The Important Evolution of Engagement From Marketing Fluff to Metric to KPI

There has been a lot of discussion around the topic of engagement; what is it, why does it matter and how do I measure it, and is it marketing fluff or the new standard for measurement. From my research I see a valuable concept being poorly interpreted and executed by some marketers, vendors and agencies.

What is it? To start with a definition, most analysts and bloggers agree on two basic components. The interactions can be either individual or company led, and they are ongoing across every point of contact. These are all the brand interactions with the product, other individuals, customer service, marketing messages, applications, etc. over time, which requires a comprehensive cross-channel measurement algorithm to evaluate.

Engagement is not the “time spent” with your online video or the “number of posts” on your social media site; these metrics are only part of the equation. I agree with the critics who dismiss these “engagement” metrics, but the problem is not with the concept it’s with the current execution of measuring what’s available as opposed to what matters. Which leads us to our second point.

Why does it matter? Technology has exponentially increased the points of contact individuals have with your brand and social technologies have exponentially increased the reach and influence individuals have on each other. We also have the added benefit of being able to track and measure most of these new technology enabled interactions, and improve customer insight by measuring individual’s behavior.

Marketing leverages both quantitative/hard metrics like sales that are generally based on behavior, and qualitative/soft metrics like satisfaction that are generally based on surveys to determine success. Engagement is a new qualitative/soft metric, but is unique in that it is behavior based not survey based, which may deliver a more accurate indication of marketing and business success. If you have any question about the inaccuracies of self-reported survey responses, check out Martin Lindstrom’s new book Buyology, which uses brain scan technology to separate the truths from the lies about why we buy. In addition, the more “social” marketing becomes, the higher degree soft metrics will be needed to generate hard results. Which leads us to our third point.

How do I measure it? A metric is anything that can be consistently measured, like CTRs and time spent, where a KPI is an indicator, agreed upon with your partners that will determine whether you are attaining business success. As a result, engagement measurement cannot be a one-size fits-all because the number and type of interactions varies for every company and the relative weighting or value associated with each interaction in an algorithm will also differ.

Start by identifying all the points of contact individuals can have with your brand before, during and after the buying process. Next identify what measurement mechanisms exist across these points of contact to expose potential data gaps. Third, prioritize the points of contact lacking any measurement mechanisms and create a simple 2X2 matrix based on their value vs. their cost to acquire. Finally, work with your partners to define an algorithm that weights the values of each interaction, measure to define a benchmark, and evaluate your model as an indicator of business success. By discovering specific patterns of behavior across interactions, marketers can measure for their occurrence and proactively drive those indicator actions to occur.

Engagement is not a replacement of but another valuable tool that focuses on the individual’s new and growing number of interactions with a brand to help marketers assess and better influence their buying process. While the road to measurement may be long and hard, the time for action is now.

Advertising Effectiveness Will Never Change With Analysis Like This

In a recent article, Advertising Will Change Forever, Forrester Research analyst Josh Bernoff explains that while digital spending will nearly double in 5 years ad budgets won’t. The reason for this, Bernoff explains, is that “In this recession, marketers have learned that interactive marketing is more effective, and advertising less effective, per dollar spent.” While this will make bloggers, digital analysts and social media strategists feel pretty good about themselves and their job security further analysis is required.

Asking marketers about the effectiveness of individual channels is part of the problem. Channels are not executed in a vacuum. We now understand from rigorous attribution research conducted by Microsoft Atlas and others what we have always assumed to be true, that the effectiveness of individual channels is significantly affected not only by other online channels but across offline channels as well. As long as research companies like Forrester and marketers take the easy way out and evaluate the effectiveness of channels in a silo, progress towards really measuring the effectiveness of marketing will never be made.

Bernoff goes on to fuel the fire by proclaiming the oncoming death of traditional channels, “If you’re in advertising, you’d better learn to speak digital, because that’s the way the world is going.” Contrary to this statement, Forrester’s own data shows that while time spent online has been growing rapidly, time spent watching TV is actually up YOY and still captures the majority of consumers time.

My recommendation is to ignore predictions of the death of traditional channels and ignore research that evaluates the effectiveness of channels in a silo. With the proliferation of new channels, consumers continued use of traditional channels and increasing cross-channel behavior, if you’re in advertising, you’d better learn to speak and measure integrated, because that’s the way the world is really going.

Leverage digital and social media for their strengths, not everything

In a recent article by Andrew McMains and Brian Morrissey, Online Brands Turn to Traditional Ads, they discuss how even pure plays like Kayak, Zappos and Amazon look to TV to build their businesses. In the article, Hulu.com’s success is credited at least in part due to their “old-school” 60-second Super Bowl TV spot which resulted in brand awareness and Web traffic spikes, including a 104 percent increase in monthly unique visitors to over 9 million. The lesson for marketers is to consider all channels as part of the media mix and acknowledge that certain channels have inherent strengths and weakness.

Additionally, attribution studies by Microsoft Atlas and Coremetric have proven what marketers intuitively knew, customers are influenced by a variety of messages and channels throughout their purchase process and these integrated messages have a cumulative effect. Where these studies and solutions fall short is by focusing solely on online channels, ignoring the majority of consumer’s media consumption. Zappos CEO Tony Hsieh said the cross-channel effects are clear, “What we’ve found is that if we layer in a little bit of offline brand advertising, it improves the ROI of our online direct response campaigns.”

Marketers should start with a clear understanding of their target market’s media consumption and how they use different channels throughout their decision and purchase processes. While each marketing tactic can be used for a variety of objectives, for example using search to increase brand awareness or social media to drive direct response sales, marketers will be better served leveraging channels for their specific strengths inherent to the medium and as defined by their target market’s consumption of that medium.

Attribution solutions still fall short.

The topic of attribution has been gaining steam as ad servers like DoubleClick and Microsoft’s Atlas, and Web site analytics providers like Coremetrics and Omniture have developed solutions to more accurately attribute influence across various online touch points. But let’s not pat ourselves on the back so soon.

These solutions exist in an online silo, rely on attribution rules and algorithms that need maturation, and ignore important consumer generated influencers like customer reviews. As a result, they only provide marketers with an incremental improvement to online measurement, still ignoring the majority of consumer’s media consumption (TV, Radio, Print) and offline influencer’s contribution in the purchase path.

The multitasking and cross-channel behavior of today’s consumer exposes the limitations of these online attribution solutions. The real solution lies in a clear understanding of consumers’ cross-channel behavior through the marketing funnel, programs aligned to business objectives and metrics that measure every touch point’s contribution through this journey.