Four of the Most Useless Social Media Metrics to Avoid
Social media is no doubt filled with big egos and empty metrics. While I am a huge fan of social media metrics analytics, I find it somewhat frustrating with those who tout pointless social media metrics to measure.
With social media, it is important to know what social media metrics matter and which ones don’t. I am not saying that you should completely dismiss the metrics I discuss below, but you should take them lightly and understand how they impact the overall picture.
Let’s take a look at 4 of some of the most overrated social media metrics and what you should focus on instead.
I might as well start this list of with the most pointless social metrics of them all. Klout “measures” a users social influence and determines a score that falls within the range 1-100.
The higher the Klout Score, the more influence a person is said to have. While I understand the concept, unfortunately it is rather easy to influence/inflate Klout Scores. Therefore, I just can’t justify Klout as being a social media metric to give much credibility to. I will say, that I have enjoyed a few nice perks from Klout due to my Klout Score.
2. Number of Social Shares
Twitter Retweets, Facebook Likes/Shares, LinkedIn Shares, Pinterest Pins, etc. are not the social metrics you need to be focusing on. Sure, it means someone is sharing your content and increasing your brand visibility. But are those shares driving traffic to your website? Maybe a little.
I bet if you looked at the number of social shares for each channel and compared it to your Google Analytics data, chances are that the shares far outweigh the number of visits from that source. A large number of people share a link without actually reading it.
Therefore, concentrating on social shares is somewhat misleading if you are looking to social channels for traffic generation. You should be focusing on the number of visits referred to your site through a social channel instead.
3. Traffic From Social Media
While this definitely conflicts with the advice I recommend above, I think it is something that should also be looked at a little closer.
Not all traffic is created equal. In fact, of the website visitors you get from social media, do they visit more than one page of your website? Do they subscribe to your RSS or signup for your newsletter? Do they submit a contact form?
Basically, do they do anything that will ultimately increase your bottom line?
To really know, I would recommend tying Google Analytics goals to social media traffic to fully understand the value of the traffic and results of your efforts.
4. Number of Followers, Fans, Etc.
There is no denying that social media is a numbers game. The larger your follower base, the more people you can potentially reach. However, to really grow these numbers it takes time if you are doing it right. Even when you try to do things right, your profiles can fall victim to fake social media accounts.
Not only do you have to worry about fake social profiles, but what happens when one of the social sites you spent so much time on has become the next Myspace?
The social vanity metric you spent so much time on growing is now irrelevant. A better approach than measuring the total number of fans would be to attribute meaningful goals achieved as a result of your social audience. For example, track the number of newsletter signups or users who downloaded a guide that occurred from a social channel. These type of actions have more of an impact on your bottom line since they are showing signs/interest in what you offer and are ultimately moving further down your sales funnel.
Social Media Metrics Are Important
There is no doubt that social media metrics are important. You definitely need to measure the results of your initiatives. However, you need to be sure that you are measuring social media metrics that matter.
For example: You had 100 new Facebook Fans this month?
So what? Did they engage with your posts? Click through and visit your site?
You had a tweet that was retweeted 1000 times?
How much traffic did it result in and did that traffic convert a goal on your website?
While the 4 social media metrics listed above might seem pointless at a high level, you can see by digging deeper into each one of them you can find meaningful data to track. Data that means something. Data that helps your business focus on social media lead generation. Ultimately, data that can show an impact on your bottom line.
What Social Media Metrics Do You Focus On?
When measuring the success (or failures) of your social media initiatives, what are the core metrics that you focus on? What metrics do you wish you had more insight on? What do you find difficult to measure?
Alternative Beta Strategies: Alpha/Beta Separation Comes to Hedge Funds
Written by: Yazann Romahi, Chief Investment Officer of Quantitative Beta Strategies, J.P. Morgan Asset Management
A quiet revolution is taking place in the alternatives world. The idea of alpha/beta separation has finally made its way from traditional to alternative investing. This development brings with it a more transparent, liquid and cost-effective approach to accessing the “alternative beta” component of hedge fund return and a new means for benchmarking hedge fund managers.
The good news for investors is that the separation of hedge fund return into its components—rules-based alternative beta and active manager alpha—has the potential to shift investing as we know it. These advancements could democratize hedge funds and, at long last, make what are essentially hedge fund strategies available to all investors—even those who aren’t willing to hand over the hefty fees often associated with hedge fund investing.
A benchmark for alternatives
With respect to traditional equity investing, we have long accepted the idea that there is a market return, or beta—but this hasn’t always been the case. Investors used to assume that to make money in the stock markets, one needed to buy the right stocks and avoid the wrong ones. The idea of a market return independent of skilled stock selection seemed ridiculous to most market participants. Yet today, we would never invest in an active manager’s strategy without benchmarking it against its respective beta.
Interestingly, hedge fund managers have been held to a different standard. Investors have been much more willing to accept the notion that hedge fund strategy returns are pure alpha, and that their investment returns are based entirely on the skill of the fund manager. That notion explains why investors have been willing to accept a “two and twenty” fee structure just to access what has been perceived as one of the most sophisticated and powerful investment vehicles available.
In thinking about the concept of beta, consider its precise definition—the return achievable by taking on a systematic exposure to an economically compensated risk. In traditional long only equity investing, the traditional market beta has been further refined as a number of other risks have been identified that are commonly referred to as “strategic beta.” These include factors such as value, momentum, quality and size. But no one ever said that these risk factors must be long-only.
Over the past decade, as more hedge fund data became available, academics began to disaggregate hedge fund return into two components: compensation for a systematic exposure to a long/short type of risk (alternative beta), and an unexplained “manager alpha.” What they found is that a significant portion of hedge fund return can be attributed to alternative beta. That fact has turned the tables on how we look at hedge fund return. With the introduction of the alternative beta concept, hedge fund managers will have to state their results, not just in terms of total return, but also as excess return over an alternative beta benchmark.
Merger arbitrage—an alternative beta example
The merger arbitrage hedge fund style can be used to illustrate the alternative beta concept. In the case of merger arbitrage, the beta strategy would be the systematic process of going long every target company, while shorting its acquirer. There is an inherent return to this strategy because the target stock price typically does not immediately rise to the offer price upon the deal’s announcement. This creates an opportunity to purchase the stock at a discount prior to the deal’s completion. The premium that remains is compensation to the investor for bearing the risk that the deal may fail.
Active merger arbitrage managers can add value by choosing to invest in some deals while avoiding others. Therefore, their benchmark should be the “enter every deal” strategy, not cash. In fact, the beta strategy explains the majority of the return to the average merger arbitrage hedge fund. And it doesn’t stop there. Other hedge fund styles that can be explained using alternative beta include equity long/short, global macro, and event driven. Note that the beta strategy invests in the same securities, using the same long/short techniques as the hedge fund strategy. The difference is that the beta strategy is a rules-based version that can become the benchmark for the hedge fund strategy. After all, if a hedge fund strategy cannot beat its respective rules-based benchmark (net of fees), an investor may be wiser to stick to the beta strategy.
Implications for investors
What does all this mean for the end investor? Hedge funds have traditionally been the domain of sophisticated investors willing to pay high fees and sacrifice liquidity. Alpha/beta separation in the hedge fund world means that investors can finally choose whether to buy the active version of the hedge fund strategy or opt for the passive (beta) version. Hedge fund strategies can be effective portfolio diversifiers. Now, through alternative beta, virtually all investors can access what are essentially hedge fund strategies in a low cost, liquid, and fully transparent form. For investors who haven’t had prior access to hedge funds, this could be welcome news. Not only can investors look at an active hedge fund manager’s strategy and determine how it has done compared to the systematic beta equivalent, they can also invest in ETFs that encapsulate these systematic strategies.
When looking at one’s traditional balanced portfolio today, there are plenty of questions around whether the fixed income portion will achieve the same level of diversification it has provided in the past. After all, with yields still low, there is little income return. Additionally, the capital gains that came from interest rate declines are likely to reverse. With fixed income unlikely to adequately fulfill its traditional role in portfolios, there is a need to find an alternative source of diversification. This is where alternative strategies may help. For investors seeking to access diversifying strategies in liquid and low-cost vehicles, alternative beta strategies in ETF form are one option.
Looking for an alternative to enhance diversification in your portfolio?
For investors looking to further diversify their overall portfolio, JPMorgan Diversified Alternatives ETF (JPHF) seeks to increase diversification and reduce overall portfolio volatility through direct, diversified exposure to hedge fund strategies using a bottom-up, rules-based approach.
Learn more about JPHF and J.P. Morgan’s suite of ETFs here.
Call 1-844-4JPM-ETF or visit www.jpmorganetfs.com to obtain a prospectus. Carefully consider the investment objectives and risks as well as charges and expenses of the ETF before investing. The summary and full prospectuses contain this and other information about the ETF. Read them carefully before investing.
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