Thoughts on Measuring User Generated Content

I have been reading a lot lately about measuring user generated content, in preparation to take on the role as Moderater for the UGC group of the Web Analytics Association. I keep coming across discussions about measuring audience engagement. People publishing alternative formulas for quantifying audience engagement using bounce rate, recency and frequency as proxies for different aspects of engagement. They are all informative discussions of the alternative means of establishing a metric. They introduce potentially useful new paradigms. And yet, I find myself continually asking - why?

I have to admit that the "audience engagement" metric smells to me like one of those marketing-championed, artificial, qualitative-concept-as-performance-statistic labels like "brand awareness"... Sorry, I am a direct marketer at heart, and I´m all about the conversion ratio - It´s why I love analytics. Brand awareness is mostly a happy side-effect of maximizing sales, or some other desired "transaction" in my world.

When I first enrolled in a graduate business program, I was majoring in nonprofit administration, with a focus on the administration of arts organizations. I remember during my first year, I was taking a Policy course, in which the prof stood up and asked everyone "What is the manager´s primary responsibility?" I figured this was one of those broad discussion topic questions, and people around the classroom were piping up with all kinds of answers about efficiency, facilitation, training of their reports, clarifying vision and mission and so on.

The professor just stood looking grim and dismissive, subtly shaking his head. It began to dawn on me that this was not a topic for discussion. There was a right answer, according to him. Only one, and here it is:

The primary responsibility of management is to maximize shareholder value.

This event particularly stands out in my memory because, as a young and idealistic nonprofit-administration major, I had to wade into the fray, and start arguing about whether the point held true when there was no profit motive. No profit? Inconceivable. My classmates largely decided I was idealistic and naive.

But when I think about it, the statement does hold true for me. Where there is no profit motive, the constituents are the shareholders. The responsibility of governments is to maximize value for its citizens. My responsibility as a Marketing Manager is to maximize the value for the shareholders in the company where I am employed.

Add to this two other things that I have come to believe about designing analytics systems.

1. For an interaction between two parties to be useful and measurable online, there must be a "transaction" - an exchange of items of value, whether it is email address in exchange for whitepaper, or dollars in exchange for box of chocolates (more on this in an upcoming article).

2. The objective of a performance metric is to track expected or predicted progress towards a specific, measureable goal, based on historical performance.

And so, with this in mind, I come back to the question of measuring User Generated Content, and the audience engagement metric. And I just want to present the idea in the following framework.

I am a Marketing Manager. My responsibility is to maximize shareholder value. In that context, how does measuring audience engagement serve my objectives, constitute a transaction, and track predicted progress towards a measurable goal? The answer to these questions will, I believe, serve as a framework to lead me to the appropriate metric for audience engagement.

Of course, it is obvious that the development and contribution of user generated content constitutes a significant, and valuable transaction on a website (in most cases, excluding spam, and other like content that subtracts, rather than adds value). I don´t think any marketer would argue this point in the world of web 2.0. But the measurement of this contribution must be placed in the context of a specific a measurable goal that serves towards the objective of "maximizing shareholder value", in order to constitute an applicable metric.

What do you think? Should measuring user generated content be subjected to a more rigorous framework, or is there perhaps value in an organic approach, to identify possible future goals, metrics or trends opportunistically? I propose that such activities are usually a distraction for upper management, and breed misunderstanding, wrong assumptions and distrust of the analytics process. Do you agree or disagree?