The Rough Road to ROI
The industry agrees that engaging in social media is a must, but it is only starting to look at the cost of--and return on--the investment.
By Erika Schnitzer, Managing Editor
Social media in multifamily can have a number of intentions. It can be used for acquiring new renters, retaining existing residents, developing a brand and/or increasing customer interactions. But, thus far, it has been nearly impossible to measure results.
“Anything that anybody does for brand advertising is always challenging to measure results,” points out Donald Davidoff, senior vice president, strategic systems, at Archstone.
Unlike other aspects of the industry, determining ROI on social media efforts doesn’t seem to be a top priority. “Asking for an ROI on a Facebook page might be roughly the same as asking the ROI on a community newsletter,” asserts Steve Lefkovits, producer of the AIM (Apartment Internet Marketing) conference. “Regular communication is obviously important to a healthy relationship. I try to talk to my wife every day, but there’s no ROI on that; it’s just part of being in our relationship. It’s the same for property managers.”
Rich Hughes, vice president of revenue management at AMLI Residential, however, believes “social media should be subject to the same scrutiny that you’d subject any other marketing channel [to]. It’s at the stage of the lifecycle now where we need to be able to say, ‘Okay, the creativity is great; let’s start seeing some traction and some results.’”
Challenges of measuring the impact
Darcey Forbes, director of marketing and communications at Essex Property Trust, spoke at this year’s AIM conference about “Resolving the Data Controversies.” But even she admits that measuring results from social media efforts can be challenging.
“Facebook measurement has been this difficult challenge because of the fact that you don’t have any real measurable data that you can tie back into, if you want to talk about leads and leases,” she says. “There’s no real metric that we’ve defined, except for the fact that we feel that it is a platform we want to participate in and have people join in on the conversation,” she adds.
“There’s got to be some way to follow all of that through; it’s just up to us to define what measurement of success we would want out of it,” she points out. “I’m not going to expect the same results as I do from my major ILSs, but I have to be fairly certain that the efforts that we put forth are going to support the other advertising that we have in place.”
Of course, with Facebook’s improved visibility into insights concerning how many people viewed and/or liked a page, tracking may become easier. But for now, Forbes believes it remains useful as a tool for “creating a fan base and getting people to participate on [our] page.”
Some companies, such as RentMineOnline, are able to measure the cost of new customer acquisitions from Facebook referrals, for example, points out Lefkovits. “Their customers are really enthusiastic, both about the trackability and the fact that they’re able to use a targeted tactic on Facebook that actually drives leases.”
While Forbes has yet to identify, for example, whether her team’s Facebook postings has had any directly resulting leases or renewals, she points out that a growing fan base is a strong indicator that people are interested in the community. “I think it’s a part of the cross-shopping that’s inherent in the industry today,” she adds.
Davidoff points out that while managers may be unable to determine an exact ROI number, it could be possible to test whether or not engaging in social media is, in fact, effective. He suggests looking at properties that are posting aggressively on Facebook, for example, comparing them to sister properties that aren’t. If one has a better renewal percentage than another, therein lies the answer—sort of.
“You could say the people who are posting are also more open and aggressive, so it might not 100 percent prove it,” Davidoff notes, “but if you have five properties where community managers are posting regularly and five where they’re not, if you find that the renewal rates aren’t any better, then that sure tells you something.”
Lefkovits, meanwhile, doesn’t think determining a discrete ROI is necessary. For example, the ROI on e-mail has never quite been determined.
“Part of the discussion of what’s the ROI on something is fear,” he asserts. “Many people seem to need to figure out a way to justify a particular tool. If you let yourself get caught [up] in that, you can refrain from ever innovating,” he says.
Hughes, however, believes social media can, in fact, be measured, but the motivation behind using social media needs to be defined. Whether it’s looking to attract new residents or better employees, or whether social media is being used “to engender a digital community that will fortify the physical community that we operate,” it’s important to have an objective, says Hughes. “[If we] parameterize what the tools, objectives and measurable outcomes are, then I think we can measure [the outcome].”
In doing so, he suggests writing a causal narrative. “We want to make more money; we make more money if we have more or better-paying residents. If we have more or better-paying residents, they might be happy residents that elect to [renew].”
“You can work backwards from your outcome all the way down the causal chain to the start of your initiative and set interim goals, which might not be hard-dollar goals,” add Hughes. “Say you were to measure resident satisfaction within the framework of social media; I think you can make the case that happy residents like to stay—and so you’re more likely to make money.”
An industry benchmark
Hughes also points out that the social media platforms have begun reporting on certain metrics, such as the number of views and/or number of retweets, for example. But this is not enough. “We have to decide, with these metrics, [whether] we want to normalize them on a per-unit basis so we can start doing apples to apples. Are they homogenous across social platforms and by property and community type? Can we roll them up into some sort of meta measurements that maybe are a bit more insightful than just the aggregate metrics?”
At the 2011 NMHC Apartment Operations and Technology conference, a roundtable, moderated by Lefkovits and comprised of AMLI’s Hughes, Archstone’s Gary Redmond and Lisa Trapp from Sequoia Equities, began the dialogue around creating an industry-based measurement model, understanding that a benchmark would be impossible without the industry getting involved.
“In a lot of other domains of our business, we like to measure and compare against our peers,” points out Hughes, who credits Misty Browning, AMLI’s national marketing manager, as the architect of the company’s social media strategy. “When you measure, you get to see how you’re doing now, you get to see the change in how you’re doing over time, and how you do relative to your peers,” he explains.
“If we, as an industry, can all collectively decide what we think is important in the social arena, then there’s no reason why we can’t benchmark versus peers and compare information,” adds Hughes.
The standard thus far includes some proposed measurements, explains Lefkovits. The gross views measurement represents the number of times users were exposed to the property management company’s brand via social media channels. Some of the metrics that go into the calculation include (on a per-unit basis) Facebook page views, blog page views, YouTube channel views, YouTube video views, Twitter views and Yelp views.
Connections, adds Lefkovits, is a calculation of anyone who has explicitly expressed an interest in the company, whereby the user is now involved in a conversation. Some of the metrics under this calculation include—again on a per-unit basis—blog subscribers, Facebook fans/likes/check-ins, Twitter followers, YouTube friends and subscribers, Foursquare check-ins and Yelp bookmarks/check-ins.
Finally, audience engagement measures how actively the audience engages with the property management company. Some of the key metrics that go into this calculation include blog comments per post, Twitter retweets, Facebook interactions (likes and comments) and YouTube interactions.
Despite this, “no one has the answers yet,” points out Lefkovits. “This is a discovery process, so all input from all facets of the industry are welcome. Our goal for this session at NMHC [was] simply to begin a discussion and see where it takes us.”