On Digital

John Bell and I formally introduced the Conversation Impact(TM) measurement model at the Advertising Research Foundation’s Audience Measurement 4.0 on June 23rd.  Here’s a brief overview of the model, its goals and planned evolution.

The model was developed by our team to provide brands with a comprehensive, recognizable framework for tracking social media campaigns.   We relied heavily on our experience with a range of social media campaigns for both B2B and B2C clients, and considered the types of questions and reporting requests we receive with every new project or request for information.

We focus on simplicity and comparability across media - the latter, to help guide marketers with media allocation.  We categorize our metrics into 3 areas, corresponding roughly to objectives and “marketing funnel” stages; each is shown below, with representative metrics (the metrics are selected based on unique client needs).   Included are both familiar and new metrics.

Image courtesy of Crimson Hexagon

In an earlier post, I summarized the results of a study suggesting that several characteristics of movie word of mouth or buzz correlated well with expected total revenue over the movie’s release cycle.

There’s been a tremendous amount of word of mouth buzz surrounding this past weekend’s release of The Dark Knight, so I wanted to see what types of opening box office might be associated with pre-release buzz.

As a comparison, I also looked at volume of word of mouth around Hellboy II (the top release last weekend).

Direct marketing has long relied on good experimental design and techniques such as A/B testing to optimize ROI.  One of the appeals of Internet marketing has been the ability to optimize and track ROI on campaigns, and that’s also one of the ways that early Internet advertising was able to secure a foothold in the savvy marketer’s budget.

The use of (and buzz around) social media has been growing rapidly.  Is it possible - and, just as importantly, appropriate and desirable - to bring a comparable level of experimental and planning rigor to social media?

My short answer: yes, it is possible, appropriate and indeed very desirable for at a subset of social media and a subset of objectives (specifically, for branding/advocacy and for purchase/intent to purchase).

In deciding how effectively a new product (or service) can leverage social media, among other factors, I look for whether the product offers a genuinely different/unique and communicable benefit that’s relevant to a socially addressable demographic, i.e. a market that can be efficiently reached or influenced through social media.

As a pet (dog) owner, I’m interested in solutions that can help clean up after my happily shedding dog.

Let’s take a quick look at Eureka’s recently launched Boss 4D pet-friendly vacuum cleaner.

There are some brilliantly creative uses of social / conversational media - desktop apps, conversation monitoring, customer service programs, word of mouth and buzz creation services, facebook and myspace apps and games (to name a few) - that could potentially be very helpful for a brand seeking to expand its presence online and gain market insights.

From the perspective of a brand manager, marketing manager or agency seeking to maximize the value of their company’s /client’s marketing budget, however, it’s very important to understand how to allocate funds.  What metrics make sense to use for allocation optimization?

Here are some suggestions based on popular social media objectives. A TNS Media Intelligence / Cymfony late 2007 phone survey of 71 marketing professionals in the US, Canada, the UK and France suggests that marketers generally have the following objectives for social media:

Marketing messages that are delivered across multiple (overlapping) media are often more effective than those delivered across just one or two media - even if the reach and frequency in those one or two media is high.

It’s worth exploring extending this marketing campaign notion to the creation of “distributed branding” through a web strategy that creates brand presence wherever target consumers “live” on the web. This strategy effectively maintains brand awareness over time at a relatively low cost.

In implementing a distributed interactive branding strategy, it’s helpful to know both what your target users are doing online and by whom they might be influenced (friends, children and colleagues)*.  While you’ll probably want (or already have) more detailed use data for your target audience, below is a helpful overview graphic from Forrester Research / Businessweek (main article) that summarizes online activity by age segment. In a nutshell, for people age 18-40:

If you’re not already using word of mouth campaigns for new product/service launches because of uncertain ROI, you need to read this! Research recently released by word of mouth companies BzzAgent and ChatThreads suggests that word of mouth may be measurably more effective than one of the current gold standards for online sales conversion: search engine advertising.  Furthermore, word of mouth campaigns may be 20-60% more cost-effective for branding than other media. Read on for details.

Intent to Purchase / Sales Findings

BzzAgent’s research shows that intent to purchase among participants in word of mouth campaign conversations ranges from 10-15% depending on the sector (people apparently love talking about food & candy):

Word of mouth campaigns have occasionally played an important role in the marketing of new entertainment and media (movies, music, books and games), but research to establish the major drivers of success has produced mixed results.  As a result, social media spend and monitoring is still a relatively small portion of the overall entertainment media spend.

However, a new research paper by Dellarocas, Zhang and Awad, has used different analytical techniques to demonstrate that – among other factors like box office revenue, marketing budget and star power – a movie’s early word of mouth (quantified as volume of online movie reviews, tone of review and the gender mix of online reviewers over the first few days of a movie’s release) has a significant impact on forecast movie revenues.

In the face of uncertainty in new media spending – What’s the ROI for blog outreach? Do widgets produce measurable returns? Is spending on word of mouth scalable? - it’s tempting to retreat to the familiar.

One rough rule-of-thumb for media/ad spend is the 70/20/10 rule (see What Sticks by Rex Briggs and Greg Stuart).  The rule suggests something along these lines: spend 70% of time/resources on proven techniques and media, 20% of time/resources on slight variants of proven techniques and media; and 10% on tests of brand new media and techniques.

In the aggregate, this model might make sense.  But, as always, the devil is in details: what’s proven media and technique for one product stage may in fact be unproven at another product stage; high-ROI media for one product stage may be low-ROI when deployed at a different product evolution stage.

This blog is for professionals and individuals who want to successfully create, launch, build awareness of and sell great products/services in the most efficient way possible.  People who’d find the content interesting include: CEOs, CIOs, CMOs, brand and product managers, and advertising & media professionals.

The primary content focus of the blog is on harnessing new technology to market and sell innovative products and services.  Innovation is necessary to compete, but it isn’t just about building better things or providing better services – it’s also about intelligently using tools to connect those great new ideas with the people who (will) love them.

Finally, for innovation to be sustainable, it has to deliver value profitably.

Here are some ideas (from myself and others) on how to harness new technology to make this all click.  Please join in the conversation!