Who is in control of your brand?

Some good research from Nielsen came out recently as you may have read in B&T and Digital Media that argues the value of online advertising in terms of recall, recommendation & purchase influence.

The research also revealed intention to purchase increased by 4.9% following exposure to an online advertising campaign, with brand sentiment increasing by 5.3%.

Display advertising also correlated with a rise in awareness, with top-of-mind awareness jumping 3.1% while prompted awareness increased by 3.5%. The likelihood of a consumer recommending a brand following exposure to an online advertising campaign also increased by 4.4%.

This leads me to 2 main thoughts

1. How does this compare to TV, print & radio? (using the same benchmarks & research approach)

Without context these numbers might be under or over valued as it could smash or be smashed by these other channels? It would be good to put them side by side to see how they interact. And what’s the impact when multiple touch points occur, say TV & Online, does it improve, reduce, increase, change the impact of the communication?

2. More importantly can marketers drop their addiction to clicks?

Clicks, performance & data are both the power and the Achilles heel of digital media. Thanks to many publishers, like Google, you can buy a visitor to your website. This is great because it reduces the risk, it’s not so great because the value of the exposure to media (banner, search result, edm, etc) is missed, all the focus is on the click.

So what?

I recommend clients establish an ROI (return on investment) calculator, where you add up all the outcomes from a campaign and compare it to the cost of the communication. This helps you learn & evaluate performance in a more balanced and reasonable manor. (I’ve explained how to create an ROI calculator here)

One piece of the ROI puzzle should be exposure, it may not be as valuable, but it has to be considered.

This kind of research helps us understand the value, however, we (marketers) need to assign value to it first, both rationally and in our guts.

An ROI (Return on investment) calculator can help you evaluate the performance of your communications spend. Not many of my clients have thought about it, and it’s an important place to start when getting into digital marketing.

The basic premise is that you can add up all of the outcomes from a campaign and compare it to the cost of the communication. This helps you learn & evaluate performance in a more balanced and reasonable manor.

The numbers themselves are not particularly meaningful and are arguable, however, the value is when you COMPARE one campaign to another.

Here’s an example of using an ROI calculator

The Apple Co. ran two campaigns at separate times of the year. The goal of an apple company is to sell apples on their website (who’d have thought).

Campaign 1 achieved 10,000 visitors to the website, 200 orders, 12 enquiries & 500 email sign-ups. It cost $50k to run & delivered $13k of value, which equates to an ROI of $0.27.

Campaign 2 achieved 9,000 visitors, 400 orders, 50 enquiries & 500 email sign-ups. It cost $50k to run & delivered $24k of value, which equates to an ROI of $0.49.

Now you can more easily compare the performance of each campaign. Campaign 1 returned $0.27 and campaign 2 returned $0.49, so campaign 2 was nearly twice as effective.

How to create a digital marketing ROI calculator

Step 1. Create the measures

- Visit to your website
- Subscription to email database
- Enquiry
- Online order (or booking, or request)
- New facebook friends

Step 2. Assign values to the measures

For example, a visitor might be $0.10 and an order might be $50. (Or the value of the order might actually be the sale value, or profit margin. Google Analytics can report on this, read their blog here).

Step 3. Track & add the values

Collect all the data, how many visits, orders, enquiries etc and multiply them by the value you assigned in step 2. For example, 500 orders would be 500 X $50 = $2500. (Based on example above). Then add all of these values together, this is your Outcome Value.

Step 4. Divide that value by the cost

If your final outcome value is $2500, then divide that by the media spend, assume it was $4000, that would be $2500 divided by $4000 = $0.62.

Step 5. Compare campaigns

As I mentioned earlier, the ROI value you come up with is kinda meaningless, unless you compare it to other campaigns.

Step 6. Get sophisticated

If you want to take it to the next level, you should have different calculators for different campaign objectives. For example the above is very sales focused, however, your objective might actually be awareness of a new product or service. Have an ‘awareness’ calculator would put more value on the reach & visitors, less on the orders. Then you can fairly compare awareness campaigns separately to conversion campaigns.

Also, you can apply this methodology to each piece of activity, for example, you could compare the ROI of search to the ROI of banner, EDMs or Social Media.

Here’s a template

This template should get you well on your way:  http://www.box.net/shared/i6x105jfil

Respect to Oliver from Brand Builder (@thebrandbuilder) for this charming and no-bull preso.

I totally support this approach, and glad that he’s articulated it so well. Social media isn’t about followers, twits, comments or visitors, it’s about achieving marketing outcomes, generally SALES – directly or indirectly.

As social media analysts and consultants fall off the pages of the AFR and mainstream media, the excitement is rapidly declining.

In 2009 excitement will be replaced with its less glamorous older cousin ‘measurement‘. People and brands around the world have experiemented with all kinds of social media and its been fun, but now its time to count the cookies, and deliver solid a ROI.

Kate over at Social Abacus brings together the predictions of industry leaders, analysts and researchers on social measurement in 2009.

Top 4 predictions for 2009:

* We will substantially advance our understanding of individuals and the meaningful connections they have.

* We will identify methods to tap what people are *really* thinking, feeling, and paying attention to, meanwhile gaining insight on what a measurement is truly capturing.

* We will determine how to measure the value of social interactions and attach financial value, whether we’re monetizing attention or a new medium.

* We will build better tools to manage– analyze and visualize– massive volumes of data, primarily tapping the evolving social graph.