RSR Research: Marketing Metrics in the Age of Social Media
By Nikki Baird, Managing Partner, RSR Research
Through a special arrangement,
presented here for discussion is an excerpt of a current article from Retail
Paradox, Retail Systems Research’s weekly analysis on emerging issues
facing retailers.
Ironically, just as the technology and the
infrastructure is approaching “reasonable” for in-store implementations,
something is happening online: the results of online marketing are becoming
more difficult to measure. Think about it – the metrics that most people
cite for online today are these “surface level”
metrics. Things like “click-throughs” and “page views” –
traffic and conversion. These were the things that we could measure in the
early days of the web.
But now we have Web 2.0 and social networks,
and far more complex sites – all of which are completely underserved by
standard, surface level metrics. Like in the store, traffic and conversion
rates (sound familiar, online marketers?) are only proxies to help us understand
what we really want to know: customer engagement, and how that engagement
translates into sales.
Online clickstream data fills in the blanks
for eCommerce store navigation, but as with stores, it doesn’t give you
the whole picture – and that picture is increasingly difficult to bring
together. I encountered the concept of “the deep Web” just last
week – the enormous amount of content that exists on the Web today but
is not indexed by search engines. Search engines can’t find a lot of this
content because it is dynamically generated – in other words, the “page” that
the search engine would index does not exist until a user creates the need
for it, and the page goes away as soon as the user’s need is done.
Just as there is a “deep Web” there
are “deep metrics,” and marketing has not discovered them yet
– in part because we’ve become so hung up on the metrics we use today that
we’ve forgotten that they were mere (and inadequate) proxies to begin with
– they were simply what we could get. I think we can get more. For example,
some companies on the leading edge of social networking as a business tool
are looking at things like number of “friends” an individual
has, or the rate that a person adds friends on a social networking site,
as a way to understand the relative influence that a single person has.
The more you understand a consumer’s influence, the more valuable that
influencer can potentially be for your brand.
Which is an interesting statement to make,
considering concerns over consumer privacy. I can see two futures for metrics:
the pure performance-driven metrics (Did it lift sales? Did people respond?),
and this influencer/social engagement model. They exist at two completely
opposite ends of a spectrum.
At the performance end, the world is reduced
to triggers, behaviors, and context. If you see a behavior in a certain
context, then it doesn’t matter who it is, what the product is, or anything
else – behavior A in context Z results in offer N. And offer N is measured
purely by performance – did the individual respond?
At the influencer end of the spectrum, not
only do we want to know all about you, Ms. Consumer, but we want to know
who your friends are and how much time you spend communicating with them.
It’s all about your profile or persona – or even the multiple personas
that make up “you.” The more we know about you, the better we
will be at meeting your needs.
Discussion Questions: What hurdles do you
see in measuring online metrics around shopper engagement? Do you also
see online driven metrics breaking down into performance-driven criteria
versus influencer/social engagement?
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8 Comments on "RSR Research: Marketing Metrics in the Age of Social Media"
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There is still so much we need to learn, define, measure, and project about the behavior of each shopper by himself–adding a layer of cross-shopper social engagement is basically useless at this point. In fact, it can be a harmful distraction to retailers and analysts who still know so little about the basic behavior of the subject (and subjects) they are studying.
Let’s walk before we can run–and we’ve barely reached the crawling stage when it comes to in-store shopper behavior.
Nothing matters but sales. If a Facebook campaign costs ten cents for every dollar of sales lift and a Twitter campaign costs 5 cents for every dollar of sales lift, would a smart advertiser need to know more?
If an ad reaches the richest people on the planet and they love it, but they don’t buy the product, who cares? If the ad reaches the target customer 125 times a day and she doesn’t buy any more of the product, is that cost-effective?
For retailers, the scary thing about social media is the lack of control. Unless you are Belkin, you can’t directly praise your brand. But you can identify the people that are most influential and make sure they have a good experience–then you hope for the best. That’s the same relationship retailers have had with reviewers in the past. The only difference now is that there are lots more reviewers with faster distribution of their opinions.
Best Buy uses an application that monitors customer sentiment on the web, combing social sites and Twitter feeds. When something bad is said, it’s important for a retailer to react quickly to remedy the situation before the ill will spreads.
I believe that both performance and engagement measures are necessary, with performance being the more important one, for now.