which requires co-
ordination of “data, tools, technology and talent across multiple functions” (Divol et al, 2012)

The Internet Advertising Bureau (2011) adds a further dimension by suggesting that soft metrics
such as number of visitors must be combined with hard, financial metrics such as cost per lead, cost
per engagement, before the activity can be fully assessed for its worth. But there is also a strong
argument to suggest that it is impossible for qualitative data to be expressed in monetary units
when conversational data may be ambiguous or subject to misinterpretation. It has been suggested
that this data should instead be identified, carefully examined and described in high-level detail
(Mangiuc, 2009) in order to support the primary quantifiable data used to calculate an organisation’s
social media ROI. The richer set of data which analytical tools can provide gives an organisation the
ability to correlate their specified metrics (Weismann, 2009) which can help to demonstrate the ROI
of their social media efforts.

However, in order to avoid ‘analysis paralysis’ it may be important for organisations to focus on
having only a few metrics for each business objective to keep evaluation as simple as possible
(Murdough, 2009). Keeping metrics simple and flexible will allow the primary focus of the
organisation to remain on the business objectives and not to divert efforts overwhelmingly into
measurement and analysis (Stockdale et al, 2012). The next section will explore some of these
analytical tools.

Social media analytical tools

 There are a growing number of analytical tools which enable companies to gather data and measure
the impact of social media on their business processes. Many social media platforms offer their own
built-in analytical services such as Facebook Analytics, Twitter Analyser and YouTube Analytics which
provide information on traffic and popularity such as the number of followers, likes, comments, etc,.
Other tools provided by search engines such as Google Analytics and Google Alerts can be used to
analyse site traffic and the amount of times a brand, company or product has been mentioned.
Other proprietary software exist which can report on the fuller impact of a company’s social media
investment across a variety of social media platforms. For example Radian6, Alterian SM2 and SAS,
not only provide statistical information but also attempt to analyse sentiment and interpret the tone
of conversation.
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It is vital that businesses ensure that any analytical tool they consider using is equipped to address
their pre-set objectives and metrics. One of the main criticisms of analytical tools is that they do not
fully address the fact that people using social media are indeed conversing with one another, and
instead most tools try to quantify the effects by addressing more easily measured factors such as
page views and unique site visitors (Fisher, 2009). Indeed, the relatively low number of emerging
tools that can track conversation effectively suggests that providers are not yet recognising the
potential of such tools, or that organisations are slow to make the transition away from traditional
metrics. Also, until semantic technologies can overcome or understand cultural and regional biases,
these tools may have limited use so organisations may have to be prepared to spend time listening
to and self-reporting on the qualitative data which is so vast across the social web. In addition, some
of the most comprehensive tools are often too expensive for SMEs.

Thus far, the paper has synthesised current literature regarding the use of social media, the
complexities involved in measuring the ROI of social media; the need for SMEs to follow a planning
process; identify social media objectives and metrics; and carefully select suitable analytical tools.
The next section will describe the research method which has been adopted to further explore the
reasons why SMEs are adopting social media and will particularly focus on how SMES are actually
using and measuring the ROI of social media in practice. This will be followed by analysis and
discussion.

Research Method

Research involved a questionnaire survey designed to gather background information about each
SME, the social media that they use and perceived usefulness, the SME’s objectives for using social
media, the benefits they attribute to social media and methods that they use for measuring those
 benefits. Scottish SMEs were invited to complete the questionnaire in a number of ways: direct
email, articles in local newspapers, newsletters, as well as promotion through social media (namely,
Twitter, Facebook and LinkedIn). The survey was distributed and analysed through Survey Monkey.
In total, 116 online surveys were completed, however 10 were completed by non-SMEs (more than
250 staff) so are not included in the following results.

Survey Results

The results of the questionnaire survey are outlined below:-

Size and type of company:

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Responses came from a range of companies: 26% were from sole traders; 37% employed 1-9 staff;
16% employed 10-19 staff and 21% employed more than 20 staff. The type of company was also
very wide ranging and included IT consultancy, graphic design, hairdressing, childcare and legal
companies. Most companies were well established with 41% being in existence for over 10 years
and 27% from 5-10 years. Only 9% were new companies trading for less than a year.

Types of social media:

Respondents were asked to identify the types of media used. The most commonly used were:

Facebook 74%
Twitter 81%
LinkedIn 70%
YouTube 29%
Blogs 37%`

Other media such as wikis, podcasting, social bookmarking and Slideshare were provided as options
but identified as not commonly used.

Of the media used, companies were asked their opinion on the usefulness of the media for their
company. The most useful identified was Twitter (82% of respondents who used Twitter found it
useful or very useful); followed by LinkedIn (76% of respondents who used LinkedIn found it useful
or very useful); blogs (75% of respondents who used blogs found it useful or very useful); YouTube
 (67% of respondents who used YouTube found it useful or very useful) and Facebook (64% of
respondents who used Facebook found it useful or very useful).

Use of Social Media/Social Media Objectives:

Respondents were asked why their SME originally considered using social media and responses
indicated:

Wanted to experiment with social media 61%

Competitors were using social media 31%
Customers using social media 45%
As a result of staff attending training/awareness session 21%
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Staff knowledge of, and desire to use, social media in work-related capacity 45%

The most common reason for starting to use social media was a desire to try experimenting with the
social media (61%) followed by 45% of the respondents recognising that their customers were using
the social media or had staff who had the knowledge and desire to use social media in a work-
related capacity.

When asked if the respondents had a primary reason for using social media - 82% of respondents
indicated that they had a primary reason(s). These predictably included elements such as raising
awareness of the company and their products/services, building relationships with customers,
driving the business forward and reaching a wider audience.

Other identified objectives included:

• Engage/interact with customers and other companies

• Showcase business, products and services
• Attract interest and awareness of SME
• Increase brand awareness
• Increase volume of traffic to SME’s website
• Indirectly increase revenue
• Answer queries and give advice
• “establish voice of authority, reputation and respect”
 There were a range of benefits identified as arising from the use of social media as indicated in
figure 1:
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Figure 1: Benefits of Social Media

The main benefits identified from the use of social media were increasing brand awareness (79%);
better communication with customers (67%); better communication and marketing of
products/services (64%); better ability to showcase company expertise (63%); gain more business
contacts (58%).

Measurement of social media:

However, although SMEs identified many benefits achieved through the use of social media, 65% of
the companies involved indicated that they did not measure the benefit gained from its use. The
35% who did measure the benefit were asked what benefits they measured and how they measured
them. A very wide range of answers were received, including qualitative and quantitative. The most
common responses were:

Quantitative:

• Number of contacts, followers and enquiries that have come through social media
 • No of visitors through eg Facebook diagnostics, number of hits on YouTube channel
• Number of likes/comments on Facebook
• Number of clicks, follows and responses; retweets
• Number of bookings and referrals received via social media,
• Sources of traffic to website

Qualitative:

• “Informally, by observation”
• What comments are saying and what it means for business
• Views of promotions
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• Brand awareness

One company revealed that they “use qualitative more than quantitative measurements” but “it is
hard to say if they result directly in sales”. While another added “it’s not just about looking at sales,
it’s also about building relationships”.

Some of the tools used for measurement included:

• “use metrics provided by each social media platform”

• Google Analytics
• Klout
• CrowdBooster
• How Sociable
• Visiblie
• Salt Social
• Bit.ly analytics

Furthermore, out of the 35% of overall respondents who did measure the use of social media, some
of these revealed that they did not use formal measurement techniques and that they used “more
of a hunch if it’s working or not”.

The following section will discuss the results of the questionnaire survey and relate these results
back to the earlier review of literature.

Discussion:
 The results gathered from this research indicates that SMEs find value in certain types of social
media such as LinkedIn, Twitter and Facebook while other media such as wikis and podcasting are
not as useful in a business capacity. SMEs believe social media is very important for the business
and introduce it to build relationships with customers, increase brand awareness, showcase
expertise and gain new contacts. The uses of social media found from this research are largely
similar to those highlighted by Divol et al (2012); Stockdale etal (2012); Nair (2011) etc.

However, although the SMEs involved in this survey state that social media is useful and valuable to
the business, 65% of those involved did not measure the benefits gained from its use or the return
on the investment on time spent setting up and using the various media. This could be attributed to
the complexities involved in measurement of social media (Stockdale et al, 2012; Geho et al, 2011,
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Sexmith and Angel, 2011; Fischer, 2009) and that there is no one single method of measurement
(Divol et al, 2012). ROI of social media can include various measures such as qualitative or
quantitative data; informal or formal methods; tangible or intangible benefits. The enormity and
complexity of the measurement exercise may therefore be beyond the resources of many SMEs. Of
the 35% of SMEs that did measure social media, a wide variety of tools and methods were adopted
but in a rather inpromptu manner. There was little evidence of SMEs adopting a strategic or
systematic approach to their use and measurement of social media.

These results indicate that although SMEs believe that social media can be used to benefit their
business, they do not have full evidence of this and are not fully aware of the extent (if any) of the
benefit. Through more detailed planning of the use, implementation and measurement of social
media as indicated by Stockdale et al (2012); Nair (2011); Sexsmith and Angel(2011); Bernoff and Li
(2008); Constantindes et al (2008), SMEs could use the media more effectively and be more
confident that the effort expended is worthwhile and effective. Therefore, planning and evaluation
models are required for SMEs to more effectively plan social media use and measure the actual
return on investment of social media.

Social Media Models

Many of the models suggested for social media ROI evaluation (eg Hoffman & Fodor, 2010;
Murdough, 2009), despite their different structures, have one thing in common: they agree that
clearly defined goals, objectives and metrics have to be agreed upon prior to an organisation’s entry
into the social media arena and that these should drive any decision on which social media platforms
and analytical tools an organisation should use to measure and deliver results. As such,
 organisations should know what they hope to achieve through their social media endeavours before
they enter into the social media environment.

In today’s dynamic, ever-changing business environment, it is likely that a flexible model is needed in
order to meet the measurement needs of organisations with a presence on the social web
(Stockdale et al, 2012). Adopting the use of one particular model may or may not be suited to the
needs of a particular organisation. In this regard, and until a more adaptable model is developed
and accepted, organisations must be prepared to be flexible in their use of existing measurement
frameworks.

Nair (2011) for example, sees social media usage as an experimental process, the results of which
should not be measured up front. Murdough (2009) similarly suggests that companies should
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“calibrate expectations, and then get out there and see what happens”. Indeed, until more
companies, whether small, medium or large in size report on both the benefits realised from their
social media investments and more specifically on how they measured these benefits, an
organisation’s social media venture will have a deal of experimentation attached to it.

SMEs should formulate an effective social media strategy, – which they believe “drives consumer use
of social media”. By doing so, companies can develop a “consumer-oriented framework for
evaluating social media” which will ultimately “lead to higher ROI because the company’s marketing
investments can better leverage the active “investments” its customers will make as they engage
with the company’s brands” (Hoffman and Fodor, 2010).

One of the main criticisms of existing models is that they appear to be over-complicated, presenting
a very complex entry, management and measurement process. For example, Hoffman and Fodor
(2010) advise companies to pay attention to four key motivations – connections, creation,
consumption and control. Murdough (2009) on the other hand offers a social media measurement
process life-cycle model which identifies the importance of articulating key goals, objectives and
metrics before deciding which platforms to use and leverage to support objectives. He further
argues that companies should measure against three performance pillars: reach, discussions and
outcomes which social media insight and analytical tools can measure and report on. The end result
is a performance dashboard, presenting the results from one or more platform.

These models highlight the importance of planning and suggest various stages in a company’s social
media life-cycle, but they tend to do so in an extremely academic fashion. It could be argued that
these models are designed around the needs of larger organisations. It is easy to understand why
 this would be the case, since it is mainly the larger organisations who are reporting on their social
media success and thus driving model development.

As social media evolves, so too must an organisation’s management and measurement activities. A
more flexible model is required which is both easy-to-understand and extremely adaptable,
highlighting the essential steps to successful measurement. Such a model would be relevant and
useful to all organisations regardless of size, experience and expertise, and could revolutionise the
measurement process and empower SMEs to start reporting on their social media success. In
addition, by using such a model SMEs would be encouraged to adopt a more strategic focus when
planning, implementing and measuring social media.

Recommendations
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An overarching framework that provides direction for SMEs to measure ROI of social media is
outlined in Figure 2 below. The framework consists of three main stages: planning; implementation;
and evaluation. The planning stage should involve setting goals, defining objectives and outlining
suitable metrics for measuring the impact of social media. The second stage entails implementing
appropriate social media tools (depending on goals, objectives and metrics identified in previous
stage), implementing methods for analysing social media (this may incorporate specific analytical
tools and/or interaction and monitoring by specific personnel) and ongoing measurement of the
quantitative and the qualitative aspects of social media. The third stage is the evaluation of both
short-term and long-term benefits and an assessment of the longer-term ROI. The benefits will
involve quantitative and qualitative benefits and by breaking down the benefits into shorter
identifiable chunks it will be easier to ascertain the longer term benefit.
 PLANNING STAGE
Formulate Define Outline
Goals Objectives Metrics

IMPLEMENTATION STAGE
Measure Quantitative Aspects of Social
Implement Methods for Media (ongoing)
Appropriate Analysing Social
Social Media Media Measure Qualitative Aspects of Social
Tools Media (ongoing)

EVALUATION STAGE
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Evaluate Short Evaluate Long Evaluate ROI

Term Benefits Term Benefits

Figure 2: Measurement of ROI of Social Media

This model is fairly simplistic and can be applied to organisations of all sizes whilst being flexible
enough to be able to be adapted to meet the needs of specific organisations. The process of
measuring ROI should be an ongoing process that involves going back to the planning stage and
revisiting the goals, objectives and metrics or the implementation stages and revising which social
media tools or methods for analysing social media use are appropriate to use.

Conclusions and Future Research

In conclusion, the ever-changing and complex social media environment requires organisations to
plan their social media investments with care. Organisations must understand the area of business
which they want to address, formulate measurable goals, objectives and corresponding metrics
before deciding which social media platforms are most suitable to leverage these. Before entering
into the social media environment, companies should ‘listen’ to what is being said about their
company’s brand, as this can help drive appropriate goals and may inform the timing of entry into a
particular environment. Importantly, as social media demands a long-term investment and as social
media is all about ‘people’ and ‘relationships’, organisations should be prepared to participate in
dialogue and open conversation, and spend time developing effective relationships with customers
in order to ensure positive outcomes. Social media measurement is in many ways “highly subjective
and completely unique to the interpretation of the entity doing the measuring” (Owyang and Toll,
2007). The sentiment or tone of some content could be “misconstrued by analysis that evaluates
 language too literally, or by an audience or reader whose interpretation can be subject to regional or
cultural biases” (Owyang and Toll, 2007). In undertaking to measure ROI, the focus on financial
returns must not be lost, although the benefits associated with intangible conversation and
participation can lead to future returns.

Most existing research on business use of social media is related to large organisations and doesn’t
specifically address SMEs (Bulearca and Bulearca, 2010; Stockdale et al, 2012; Derham et al, 2011;
Chua et al, 2009) In addition, it tends to be focused on the technical, user, social and commercial
use of the various applications rather than adopting a strategic focus (Bulearca and Bulearca, 2010;
Constantinides et al, 2008; Mehrtens et al, 2001) or examining the value gained by the adoption of
such applications. This research study has focused specifically on SMEs and has developed a
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framework which will allow them to plan their use and measurement of social media and take a
more strategic perspective. SMEs are under growing pressure to employ technology effectively in
order to survive (Montazemi, 2006) therefore it in increasingly important for them to utilise social
media optimally.

Further research is required to explore the effectiveness of the recommended model outlined in the
previous section in relation to SMEs, and to evaluate what works well and not so well, and the
reasons why. Industry specific research may also be valuable to explore how ROI is measured,
conversation is monitored and organisations’ participation in social media for specific types of
companies and within particular industries. Indeed, SMEs may find particular aspects of the model
more easily attainable, or more difficult to implement and further refining the model will serve to
improve the understanding of commercial social media use.

Acknowledgments (if applicable):

With thanks to Michael Bromby, David Broom, Glasgow Caledonian University and Gary Ennis, NS
Design.
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