The first push back regarding social media is the dreaded ROI question, right?
There’s also been a lot of talk about how conversation and dialogue can’t be measured in terms of revenue too. Maybe that’s true. Or, maybe we’re measuring the wrong things or we’re only capturing part of the picture.
Since I come from a communications background I never learned much about web analytics until I took it upon myself to learn. It becomes much easier to have the ROI conversation when your piece fits into the overall sales or cost savings equation. However, understanding how ROI is measured in other online marketing disciplines can definitely come in handy.
Mind you, I don’t have all the answers and I know each situation is unique, but I think this fact is worth highlighting. Most conversion analytics credit the final click, with credit for a conversion or sale. This means that the last ad, or affiliate link or referring site gets credit for the sale or conversion. Each one of these types of click installs a cookie in the browser that determines which referrer gets credit. Most links shared in social networks do not come with cookies, but Google Analytics will still pick up the traffic from the referring site.
Why is the last cookie question important for measuring social media ROI?
I have been thinking about this for awhile since having a conversation with Angel Djambazov on the way to Blog World Expo (he and I were on the same flight from Seattle to Las Vegas for the conference). He explained to me how the final cookie, or final click, practice can often skew data. Then a recent post from Rob Birgfeld inspired me to share this information with you here.
Rob’s post on the “myth of the last click” cites a study by the Microsoft Advertising Institute that states, “users interact with an average of 2.2 other ads from the same brand over two days before the conversion.” This study includes a sales funnel of 14 days. Rob then asks what if we were to extend the sales funnel to 90 days?
“…let’s expand the conversion funnel to 90 days, in which case the user is exposed to an average of 18.5 ads over a three-month period… [the] operating theory is that all of these interactions play a role in the final conversion, and they should not be discounted when quantifying ROI. According to Strong, 94% of touch points in today’s “last click model” are thrown away and not given any credit for a sale.”
Several of the touchpoints cited in the above quote could definitely include interaction in social networks and social media channels.
The answer isn’t who gets monetary “credit” for the sale, but rather, doing what it takes to fund, maintain and foster the truly valuable channels that bring customers and that final click into perfect alignment. Maybe one way to examine the data is to look for correlations between social media mentions and actual click-throughs from other online marketing channels.
The idea that clicks trump views and impressions may have been overplayed in social media to give the appearance of substance and business prowess. However, the problem with the final click metric is that it will often discount valuable channels like those in social networks if they do not generate a money-shot style click upon the first impression.
Based on this information provided in this study, my advice to anyone searching for the ROI of social media is:
- Question how online conversion is being calculated and whether it’s a final click metric. If so, recommend an alternative view to accompany final click metrics based on engagement and look for correlations between the data.
- Don’t be so quick to abandon outreach efforts that appear to be underperforming based on a final click model.
- Track engagement on your site from referring sites. Drill down time on site and number of page views by each referring blog, community or social network.
- Examine the number of return visits generated by social networks.
- Examine the bounce rate from visits referred by social networks.
- Look for trends between mentions, sentiment and conversion that attempt to identify the real time it takes most customers to complete the sales cycle.
Social media has the potential to generate a valuable first impression, but it may not ever generate a final click. Aligning outreach efforts in social networks with other types of online marketing and SEO efforts can give a much more holistic view of what networks and channels are adding the most value to your entire sales funnel.
By the way, one of the best presentations on determining the ROI of social media is by Olivier Blanchard, aka @thebrandbuilder on Twitter. Check it out here on SlideShare.
What other types of analytics do you use to determine the true ROI of social media beyond fluff and without giving too much weight to the final click and worrying about who gets the last cookie?
Image of Google’s homage to Cookie Monster and Sesame Street posted by COG LOG LAB.