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New Tool Promises to Put Social-Media ROI on Same Footing as Traditional Media
Marketing Evolution, Telmar Believe Effects Can Be Predicted, Accountable Like Other Media
By: Jack Neff Bio
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Published: June 03, 2011
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Social media has struggled for years to demonstrate return on investment on the same analytical playing field as more established media. Now, Marketing Evolution, which has been working on cross-media analytics for more than a decade, is joining with media planning software provider Telmar to release an ROI tool they say will do just that.
The companies will unveil the Telmar Matterhorn ROI tool, which became available earlier this week for early clients including Interpublic’s Universal McCann, during a presentation at Federated Media Publishing’s Conversational Marketing Summit June 6, the start of Internet Week in New York. That’s fitting, said Marketing Evolution CEO Rex Briggs, because a statement by Federated’s executive chairman, John Battelle, at a conference last year prompted development of the new tool.
"He lamented the fact that there was no way you could put the investment you were making in social media side by side with your TV investments or even digital display to figure out where you should be investing more or how much," Mr. Briggs said. At that point, Mr. Briggs said he turned to Rick Brunner, a Doubleclick and Google veteran and longtime internet marketing analyst who has headed Marketing Evolution’s work on the project, and said, "We’ve got the data to do that. Why don’t we solve that?"
Mr. Briggs has been conducting cross-media effectiveness analysis with a wide variety of marketers for more than 10 years, adding new media in along the way as they emerge. The Telmar Matterhorn service will be based on data collected in working with clients such as as Unilever, Coca-Cola Co., Nestle, MTV, Time Warner and EA, among others. Inner workings of how the TMR tool evaluates media will be open for inspection, Mr. Briggs said, and open to addition of new media as they emerge.
"A lot of social media, search and digital advertising models just don’t follow the traditional reach and frequency and cost-per-thousand framework that media-planning tools have been using for decades," he said.
In fairness, marketing-mix modeling now used by many big advertisers already can analyze sales impact from just about any marketing input, given sufficient levels of spending and a sufficiently well-defined time horizon. The problem, however, is that lower levels of spending for digital and social media often get swamped by the impact of higher-reach media, and earned media such as social and PR don’t always work on the same predictable schedule as paid media.
Also, not every campaign has as its objective an immediate sale, often focusing further toward the fat end of the so-called purchase funnel. Mr. Briggs points, for example, to automotive marketing that may aim to get a brand into consideration for a purchase that may not take place for years.
To address this problem, Marketing Evolution years ago began analyzing campaigns based on objectives often besides sales — such as changes in survey responses regarding what brands consumers are considering.
The TMR tool will look at "basically for every dollar you spend, how many people do you influence on whatever that business objective is — building awareness, changing a brand position, generating purchase intent or generating sales," Mr. Briggs said.
Analyzing much of digital advertising isn’t so different than traditional, given that it operates on similar reach and frequency data and often similar pricing schemes, he said. But social media and other earned media, that is, public relations, depart from those norms in two key ways.
The costs are often structured very differently, with much of it coming in the form of relatively fixed salary or fee costs for internal or agency staff to, say, run a social media monitoring command center, Mr. Briggs said. Traditional analysis tools also often fail to count all or some of the pass-along effect of social media.
Lack of any ROI norms may have been OK when social-media marketing was still in its infancy and considered experimental, he said. But now the discipline has been around a few years — at least in its toddlerhood — and increasingly expected to stand on its own two feet.
"Earned media and the people curating it probably need to be held a bit more accountable today," Mr. Briggs said.
Seemingly, such programs would have such a short history and wide range of reach, pass along and impact that it would be difficult to predict outcomes based on past experience, which is how the Telmar Matterhorn ROI tool works for other media. But that hasn’t been the case, Mr. Briggs said.
"What we began to see pretty quickly is that there is a range of results just like with any advertising," he said. "Some TV ads are better than others. Some programs are more conducive to social sharing than others. But there are absolutely common patterns and averages. One thing we can do is say if you spend $100,000 or $1 million, what should you be expecting to get back as results? If you’re not getting these levels, the budget should really trade over to be invested somewhere else."
At the same time, other ads in traditional media also generate social-media pass along that needs to be calculated, and draw on some of that investment in things like social-media monitoring, Mr. Briggs said. TMR can account for that, but, he said, more important, it aims to calculate the combined impact of media elements, including their synergy, rather than viewing them entirely in isolation.
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