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Wednesday, May 14, 2008

Model to Measure Blogging ROI

In 2007 Forrester released a new research that offers a roadmap for measuring the risks vs. the potential return for starting a corporate weblog. The most frequently mentioned benefits of corporate blogging were: greater brand visibility in mainstream media on the Web, word of mouth, improved brand perception, instantaneous consumer feedback, increased sales efficiency and fewer "customer service-driven PR blowups."

When measuring impact, they advise using metrics that everyone is familiar with and then to associate each with a dollar value that quantifies the benefit. One idea that they outline is to estimate how much the company would have to pay to achieve a similar outcome.

How to quantify and assign value to the key benefits of blogging:

Benefit

Metric

Value (Cost of alternative)

Blog traffic

# of unique visitors, # of page views

cost of ad in similar content channel

Press mentions

# of blog-driven stories by offline press, web media or high-profile bloggers

cost of ads in same publication

Search engine positioning

% of search results in first three pages driven by blog

cost of SEO to improve ranking

Word of mouth

# of blog posts in a Technorati blog search, # of people commenting on blog.

cost of hiring a buzz agents

Savings on customer insight

# of useful business insights provided in blog comments

cost of focus group or other market research program

Reduced impact from negative user-generated content (UGC)

# of press stories mentioning UGC, change in NetPromoter score or other attitude metric post-UGC

historical change in sales associated with change in NetPromoter - type metric

Increased sales efficiency

# of clients/prospects who read the blog, # of salespeople who read blog

decrease in the cost of sales

The research firm also put together a model for assessing blog risk: a) identify the three things that could happen, b) model the scenario, and c) estimate its probability. This is very similar to preparing for a crisis in PR and good advice when venturing into a blog program.

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