60% of US marketers reporting they measured performance in click-throughs

MAY 7, 2010 

ROI lags behind in measurement

Online marketing has been touted for its measurability, a quality that should make it easy for marketers to determine effectiveness and value for money. Despite widespread recognition that the click-through does not measure the full effect of an online ad—even ones placed with direct response objectives—and calls for better branding metrics, many marketers still rely on the easy-to-track click as their top performance metric.

A March 2010 survey by Chief Marketer showed the click remained on top, with 60% of US marketers reporting they measured performance in click-throughs. Fewer than two-fifths measured overall return on investment (ROI).

Those responses were similar to the 2009 edition of the same survey, and Chief Marketer suggested respondents were sticking with “old-school metrics” while paying lip service to the importance of ROI.

Similarly, Collective reported that in February 2010, click-throughs were the most common measurement of ad network performance, used by 64% of responding advertisers.

Datran Media found in December 2009 that marketers worldwide considered conversions the most important success metric, with nearly 90% saying it was “very important.” Click-throughs were rated important by 56.7% of respondents. But when Datran asked what types of measurement marketers actually used, clicks came out on top, with 72% of respondents tracking them.

These measurement practices left one-quarter of respondents to the Chief Marketer survey unsure whether interactive campaigns produced greater ROI than traditional marketing efforts.

The CMO Council’s “State of Marketing” survey did not ask about click-throughs specifically, but found marketers worldwide were most likely to measure their campaigns through page views, registrations, and the volume and origin of site traffic.

Asked about their online marketing performance measurement ability, the plurality of respondents to that survey (44%) were either working on increasing their capabilities or “struggling” to put a value on their interactive spending.

“Marketers’ familiarity with clicks is only one factor that contributes to its continued usage as the top metric,” said David Hallerman, senior analyst at eMarketer. “Click are easy to count, too, and therefore an inexpensive metric to gather.

“In contrast,” Mr. Hallerman said, “measuring either brand effectiveness or the indirect effects of online ads—such as how display ads contribute to search clicks—is more complex and typically costs more to accomplish that just tallying up clicks.”

Keep your business ahead of the digital curve. Learn more about becoming an eMarketer Total Access client today.

Check out today’s other article, “When to Respond to Negative Buzz.”

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Will Social Strategizing Bring ROI?

APRIL 22, 2010

One-half of companies have a social strategy

A majority of US marketing professionals claim social media is now “invaluable” to their business, according to April 2010 research from online marketing firmR2integrated.

While relatively few marketers reported social was pointless and overhyped or too complicated to deal with, most are still not increasing revenues or otherwise profiting from their social efforts.

Although one-half of respondents said they had a social strategy in place—considered critical for success in the social space—only 35% thought they were making money.

Strategy does help, though. Respondents who said they profited were twice as likely to have a formal strategy. They were also more likely to have staff dedicated to managing social media.

Marketers’ main goal in implementing a strategy was better lead generation, followed by brand monitoring.

The biggest obstacle for social strategies was not having enough data to come up with a measure of return on investment. Management buy-in was also a problem, and more than one-fifth of respondents said their audience was not active on social media.

“Marketers clearly recognize the need for, and see the potential of, social media, but are still trying to develop models that increase real engagement which then leads to profitability—if that’s a goal for implementing a social strategy,” said Matt Goddard, CEO of R2integrated, in a statement.

“Despite the presence and popularity of social media, many companies remain relatively unfamiliar with its practices, pundits, and principles,” he said.

Marketing management firm Unica reported in March 2010 that strategic integration of social with other marketing efforts varied by channel. MarketingSherpa found that in late 2009 only one-quarter of social media marketers had reached the strategic phase.

Keep your business ahead of the digital curve. Learn more about becoming an eMarketer Total Access client today.

Check out today’s other article, “Finding Consumers Who Are Ready to Buy.”   

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Customer Engagement Survey Shows Twitter is King of ROI

I’ve been a contributing analyst for the eConsultancy/cScape Customer Engagement Survey over the past few years. The 2010 edition has just landed and I thought I would share with you the data that jumped out at me.

Email Newsletters Fading?

The 2nd Customer Engagement Survey saw businesses focusing their efforts on using email newsletters to improve customer engagement. An incredible 69% of companies stated that they had measured a tangible improvement through their e-newsletter campaigns so it was not a surprise that 59% planned to invest heavily in email marketing by the time we came to the third survey. By contrast, investment in social networks – such as Facebook – was down on the list of priorities with only 36% of companies planning to increase their investment in that area.

Social Networks See Huge Investment

So, what happened now we are on survey four and looking at 2010? Those that took a chance and invested in social networks saw a big return on investment. For companies, email newsletters still rated as the tactic offering the highest tangible improvement (67%) but a whopping 44% – almost double the percentage from 2009 – have discovered that social networks helped increase their online customer engagement. That return on investment has clearly caught the attention of both companies and their agencies. In 2010, the survey predicts that 61% of company executives will be increasing their focus on social networks, while agencies are even more bullish, expecting their clients to spend more on social networking (66%) than even email newsletters (41%).

Twitter’s King of Engagement

Perhaps the most stunning statistic is the percentage of companies that plan to invest in Twitter as a channel for customer engagement. In last year’s report, Twitter barely registered with survey participants with just 7% of companies realizing improved customer engagement from Twitter, hence only 13% planned to invest in Twitter in 2009. What a difference a year makes! Twitter has seen massive growth and companies are scrambling to make the micro-blogging channel a key part of their customer engagement efforts. In fact, with 35% of companies seeing an improvement in their customer engagement from Twitter in 2009, almost 44% of companies plan to increase their investment in Twitter in 2010. That’s a three-fold improvement over last year!

Engagement = Conversations

What conclusions can we draw from this? Well, it’s apparent that companies are realizing that customers expect engagement to be a two-way dialogue. Email newsletters are a great way to keep customers updated but they don’t really engage them. Instead, companies are seeing measurable benefits of actually having a conversation with their customers be it via Facebook, Twitter or whatever, making them willing to invest more of their marketing/PR budgets to reap the fruits of that engagement.

Want to get your hands on all the data? Get your copy of the cScape/Econsultancy report!

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Maximize the Return on your Advertising Spend

December 1, 2009 Discuss

Chang Park, Executive Director, Nielsen Analytic Consulting, Greater China

SUMMARY: Today’s tough economic marketplace, coupled with highly price-conscious consumers, is forcing companies to take a look at which marketing activities maximize their return on advertising dollars. Nielsen has developed eight guiding principles to show marketers how to increase ad effectiveness.

With consumers becoming increasingly price conscious in a highly competitive marketplace, maximizing the return on their advertising spend is more important than ever.

Ensure ad dollars are allocated to activities that best maximize sales…

Marketing return on investment (ROI) is the amount of sales achieved for every dollar spent on marketing/advertising. In today’s tough economy, measuring this return is vital to ensure that ad dollars are allocated to those activities that best maximize sales. The steps necessary to achieve the greatest return differ across brands, and an evolving tailored strategy is necessary.

Measuring marketing performance at the brand level will ensure that good advertising spend isn’t thrown behind underperforming marketing tactics. Through numerous studies conducted worldwide, Nielsen found that the average short-term ROI (sales within three months of media execution) is 9%.

Advertising effectiveness could be increased 30-40%…

Room for improvement
When looking at the overall efficiency of marketing strategies in achieving that 9% return, Nielsen discovered that there is room for improvement. Research found that, on average, advertising effectiveness could be increased 30–40%. The only investment necessary to achieve this increase is to take a closer look at how well each media and promotion type worked for each brand.

Eight guiding principles can help marketers maximize ROI.

1. Consider both the short- and long-term sales impact of marketing programs.
   An advertising campaign is only effective in building sales if the right marketing tactic is employed. Online campaigns and co-op programs are effective in boosting short-terms sales, while television and PR remain key to ensuring long-term brand loyalty.
2. Choose the right portals and campaigns for online success.
   The Internet is a powerful medium that can reach billions of consumers. To capitalize on its reach, you need to understand the percentage of the target market using the web, how they use it and for how long. Then tailor the campaign accordingly.
3. Influence target groups with magazine advertising.
   Unlike daily newspapers that have a broad reader base, magazines have a clearly segmented target group. In addition, newspapers are disposable, whereas magazines are read after their published date.
4. Focus on campaigns that create the greatest halo effect.
   Marketing initiatives that positively impact the sales of the advertised brand and other brands in the portfolio should be invested in further.
5. Drive brand loyalty with TV advertising.
   TV advertising remains the most valuable driver of brand equity due to its effectiveness at building brand awareness and subsequently sales. TV’s residual effect on stimulating sales is greater than any other media.
6. Create synergies across media to produce additional uplift.
   Regardless of the media being consumed, a constant brand message must be conveyed tailored to how the consumer interacts with that specific media.
7. Create brand awareness through in-store advertisements.
   Excessive discounting and promotion erodes the brand’s equity. Using displays and features are more useful at building long-term incremental sales due to its emphasis on building brand awareness and value.
8. Invest in consumers with premium gift packs.
   Although more costly in the short-term, an expensive giveaway can deliver better long-term sales volume because of the perceived value to shoppers.

Marketers have the opportunity to optimize advertising effectiveness by up to 40% by being mindful of how each piece of the marketing mix performs for each brand.

• Download the full report, Is Your Marketing Investment Delivering Expected Returns?

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Measuring Social Media ROI

Measuring Social Media ROI

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