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.

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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.

The cost of chasing the biggest, richest and shiniest new toys

A recent article by Laurie Sullivan, Video In Rich Media Ads More Likely To Lead Customers To Purchase, sites a DoubleClick benchmark study that suggests rich media ad formats that contain video “overwhelmingly” outperform other types of creative media ad, such as images and simple animation Flash. Not surprisingly, the pioneers in every medium get the attention and benefit of impressed consumers and often times mainstream news coverage of their advanced techniques. However, as more marketers plow money into video ad formats, consumers will quickly become de-sensitized to them, performance will level out and marketers will be left chasing the next latest trend.

This is not to say that marketers should not be experimenting. Experimentation is vital, especially with the rapid growth and adoption of new technologies, and all marketers should have a portion of their budget designated to test and trial these new techniques, formats and technologies. And it should go without saying that this should all be evaluated in the context of your brand positioning. If you claim to be hip, innovative and technically savvy this ups the ante for your marketing experimentation requirements.

However, I think there is a greater danger than missing out on the latest format or technology promising .147% higher CTRs. That is the switching cost of moving on to a new technique before you have integrated and optimized existing techniques in the media-mix. And ad format is only one piece of the equation for online advertisers who should also be evaluating how creative, placement, targeting and timing are affecting their ROMO. In addition, marketers should be tracking post-click behavior or changing brand attitudes to understand the longer term and cross-channel affects of their campaigns.

I would argue that becoming more efficient in existing techniques through experimentation and experience will drive better results to the bottom line than chasing the newest, biggest and richest ad formats around.

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.

Online measurement needs a cross-channel upgrade.

With a marketing seat at the C-level table and a recession still dominating the headlines, the focus on accountability in marketing is greater than ever before. Consumers are adding new online activities, like video and Twitter, while continuing established online and offline activities throughout their purchase paths.

While marketers have done a good job by adding these new channels to their marketing mix, they have not successfully integrated execution or measurement across these channels. The blessing and curse of the Internet is the ease of measuring and tracking things like impressions, click-throughs, and activity. As marketers have relied on what is easily measurable, they have often ignored metrics that align with their objectives and provide actionable insight in supporting business decisions.

Improving marketing measurement effectiveness is a never-ending journey, but marketers can take some manageable steps to get started:

  • Map business goals to campaign objectives and specific tactics. The first step in any marketing process should be aligning business goals to marketing objectives, selecting focused tactics to accomplish that objective, and measuring the results. For example, an organization’s strategic goal of strengthening their brand across key segments can draw support from various functional teams. Marketers can strictly define their contribution and objective to increase awareness by five percent for a youth segment. With an understanding of key segment’s behaviors, and attitudes, marketers can create relevant social marketing campaigns designed to drive awareness for their brand or product.
  • Identify the metrics that matter and the existing data gaps. Each new marketing channel ads its own series of new metrics, for example social marketing introduced metrics like time interactions, spread of content, velocity, number of friends, posts, etc. Only with clearly defined campaign objectives, can marketers sift through the list of things to measure and identify the metrics that measure the business success of campaign tactics. To accurately measure change in unaided and aided awareness for your brand or product marketers utilize brand surveys or professional brand monitoring services from firms like Nielsen BuzzMetrics and Cymfony. Identifying the data gaps that exist, like measuring lift in brand awareness, is like acknowledging there is a problem. It’s the first but huge step towards recovery.
  • Conduct experiments to verify assumptions and fill data gaps. Inevitably the metrics that matter are not easily measurable or readily available. After identifying existing data gaps marketers can create a simple 2X2 matrix to compare the value of the data with the cost of obtaining to help prioritize data gaps and pick the low hanging fruit or build these costs into future campaigns. Also consider commercializing this matrix to identify latent needs in other functional teams and help build the business case for more marketing measurement investment. To temporarily fill these inevitable data gaps marketers can obtain data through an existing source in another functional team, for example PR or market research teams may have ongoing brand tracking studies. It may also be worthwhile to understand if there is a company wide accepted correlation between the data you have, like impressions or number of branded searches, and the data you need.