~ Contributed by John Bastone ~

I read a fascinating piece in this week’s Wired, titled how "Marketers Rig the Social Media Machine.” A cottage industry has been born, catering to the needs of Marketers that are willing to pay for large numbers of followers within a social media property like Twitter. The first minute I read this, I was annoyed, but by the second minute, I really couldn’t see how this was any different than buying lists of names for direct mail and email purposes. The more things change, the more they remain the same.

More to the point, the article highlights a recurring theme in business as it relates to social media. There’s a lot of experimentation going on, with no real plan around actually quantifying the results outside of concepts like # of followers or mentions. Research tells us that many of the marketers, public relations professionals and corporate communications staffs are responsible for the flood of new content in our interconnected world, yet haven’t any idea how to measure the impact of these activities on their own organizations.

The aim of this post is to enlighten. But first, some level-setting around the now ubiquitous, yet abstract term “social media.”

What is social media?

Think for a moment about how you answer this question. What would you tell your mother, father, or other family elder that social media is? It is actually a harder question to answer than you realize, a bit like asking what the internet is to a company, or what a hammer is to a contractor. It really depends on how the tool is used. For an increasingly mobile teenage population, social media is the primary method of broadcast communications among a network of friends and family. For Coca Cola, Social Media can be a channel to conduct a dialog directly with consumers.

For my purposes, social media is an umbrella term encompassing any place where online conversations of relevance to business are happening. Any website displaying public messages could be a social media channel. Sites like Facebook and Twitter have fueled the wildfire consuming endless chatter and speculation on where things are headed today, but the reality is social media has its roots in discussion forums and message boards that pre-date what we know as the world wide web today.

Social Media Analytics

You may be thinking, I understand analyzing numbers, but how in the world can you analyze a conversation?

The reality is that many things can be discerned from digital conversations. Imagine you are Apple. Understanding that David Pogue of the New York Times generates an inordinate amount of chatter around all things Apple factors into his being a consistent early reviewer of Apple products. That’s called influence, and yes indeed, it can be calculated. Now imagine that Apple could understand that 55 percent of complaints on Cnet.com for a specific period of time about the newest iPhone specifically cite AT&T’s “weak signal.” Or that when Steve Jobs posted an open letter basically stating that Flash was dead, 65 percent of commentary on professional media sites worldwide was favorable to his position. The last two examples highlight the role sentiment analysis can play.

To be clear, sentiment analysis does not equal social media analytics, it is far more involved than that.

The approach I recommend for social media analytics consists of three core capabilities: listen, leverage and engage.

1. Listen

The first step in any social media strategy is to listen. It is the series of steps needed to answer the question, “How can I be sure what I’m hearing is accurate and relevant to my business?” But perhaps I am missing an adverb, so let me restate this as “Critically Listening.” I’ll use an analogy most of us can relate to.

When you attend a conference, there are presentations or sessions that you focus your time around, as they relate to topics critical to your profession or your company. Your social media listening strategy should be no different.

But you must take it a step beyond that, categorizing the conversations to align with how you run your business. If you manage the brand, you want to understand the overall perception of your company. If you manage quality, then you could care less about brand, and you really want to know what is breaking that drives your consumers nuts.

Technologies that drive this include web crawlers that can systematically download relevant posts from key sites, and word taxonomies which map key terms extracted from the textual data to the topics businesses need track.

2. Leverage

Listening tells you what is being said, but to leverage it, you need to understand how it is being said.

More specifically, listening might tell a major hotel brand that customers are talking frequently about your hotels on Priceline.com, but to leverage these insights you need to know things like are they positive about the check-in experience and negative about room cleanliness?

You want to pinpoint the tone of conversations visually, seeing the ebb and flow of sentiment in a chart no different than tracking the highs and lows of a stock chart day by day, or even minute by minute.

Among the enabling technologies that drive social media analytics, Sentiment Analysis discerns tone and provides Web-based reporting that can be deployed and manipulated across the enterprise.

3. Engage

Finally, to close the loop, one must engage with the very customers taking the time to speak about your company. If a problem pops up in a forum, close the loop with that forum and within your own company.

Follow-up and follow-thorough are just as appreciated in social media, as they are anywhere else.

Enabling technologies include real-time alerts and workflow that route emerging issues to the appropriate departments in a position to do something with it.

Closing thoughts

No one should try and attack all three phases of social media analytics at once. It should always start with listening. And while it may be obvious to you that social media is here to stay, roughly 1 in 5 marketers still feel that social media has no bearing on their business. None, nada, zip. This despite the fact that an estimated 78 percent of online adults engage in some level of social media behavior, up from 40 percent just 2 years prior.

The question you need to ask yourself is this: What are you doing to help your company refine this information-rich reservoir of insights into the fuel that will accelerate your business?

Because to acknowledge its importance without having some sort of planned action puts you in no better position than the 20 percent of marketers that still have their heads in the sand.