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January 29, 2008


francois gossieaux

Hi John - I agree that we have to be able to measure social media programs and relate it back to metrics that CMOs are used to use - and I argued that this is possible on my blog awhile back - here (http://tinyurl.com/2l7dhf).

All that being said, and on a totally different level, I am also very troubled with marketing departments becoming more and more ROI-focused - especially when they are trying to break down marketing into simple linear processes in order to make it measurable. I think that we should be able to find a better way to measure the complex impact of all marketing variables on the business health and success. I elaborated on that point here (http://tinyurl.com/2kafkg).

Yianni Garcia

Great post-really gets into the value of a dual measurement model for social media ROI (quantitative and qualitative)


Moksh Juneja

I have been trying to put together a model for calculating ad equivalency model, but it is just too complex, since we have a combination of text, audio, video and images being analysed. Each medium if taken individually have their own ad systems in place. But since it is not an ideal world, they are always a combination of these elements. To top it all, we are in very dynamic environment of measurement, so if we come across an ad equivalent now, it would not be valid probably after a week. (sometimes, even a week is too long).

Scott Bauman

Yet another provocative post John. We've been discussing our model all morning, in fact, and it's a challenge. We in PR have always resisted the AE approach, but that's what resonates most with CMOs. I also agree with Francois about the creeping (and creepy) linearity in marketing today. I worried that, as often happens, great becomes the enemy of good!

Justin Hayward

Noooooooooooooooooooo! John, you mentioned the AVE word. How can it be possible, and moreso, why would it be? The people researching are doing so because of their complete lack of faith in advertising push information, so where is the value in advertising in this particular environment? Even if people did divert their spend from advertising online, we know through many studies that people are ignoring banner ads and click fraud is still completely rife through the adword model. So what is there to compare it to? It's like asking what the ad equivalent is for getting a positive top story on BBC News 24 - it can't be bought but you know it's going to make an impact!

I agree it's difficult and in its infancy, but return on interest or return on attention I think will win through as we gain more and more opportunities to look behind the curtain and really find out who is visiting, linking to, commenting on and talking about which sites, memes, social objects and so on. I'm throwing the doors open to a good kicking at my site - www.etribes.com/justinhayward - with a thoughtpiece on the power to influence - I'd welcome your comments.

Hope you're well :-)

Sean Williams

HI John - there are two problems I see with assigning equivalency to ad value. First, doing so assigns advertising to the top of the influence pyramid, which it surely is not. Just because you place an ad does not mean it is effective. How can word of mouth be equal to paid advertising? Unless, of course, we're going to permit only paid word of mouth to be assigned as equivalent. AVE implies that everything must be compared to advertising.
Second, AVE is being discredited to a large extent in the research -- how do you assign ad value for space that doesn't sell advertising, such as the front page of the Wall Street Journal? AVE typically doesn't correct for the cost of producing the ad or media placement, doesn't use negotiated rates for its data, and doesn't reflect business outcomes resulting from the ad or placement. It's a lousy metric, and we can do better, especially in social media. Is it hard to get some exec's head around "share of voice?" Sure! But our friends in marketing are only now beginning to connect the business dots between impressions and prospect action. Let's not go backwards.

John Bell

Lots of good discussion here. many people bridle at the thought of comparing a WOM program to a paid advertising model (be clear - I am talking about comparing the value and am not talking about paid WOM e.g. pay-per-post which I do not support)

I do think the answer lies in defining what WOM delivers OVER AND ABOVE advertising. We know intuitively nd by general studies. But a brand manager at coompany x (where most of teh marcom budget lies) is channel planning, s/he is figuring out how to spend their budget to achieve short term sales goals and longterm brand goals. If we keep saying our stuff has no points of comparison with their other choices, we will be shouting into the wind for far too long.
I wish every marketers favorite metric was teh Net Promoter Score. It's not. We need to be clear about where our work falls in the "funnel" and how it compare sto other marcom choices.
>The Funnel>

Kami Huyse

How about what it delivers to business value? I am working with a client now and we used a survey to determine how many people heard about and attended an event based on the Internet marketing effort. We then were able to apply their admission price (basically) to the total who had learned about it from the Internet to get the total amount this particular WOM initiative brought in. We also asked them about billboards, tv, etc. Now we can make all kinds of ROI comparisons. How much $ did we bring in compared to advertising? What was the CPM cost to reach and motivate our target audience to act compared to other tactics? Etc.

I admit it is harder to come up with a custom fitted method of measurement, versus a cookie cutter AVE solution, but the problems with AVE make that a no brainer.


John, measurement is fluid and will never again be absolute. Ad equivalency, brand favorability, clips, blips, sales, phone calls. Qualitative stuff seems slippery to me if it's not tied to an outcome. Evidence, Wendy's ditched the Red Wig ads saying that it generated great buzz, but sales are down. Frankly, I think ad creative is the scapegoat for other causes, but I'm sure the ad shop wasn't only given sales as the single measure of success. If so, they probably would have spent the $50MM on kidnapping people in line at McD and dragging them to the nearest Wendy's. It requires many many conversations about what's real and what's fake. If I asked you how much a web site costs, you'd come back at me with 38 questions to begin to scope what I meant. Same is true for measurement. Think about any product, service or issue you've take a shine to lately. Reverse engineer how that came to be, and marvel at how many things came together. To accurately predict the funnel of interplay of 153 touchpoints with millions of people is a statistics equation with a big margin for error. In planning (connection, transmedia or whichever)it has to be adaptive, but requires constant rebuilding. Here are a couple of the questions I ask when someone asks how to measure it.

What measures are you using today for marketing, pr, direct, ecommerce, retail, et al.?

What connections or disconnections have you made between those disciplines to capture or predict success?

Who would be the best sub-group to gather to discuss establishing a measurement platform?

What measurement tools do you currently have in the market? Research, surveys, satisfaction scores, online panels?

Sean Williams

Okay, John, that's a point of clarification (regarding The Funnel) about where in the marketing mix WOM and other unpaid communication lays -- this process doesn't attempt to make all communication equivalent to ads -- it simply shows where along the continuum of communication choices ads reside. Some work by David Michaelson and Dr. Don Stacks suggested that the PR multiplier was a myth (but it was a small experimental study). Is anyone familiar with research comparing advertising with WOM?

KD Paine

John, how can you call for a single AVE-style metric when we all know that every organization has a different goal and objective, and goals and objectives drive the type of measures you need. If MADD's goal is to eliminate drunk driving, the success of their WOM program is measured in lower drunk driving deaths, and perhaps more donors and supporters. How does an ad equivalent stack up against outcomes that tie to corporate objectives. Facebook is measuring its success in terms of both new users and increased active users -- a much more tangible connection to the bottom line than AVEs. Other companies are looking to measure success by the degree of engagement http://tinyurl.com/yo3a6v. Comparing social media success to what defined success two decades ago makes no sense. What does make sense is to encourage organizations to better define that "R" in ROI that they're going after.

John Bell

K - I am not calling for a one-size fits all advertising equivalency solution. I am calling for mature metrics that brand managers can use to compare their investment.

We measure engagement. We measure against behavior change. We measure against a variety of business objectives and communications goals (see the Funnel)We have some pretty sophisticated clients and a variety of them.

If you are going to move major marketers towards embracing WOM, we have to make it as easy as possible. If a way to compare against established marketing measurements like advertising helps than that is ONE of the things we should do. Meanwhile, we are defining alternative ways to define ROI that carefully articulates the value delivered from a variety of WOM-based programs. That's where we start to better understand the marketing value of engagement, atention and the fundamentals of the NPS.

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