RSR Research: Marketing Metrics in the Age of Social Media

Mar 09, 2009

By Nikki Baird, Managing Partner, RSR Research

Through a special arrangement,
presented here for discussion is an excerpt of a current article from Retail
, 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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Joel Warady
Joel Warady
13 years 2 months ago
There will always be CEOs who will ask their marketing people to supply the metrics, and defend the marketing investment. But as we move into Web 2.0, and social networking, the metrics will be less important, and the chatter will take on a greater significance. Quantitative marketing will always have a place, but the new marketing is more focused on the qualitative side. Take a look at what is happening in real time on Facebook. If an individual has 740 friends (happens all of the time), and one of those friends posts a wall post praising the product, 738 additional people will see the “feed.” Now if each of those people have 100 unique friends, exponentially you can see how the message will be spread. Here is the problem. Because it all happens dynamically, no marketer will ever be able to measure these metrics. Companies will have to live the social networking life before they get it, and once they get it, they will be less concerned about gathering the metrics, and more concerned with… Read more »
Peter Fader
13 years 2 months ago

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.

Anna Murray
Anna Murray
13 years 2 months ago
I admit it. I’m impatient. Those of us in online media have been trying for *years* to get people to think past the click-through. I’m getting to the point where I think that’s impossible. People like their easy metrics. To be honest, I have heard the cry, “Online media needs to come up with better ways of measuring things so we can understand them!” for too long. I’m tired of it. Here are the facts… –We already *have* more sophisticated ways of measuring things. From surveys, to complex algorithms that show the pattern of influence all the way up to the last click and in-store behavior. –No one wants to pay to put these tools in place. –In addition, no one seems to want to take the time to understand the complexity of the space. Click-through is just easier, so people stick with it. –So everyone keeps whining that we don’t have a “better way to measure things.” What people mean by a “better way to measure things” is an EASIER way to measure things.… Read more »
Mark Lilien
13 years 2 months ago

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?

Ralph Jacobson
13 years 2 months ago
It is very interesting that now, at the end of the day, I look at the three topics for discussion and this one on social media has by far the fewest comments. Is it because most of us are either 1) Uninformed on the subject, 2) uninterested, 3) Afraid to comment because they feel they are not informed enough, or??? This is one of the most top-of-mind issues facing both manufacturers and retailers. But again, it comes down to tangible metrics. Just log onto any top virtual world, like Second Life, or other social network. You will find hundred of brands represented. This is the best way to test new product concepts without the real world expense. The best way to reach untapped audiences for your products. The best way to measure your brand’s value at any moment in time…. And we are hung up on metrics?! WAKE UP! This is where you need to be today. Certainly tomorrow there will be new choices, but for now, invest in an online presence. Learn from other… Read more »
Phil Rubin
Phil Rubin
13 years 2 months ago
There are both challenges and opportunities with in-store as well as online customer metrics. Part of the broad challenge is that merchants are still not focusing on the right customer metrics. More and more we are seeing new CRM platforms, primary SaaS models, that have mechanisms for linking online social media behavior to other customer data and channel addressability. However, whether online or off (i.e., in-store or through some other channel), many merchants and marketers still fail to link key metrics to the one that matters most: Is Ms. Shopper buying something? Is she buying more? Is she buying more often? Is she trending up or down versus prior periods? Social media adds a great dimension of engagement and influence, but only if those measures are ultimately tied to people buying stuff. By closing the loop with purchasing behavior, it will be much easier to both justify and obtain incremental marketing investments for customer marketing and social media. Much like measuring customer satisfaction or the in-vogue NPS (net promoter score), there is a lot of… Read more »
David Dorf
13 years 2 months ago

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.

Gene Detroyer
13 years 2 months ago
Why do we spend so much time looking for complex metrics that measure everything but the object of the communication? What’s that? It is all about people buying products. Perhaps if we focused more on being able to establish that translation and spent less time on measurements that I find esoteric, we would actually come up with some executable answers. Yes, the connection between communication and action is difficult to measure, but so are the alternatives. We take the most basic measurement (reach & frequency, click through and page views) and know immediately that we want more info. But, instead of trying to find the trail to consumer action, like buying the products, we tend to follow the original reach and frequency models and just make them more complex without really getting to the answer that provides an ROI on that communication. I have no doubt the fast growing technologies of communication will one day; if not already provide the necessary data. I do doubt if somebody will focus on measuring it. I am curious… Read more »

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