Tag Archives: social media metrics

ROO???

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In last week’s eMarketing class we discussed metrics and measurements of social marketing campaigns, and a very interesting new concept was raised; ROO.  That was not a typo.  Rather it is a new method of measuring the success of marketing campaigns, and stands for Return on Objectives.  With ROI being difficult to measure for Social Media campaigns, alternative methods of measuring success have been popping up and this is one of them.  A quick Google search turns up an interesting Forbes article that makes mention of ROO, and several other new measurements as well (Return on Engagement, Return on Impressions, etc).  The key to ROO, according to the article, is accepting that “not all goals are measurable with hard data”.  As an Accounting professional this is very hard for me to contemplate, but I can see the authors point.

ROO requires you to measure very specifically against pre-set goals and objectives of the organization.  From a financial perspective this often means measuring Revenue and Operating Expenses, but from a brand and marketing perspective there are other objectives that can be measured over the long and short term.

A great example of this is shown by Empower MediaMarketing.  One of their clients’ goals was to increase “positive online discussion of their brand”, so Empower began a blogger outreach program for them.  While they are unable to tie any results back to sales specifically, an increase in online discussion would likely lead to better brand awareness and this could lead to customer loyalty and sales in the future.  The investment in Empower, and in the blogger outreach program, could therefore be measured by monitoring discussion before and after the program, as shown in the below chart pulled from Empower MediaMarketing’s website.

While this cannot be immediately translated into financial benefits (or, more specifically, ROI) the Accountant in me is pleased to see that success can still very clearly be measured for any objective if you know what you are trying to improve.

CTR’s, CPC’s, RPV’s…and XYZ’s?

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My head is spinning from all of these acronyms, but this report from Adobe’s research wing entitled “The Social Intelligence Report” provides a lot of good information about tracking the increased value of social media ad space (specifically for Facebook, Twitter, and Pinterest).

As the below graph shows, Facebook CTR (Click Through Rate) has increased by 275% over the past year.  This is an incredible improvement, essentially meaning that the same ad popping up on Facebook will now get over 3 times as many click throughs as it did at the same time in 2012.  This is clearly a favorable trend for Facebook as they look to improve their revenue generation model.  While this is an opportune time for Facebook to increase fees for what is now more valuable ad space, the CPC (Cost per click) has decreased sharply as well, running at 40% below the same period last year.

Apparently the ROI of ads run on Facebook is also on the rise, at 58% higher than the previous year.  At first I was puzzled by this information; I have read in so many other articles and papers how difficult it is to calculate ROI on Social Media spend, but Adobe seems pretty confident in their figures.  As I read further it became pretty obvious though, particularly when looking at the below chart.

This figure shows the growth in RPV (Revenue per visitor) of each of the three social media sites that were part of the study.  This seems like a brilliantly simple and effective way of measuring the success of a campaign involving the purchase of social media ad space.  While CPC’s, CTR’s, and CPM’s can give quality insights into ad effectiveness, nothing will tell you as much about the impact to the bottom line as the ability to measure revenue directly coming from these ads.  As the increase in RPV from these platforms continues to rise, it could become a necessity for marketing professionals to make social media ad space a regular part of their marketing mix.

Little confidence in Social Media metrics, but plenty of $$$ spend

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In my quest to find out how to accurately assess the ROI of Social Media campaigns I was not surprised to find that I am not the only one seeking this information.  This is apparent in a 2012 survey conducted by Vizu, a Nielsen company, in which they asked 500 US digital marketing professionals a series of questions to see how they felt about paid social media advertising.

One of the key findings of the survey is that marketing professionals are uncomfortable with the lack of clear link between paid social media spend and benefit to the firms bottom line.  A better calculation of ROI is specifically requested, with 58% of advertisers and 65% of agencies stating they would like more clarity around “how to measure social media ROI” (see Fig 14 and Fig 15 from survey, presented below).  They are also frustrated by the lack of clear link between social media advertising and sales or brand lift.  Current measures of success use things like site hits, Facebook likes, link shares and click-through-rates.  However this is not leaving much confidence with the marketing professionals who are buying up ad space in Social Media.

This finding, while confirming some of the thoughts I have had in many marketing meetings, also leads to another significant question:  if marketers are unclear as to the true benefit of paid social media advertising, then why do they continue to invest heavily in this space?!?  The above mentioned survey actually goes on to show that most marketers are leaning towards increasing spend in social media at the expense of other more classical channels.  Fig 3 below, taken from the survey, shows that 64% of respondents will increase paid social advertising budgets and decrease spend in other channels.

It seems to me that while marketers are not able to comfortably assess the exact benefit to the company’s bottom line, they still see tremendous upside from paid social media advertising and are willing to dive into it while siphoning off funds from other programs.  There is clearly a benefit to advertising in this space, even if it cannot be accurately measured at this point.  Well, either that or marketers are all insane and are simply chasing the latest online fad without truly understanding the benefits!  This will clearlyrequire some more investigation on my part.