The ROI of social media (and digital marketing in general) is a topic we’ve been tossing around SMG a ton lately, as has the media in a number of recent articles. I’m going to keep this post focussed narrowly on the ROI debate around social media and interactive campaigns, rather than enterprise use of social media.
During a conversation with Collin last week, he pointed out that in his experience, clients expect hard numbers on digital campaigns generally because measurement is possible, not because it necessarily means anything (correct me if I’m wrong on that, @radicaltrust). Put otherwise, we measure traffic simply because we can.
The simple fact that a .5% click-through rate (which is a decent showing) on a 50CPM ad buy (that is, it costs you $50 for every 1000 people who saw your ad) is considered a success is proof enough that these measurements are largely meaningless. Have a look at the math – if a client spent $75,000 on a digital ad campaign that got 1,500,000 impressions, with a click-through rate of .5%, they just paid $10 per “lead” – if you can call them that, since I’m not sure clicking on a banner add qualifies you as a “lead” any more than being in the same room with me qualifies you as my “friend”.
This desire to measure based on completely inadequate tools is spreading into the social media space as well. As far as I’m concerned, this is out of pure laziness – there are so many other, better metrics available to us when we start actually talking to people. The problem is that they require some form of human assessment, which makes them expensive and also something that requires thought. In this article from Adweek, Gordon Paddison, an executive at New Line Cinema, described a user-generated marketing campaign for the film Wedding Crashers, noting that
Despite the millions of participants who uploaded photos of themselves to “appear” in New Line’s “Crash the Trailer” program for Wedding Crashers, no one could “quantify that engagement level. No one knew or could determine the metrics for that level of brand affinity and personal engagement with the brand. So you can’t go to the CEO and say x equals y. That poses a problem on a consistent basis.”
Which strikes me as absolutely insane.
Before I make my next point, I want to state clearly and emphatically that I believe if you cannot measure it, you cannot manage it. In all of our programs, we gather ridiculous amounts of data that we crunch and graph and compare to come up with meaningful metrics. However, I also believe that dollars are not necessarily the currency that social media marketing programs should be measured in, especially in these early days. Tying something as ephemeral as friendship or relationship or engagement to something as complex and relatively rigid as a currency or sales target seems incredibly simplistic. It’s like saying to your friends, “Tell me how much you like me – in dollars,” rather than determining how much they like you by a more accurate measure – whether they show up when you need to paint your living room.
Now – I know that everything devolves into one simple thing: whether or not you get asses into movie theatres or motorcycles on the road or sandwiches bought and eaten. The act of purchase is critical to our entire universe, our reason for being. But (as anyone knows who has seen a diagram of the fabled purchase funnel) the act of purchase is not simply that one instant. It’s the proverbial iceberg – 10% visible (at the cash register) 90% under water (the rest of the consumer’s life).
So how can we help clients better understand that there are a myriad of opportunities to get messages to consumers and foster engagement with their products and brands, and that measurement of these interactions is in its infancy, but that there is inherent value in connecting with consumers? It’s common sense, but unlike clickthroughs or other superficial traffic stats, it’s damn hard to show on an Excel spreadsheet.