Resource Interactive » Social Media

Calculating ROI in an Everywhere Commerce World

Tim Wilson — Mon, 12 Dec 2011 15:27:03 +0000

As an analyst at a digital agency with clients across a range of verticals, the question I get asked most often is, “How do I measure the ROI of my digital and social media efforts?” Unfortunately, there is no single formula to do this, and the explosion of digital touch points over the past five years has made the goal of a single formula even less attainable.

In the case of a direct response campaign driving to an online purchase, getting to a hard ROI is practical (and is the basis for performance marketing). Typically, though, those calculations still undercount the impact of the investment by not taking into account the “brand” value and impact of the campaign, and those calculations will also overcount the results of the investment because they take full credit for revenue that was triggered or influenced by activity in other marketing channels (for instance, the revenue we garnered from our retargeting campaign was influenced by the volume of traffic to the website in the first place, which was influenced by paid search investments, which was influenced by consumer interest generated through TV and print).

When it comes to Everywhere Commerce, there is a similar nuance. Measuring actual purchases from an off-site (social or mobile) experience is fairly straightforward. But measuring the support of an off-site purchase can be almost impossible to directly capture, and measuring the downstream impact of enabling off-site search/discovery of a product, immersion and exploration of the product, post-purchase advocacy, and the sharing of any of those experiences with the consumer’s social graph makes things messy indeed!

This isn’t to say that digital and social media aren’t measurable. They absolutely are, but they require accepting that measurement is not a black-and-white quantitative formula—it requires science and numbers operating in tandem with the “art” of consumer insight, marketing experience and strategic thought. The key to appropriately blending the art and science of measurement to drive meaningful results and effective optimization is to answer what we’ve termed “two magic questions” at the very outset of any new initiative:

1. What is it that this investment is supposed to do?
2. How will I know if it did that?

The questions are simple, but answering them isn’t necessarily easy. Yet, reaching agreement and document on the answers to these questions at the very outset of any new initiative is imperative.

Often, it’s easy to answer the first question with one of the Big Three Business Goals: increase revenue, increase profitability, or improve customer satisfaction. But when getting to the second question, it becomes readily apparent that the first question was answered at too high of a level. When that occurs, we find that a useful tool is to build a quick causal model diagram as a group exercise that starts by articulating what sort of outputs can be expected from the initiative:

“We’re going to step up our presence on Twitter because that will be a way for us to foster dialogue with our consumers.”

Then, we logically work through how those outputs will drive to that higher-level business goal:

“Increasing our dialogue with consumers will increase their affinity for our brand, which will both move us higher in their consideration set when it comes to their next purchase while also turning some consumers into advocates, which will increase the awareness of our brand through their social graph.”

Document this causal model. Does it make sense? When you show it to your peers, your manager, and your manager’s manager, do they nod their head and agree? Or is the logical link to a meaningful business outcome convoluted? If it’s the latter, STOP! Or, at least, pause and ask yourself if the initiative is the right one or if the outputs you identified were the right ones. It’s much, much, MUCH easier to adjust the strategy and approach at this point than it is to wait until after the initiative has launched and realize that it’s not delivering something of value.

If you’re interested in diving into what sorts of outputs social media shines at—it’s not a light read, but it’s got fantastic content—consider picking up a copy of Social Media Metrics Secrets by John Lovett (or you can hear him talk about the book on the Beyond Web Analytics podcast where he was interviewed).

Building Social Shopping Subsets

admin — Mon, 09 May 2011 14:00:29 +0000

Social network filtering is gaining momentum. Consumers with massive digital collections of friends are now creating subsets based on relationships, interests, activities and locations. This growing effort to categorize social networks just received a major boost with the introduction of Facebook’s ‘Send’ button.

The new ‘Send’ button plugin for third-party websites lets users share a page as a post to a Facebook group, a message to specific Facebook friends or as an email. Now, instead of ‘Liking’ a page and having it show up on the wall for their entire social network to see, consumers can compartmentalize information and the people with whom they share.

So what does this mean to you?
The Facebook ‘Send’ button can help drive engagement and purchase by making it easier for people to send recommendations, questions and more to subsets of friends. These smaller social networks can become group planning, sharing, shopping and collaboration circles. Brands can help create and reward these groups, encourage discussion and gather important, real-time feedback.

Breaking Through the Feed Filter

admin — Fri, 15 Apr 2011 19:35:10 +0000

More and more consumers are using curation services to condense and digest the flood of information online. With 140 million Twitter posts per day, countless Facebook updates and RSS feeds, consumers barely have time to absorb any of the information they see.

Tools such as Summify, Paper.li, Flipboard, and more are changing the way consumers view their streams. These tools reduce clutter and make floods of information easier to manage. But as content curation becomes more widespread, consumers who see a sleeker information stream may also miss brand messages.

So what does this mean to you?
Consumers already receive much of their information secondhand. In fact, a new Cornell University study found that less than five percent of Twitter users produce half of the service’s daily posts. Most people get their information from retweeting or reintroducing intermediaries. Content curation moves the consumer even further downstream from the original message. This means brands must work even harder to provide a steady, relevant flow of brand communication that passes through each filtering layer—from friends who share to apps that summarize—to include its stories in the consumer’s final curated view.

Filtering Consumer Social Circles

admin — Fri, 08 Apr 2011 16:11:08 +0000

We’re seeing an evolution in social media. Large digital social networks are being filtered into smaller groups based on interests, activity and location. And while an influx of new apps is helping us categorize existing friends, they’re also enabling us to expand our physical social circles and create disposable digital groups.

The digital and physical worlds are converging. Applications such as Beluga allow users to set up temporary, group mobile messaging based on subject, activity and more. The new Color photo-sharing app helps users view photos and create small communities with anyone within 150 feet. LocalMind is a crowdsourced opinion app that lets users ask and answer questions about locations. These and other new apps are letting people define and fine tune how they interact with friends and strangers.

So what does this mean to you?
Commerce isn’t the only thing that’s everywhere. So are the opportunities for brands to connect with and engage consumers. Companies have a chance to help create groups—from ones focused on particular products and brands to circles based in particular places—and use them to get to know customers, encourage discussions and gather important feedback, all in real-time.

Making Connections through Interactive TV

admin — Mon, 04 Apr 2011 20:49:00 +0000

Not long ago, the general vision of Interactive TV included an on-screen display with engaging apps and ways to connect with friends. Now, the view of interactive television involves watching the big screen and engaging with additional content on smartphones and tablets.

According to a Nielsen and Yahoo report, about 86 percent of people access the Internet on mobile devices while watching TV. A growing number of applications are helping to connect these previously separate experiences. From television check-in apps, like Philo and GetGlue, to sound print technology such as Into_now, which works like Shazam for TV, interactive television is becoming a paired, secondary screen experience. This gives consumers the power to watch TV in a group while still viewing it all through a personal interactive lens.

So what does this mean to you?
Interactive television isn’t something we have to wait for. Brands can get involved now, whether it’s using sound print technology to launch a mobile app experience or utilizing a consumer’s social graph to offer personalized information that complements TV programming. We’re nearing a time when television companion apps will be common ways for brands to initiate two-way interactions and shoppertunities.

Creating Social Groups and Driving Traffic

admin — Wed, 23 Mar 2011 17:12:52 +0000

With many of us using technology for business and pleasure, there’s a good chance we’re replacing physical relationships with primarily digital ones. But a bevy of new apps are promoting tangible connections by using digital social networking to drive real-life interactions.

The Situationist app encourages nearby strangers to meet. Hurricane Party helps create and share spontaneous gatherings. Message Party invites people to leave notes about places they go. Plus, there’s a host of group chatting apps, such as Beluga, Group Me, Hashable and more, that push social experiences beyond our current circles and into new groups based on interests, location and knowledge.

So what does this mean to you?
Brands now have the ability to use location-based services (LBS) with consumers’ existing and potential social graphs to create engaging, in-the-moment experiences. Whether it’s a limited-time offer for friends near the same place or a deal that urges strangers in the same vicinity to interact with fellow brand fans, this technology creates opportunities to drive targeted, measured traffic.

Opening Markets with Consumer Photos

admin — Tue, 22 Mar 2011 17:13:46 +0000

Brands are starting to use social photo sharing to reach new audiences. With the rapid growth of Instagram—two million users in less than five months, plus 130,000 registering each week—and the arrival of competitors such as PicPlz, it’s clear that the popularity of photo sharing is increasing at an astounding rate.

What’s even more interesting is that Instagram and PicPlz, the two major photo sharing applications, have recently opened up their APIs. Now, the real-time API for Instagram enables notifications every time photos with specific links and tags—hash and location—get posted.

So what does this mean to you?
Companies have an opportunity to encourage brand fans to take location-tagged photos and share them on social networks. These brand advocates can generate and post content within their social graph, using hashtags to endorse the brand proactively and help make their friends more likely to engage with said brand. Tagged brands then have the ability to track photo uploads, views, likes and comments, which allows them to more effectively target future marketing efforts based on what they know about their consumers’ sharing behavior.

Using “Likes” for Targeted Messaging

admin — Tue, 08 Mar 2011 14:29:25 +0000

Brands are underutilizing one of the Facebook “Like” button’s most powerful capabilities. When users click their Open Graph “Like” button—on and off Facebook—they’re creating a link to content on their wall and subscribing to future news feed updates.

So by liking a certain page, consumers allow brands to publish stories to them in the same way a brand would write a Facebook post on its own wall. This allows brands to create targeted messaging by engaging specific subsets of their audience with highly relevant updates.

So what does this mean to you?
The ability to send product- or offer-specific messages could be very useful, particularly for brands with sizable fan bases. If a retailer has a sale on a product, it can publish first or only to users who have clicked “Like” for that specific product. What’s more, once there’s a complete dashboard to track activity and groups associated with a brand’s “Like” buttons, this ability to target subsets will be even more powerful.

Searching for Smarter Recommendations

admin — Fri, 11 Feb 2011 22:15:13 +0000

When it comes to social recommendations, we know consumers listen to people they know. In fact, according to IBM’s “Capitalizing on the Smarter Consumer” report, 45 percent turn to friends and relatives when they want to know more about something. But are consumers buying the recommendations some sites sell based solely on their friends’ behavior? For Huffington Post readers, the answer was a resounding “no”.

When HuffPo released a beta version of its Facebook-powered recommendation engine, the majority of reader comments were negative. In short, users seemed to question the intelligence and wisdom of a social filtering algorithm. Some felt the system would not ‘understand’ why they or their friends read particular articles. Others thought the system would use siloed Facebook data to make broad assumptions, failing to encompass who readers are in total.

So what does this mean to you?
It’s not enough to serve up articles and product recommendations based only on what a user’s friends like. That approach is too shallow and presumptive. Brands need deep, dynamic social graphs that include friends’ “Likes”, as well as an individual’s “Likes”, purchases, locations, impressions and more. Don’t be afraid to get analytics involved. As the “Internet of Things” evolves, they’ll have reams of data that—when used properly—can deliver smarter, more trusted recommendations.

The 2010 Resource Interactive Reel

admin — Mon, 01 Feb 2010 21:28:47 +0000