Social Media Metrics - Measuring Interactions

For all those marketers trying to figure out how the best return on marketing metrics for social media, MarketingWitz strongly recommends the Internet Advertising Bureau overview of social media marketing metrics. Good stuff.

Return on Marketing Investment Metrics Keep Evolving

Marketing campaign performance has been measured since the first ad was posted, but the complexity of return on marketing investment metrics has increased exponentially along with the complexity of campaigns. ROMI, return on marketing investment, is increasingly difficult to assess as the marketing toolbox of available marketing tactics continues to expand and as technology allows increasingly detailed assessment.

This is true for both traditional marketing and newer technology driven marketing. Traditional television advertising measurement has advanced well beyond the early days when marketers assessed return on advertising investment based on sales response over the life of a campaign and then moved into specific ad assessments such as awareness and key attribute impact (e.g. do the ads increase the "likability" of a brand.) Today we must also consider the interaction between the ad exposure impact and whether the ad drives increased web traffic (additional impressions) or measurable increases in social media activity.

As recently as a the last decade (yes, the '00's), eMail success was evalated base on click-through rates. After all, that was the objective of the typical email marketing campaign. Today there is a wealth of new data about every eMail campaign - Delivery rate, Opt-out/Unsubscribe rate, Open rate, Pass-Along rate, Time to Open, etc. and, oh yes, click-through. With the advent of multiple devices per user (laptop, home computer, office computer, mobile device, etc.) user screen eMails on multiple devices and may open an email on one device but not take action until using a different device later. (I screen eMails on my Blackberry and iPhone - yes, I have both - but often wait until I'm on a laptop to write anything other than a short reply.) The result is that savvy marketers are now looking at addtional metrics, such as Opens Per Opened (avg. times opened per opened email) to better understand customer behaviors.

As marketers, we need to continue to adpat our metrics to understand return on marketing investment as cusotmer behaviors change.

Increasing Internet Marketing ROI Via Link Building

Moving from a broad strategic marketing post (see previous post) to something more tactical, do you know how strong the SEO effort is for your brand web site? I came across this web post and it is a simple overview of key issued related to link buidling for SEO. A quick read with references to other sources. Utlimately it's about increasing the ROI of your online marketing efforts.

Free - Digital Marketing Economics

Chris Anderson, Wired Magazine, has just published "Free: The Future of a Radical Price" suggesting that the declining cost of technology will drives digital products to be free because the marginal cost of product approached zero. The application of Moore's law, which suggests that the amount of memory delivered for a given cost will double every two years (a rough statement of the law, not a quote), to the cost of delivering digital products is one of the foundations for the suggestion that pricing will go to zero because the cost to deliver approaches zero.

It's interesting, because the cost appoaches zero but never acheives zero. Therefore, someone must still pay for the cost of delivering the product. Facebook is free, but the servers that house the data cost money. Google is free, but the it costs money to run the search bots, store and serve the data. The marginal cost of a Google search may approach zero, but it is not zero?

So what is the model? If free to oonsumers, there appear to be only one alternative - third party party payment. Third party payment to cover costs and provide profit margin can come from advertisers (the media model), or from a subset of the consuming market. This subset might be fees to subscribers for premium services. In other words, in order to be free to most a few must pay for a premium offering. A second version might be the blades/razor model, the content is free (or near free) but you must purchase the player/iPod/iPhone/Kindle. In the end, "Free" isn't really free, it's the ability to allocate product to a broad population by charging a few or charging in another manner. What do you think?

Social Media and return on marketing investment

Is social media a useful place for a brand marketer to spend time? Is there ROMI from the effort? Aside from the occasional measurable promotion most social media today has limited short-term return on marketing investment. However, I content that brand marketers should participate in the so-called social media experiment in order to gain the long-term return on marketing investment. Or, any individual might choose to sit on the sidelines and learn from the investment of experience by other marketers (How many advertisers learned the ropes of the :30 TV spot on the backs of the investment by P&G, Kraft, and others?).

The current social media tools (Twitter, Facebook, LinkedIn, etc.) all represent new technological tools that facilitate alternative forms of communication and interaction. We are in the cultural period of turmoil in which the technology has given us capbilities and we are still learning how to best use these new found skills. Like a child learning to walk, then run, then dance. We have yet to learn how to dance.

Economic Stimulus, Brands, and the Social Contract

Our economic woes and the ongoing efforts to stimulate the economy strike me as having some comparisons and learning for corporate brand marketers. The private sector is experiencing major balance sheet issues with tight credit markets freezing the system. While political diffferences about the form exist, nearly all economists agree that some form of governmental stimulus is necessary. In essence, the government is forming a social contract with the private sector that says that government will take a balance sheet hit (increased deficit) to feed the private sector needs for this year and beyond. In return, following the end of the recession the private sector will need to help the government improve its balance sheet by reducing the deficit.

For corporate brands, this is in some ways like brands seeking corporate marketing investment to fund brand revitalization with the promise of generating future profits for the organization. As a brand leader, think about the nature of the organizational contract that your brand is making with the company. Show the company the long term return on investment proposition that you are advocating for the brand.

Return on Marketing Investment for Small Business can exceed Big Business

Warrillow & Co., who was recently acquired by The Conference Board, comments in their most recent e-Mail newsletter about the ability of small business to survive in the tough economy because, unlike their larger corporate counterparts, most small businesses are not dependent upon bank borrowing to improve return on equity. Marketingwitz is thrilled to see that Warrillow appears to be thinking about balance sheets over income statements, as suggested in an earlier (3/16/08) MarketingWitz post.

ROMI, return on marketing investment, can be very favorable for business with healthy balance sheets in turbulent economic times. Most small business operate with positive cash flow and thus are not as dependent on the banks for day-to-day operating capital, and only 11% of small businesses, per Warrilow, rely on bank loans to acquire or start.

With more and more layoffs in the corporate section, and 516,000 new unemployment claims last month, look for a surge in new startups. The economic rebound will start on Main Street, not Wall Street.

Marketers Must Innovate as Economy Tightens

When times are plentiful it's easy for marketers to become complacent. As the economy becomes increasingly challenging every business is looking for new revenue streams. Now is an excellent time to evaluate your current sales and marketing strategies, and look for new innovative approaches. Yesterday, I heard a sales manager bemoan the recent drop in new customer orders. Yet it was apparent that he wasn't modifying his approach to new customer acquisition. As the economy changes, what changes are you making?

One way to consider new alternatives is to assess each of the traditional 4 P's and ask whether your offerings match the current times: Is your product offering appropriate or is there a new feature or way to combine your product/services for your target customer base? Are there new markets that offer new places to sell? Pricing is an obvious lever in tough times, but think about creative ways to bundle offerings rather than simple price competition. Think about all of the terms in your contracts that might offer new ways to be creative. Are your promotions communicating to your customers in the right way? Are they supporting your core value proposition or competing with that proposition?

Now is a great time to evaluate your marketing approaches to maximize return on every dollar spent.

Yellow Pages ROMI versus Online Marketing

A new thick Yellow Pages book was dropped on my front lawn this week. The two thoughts that immediately entered my mind as I bent to pick up the book were: 1. Where will I put this huge book?, and 2. How much money have all these firms wasted? With the exception of perhaps some very local retailers, most of the money spent on ads in the Yellow Pages has been a waste. If you need a number, find it online. If you need to find an address or hours of operation, check the company website. The premium for Yellow Pages ads is just too high. If you're a samll business and want to fund an online marketing effort, cancel your Yellow Pages ad reallocate those funds.

Negative Advertsing in Politics versus Consumer Brand Marketing

One further comment on politcal brand marketing. See the excellent comments at http://hbswk.hbs.edu/item/5937.html which discusses the role and value of negative advertising in political elections versus consumer product marketing. From my perspective, the zero-sum winner-take-all nature of elections differs markedly from the consumer marketers trying to grow categories and take share from competitors in an environment where products rarely change formulas and no formal deadlines exist.