Measuring what matters… in real-time

A new blog post and report from Forrester Analyst, Nate Elliott, Social Media Marketing Metrics That Matter, defines a framework for social media measurement. There is some great thinking here. This image provides an overview of his framework:

The core idea is around segmenting social metrics by audience role: social strategist, marketer, executive. And while Nate correctly states, “if you’re focusing on fans and followers then you’re almost certainly doing it wrong” he goes on to suggest that social strategist should focus on just that.

Here is my problem with this approach:

The assumption is that there is a correlation between social activity (fans, followers, etc.) and real business objectives. Only if organizations are able to make that correlation, which will change over time, should they continue to track and measure social activity metrics and even then it minimizes the value of the social strategist role.

Secondly, this framework suggests real business value metrics are only evaluated on a quarterly or annual basis when senior management is involved. The benefit of social, or any interactive medium, is the ability monitor and adjust real-time. Only by empowering social strategist with real business metrics can they make the adjustments necessary to optimize your programs to maximize revenue, not retweets.

Segmentation makes sense, but all marketers need to take advantage of interactive mediums by measuring what matters and doing so in real-time.

Budgeting for Content Marketing

At yesterday’s MITX event, Grow Your Customer Relationships With Branded Content, Carissa Caramanis O’Brien, President at Red Box Communications, Eric Oliver, Director of Digital Brand Communications at Converse, and Matt Drinkwater, Senior Director at Yahoo!, discussed various aspects of content marketing. They all shared some great examples, which lead to the obvious questions: how much does it cost and how can I increase my budget YOY?

Before trying to duplicate their tips and tricks in your organization, Marketers must recognize that successful content marketing requires a mental shift, including how you think of budgeting. For example, in order to be successful in this new world, Marketers must think in terms of:

  • Ongoing programs, not campaigns.
  • Objectively valuable content, not copy.
  • A content strategy, not channels like Facebook or Twitter.
  • MPDs, not budget dollars.

MPDs are the number of minutes per day that stakeholders are investing or participating in content marketing. Ironically, many Marketers are solely focused externally on their customers’ “engagement” while internally they only think in terms of a budget number.

Marketers should instead think in terms of MPDs because changing behavior is both the most difficult part of any new process, and the key to long-term success. I have found that stakeholders investing as few as 15 MPDs can create a successful content marketing program. While securing a budget for the next year will ensure activity, a mental and behavioral shift is required to:

  • Take advantage of expertise across the organization.
  • Infuse your culture with the external reality.
  • Make content marketing a core competency.

The best part about using MPDs as currency in your organization is that as stakeholders get more comfortable participating, they will deliver more content, interactions, and value in that same amount of time. This allows your program to grow without asking for more.

Leave the budget conversations for the media buyers; success in content marketing is measured in MPDs.

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.

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.

Click-through rates are not a marketing or business objective.

In a recent article by Gavin O’Malley, Pre-Roll Ads Get More Bang For The Buck Than In-Banner, Study Finds, pre-roll ads are touted as being 8-25 times more effective than in-banner ads. The study was based on new data from Web video company BBE, where over 2 billion impressions and virtually all of the online video ad campaigns ran on BBE’s network in 2008.

As stated in the article, “BBE’s goal was to find out which format brought advertisers the most bang for their buck, based on the most effective measurement the company has — click-through rates.“ While we can commend BBE for conducting research and collecting data around the different online video formats, it is disappointing to see CTRs still getting so much attention.

CTR is an old world reach metric that ignores the measurability of interactive channels and does not align with marketer’s objectives. Better to use efficiency metrics like cost per desired action or return on marketing objectives (ROMO) and focus on customer metrics like change in brand perception, retention or CLV that better align with business objectives. Yes, we still need to measure CTRs, but this data should only be used in combination with other metrics to deliver the valuable insight marketers need to make informed decisions.

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.

Five Online Trends Marketers Should Focus On.

With almost half of 2009 and hopefully the worst of the economy behind us, its time to focus on the online trends that matter. Put your Facebook and Twitter strategy aside and focus on:

  • Interactivity: Organizations need to really internalize what it means to be interactive and leverage the specific strengths of interactive channels for all marketing programs and consumer touch points. Interactive marketers need to push best practices across the entire organization to ensure a positive experience for consumers changing behaviors and expectations.
  • Measurement: Consumers increasing cross-channel behavior will force marketers to improve their measurement capabilities. Consumers move across a variety of online and offline channels throughout their purchase process. In order to accurately determine the effectiveness of marketing spend, influence future investment or identify which programs to cut, measurement needs a cross-cannel upgrade.
  • Consolidation: With the proliferation of marketing channels, organizations have acquired a variety of separate vendor/agency relationships for their search, email, social and mobile marketing efforts. Marketers need to tear down the internal and external walls separating channels to reduce the number of profit centers and infighting, create a media neutral approach and improve cross-channel integration.
  • Governance: The talk in 2008 was that marketing’s needed to release control of their brands, that consumers now owned the brands and there was nothing you could do about it. It is exactly because of that shift in control that marketers need to better manage brand communications through the issuance of governance policies and procedures for employees and increased vigilance through brand monitoring tools and technologies.
  • Analytics: For years now marketers have been collecting data through CRM systems, web analytics platforms, experiential marketing campaigns, etc. Marketers now need to integrate disparate data sources from around the organization and enhance their analytical capabilities to help improve targeting, enhance consumer insights and promote a more comprehensive view of the customer.

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.