Well who’d have thought it, this Social Media thing actually works
The other day I wrote about a commentary on ClickZ entitled the ‘ROI of social media is zero’, which made the point that you can’t transplant old school ad evaluations to social networks as there’s no like with like comparison with the numbers.
Specifically, the point of the article was that targeting a small number of people online might do more than targeting a large number offline.
Proof that this is the case comes from ComScore. As reported in AdAge today, an unnamed personal care product spent $1 million (£700k odd) on a campaign on MySpace.
The theoretical reach was 77 million consumers exposed to the campaign, yet only 765k (less than 1%) visited the advertiser page on MySpace, of which 358k then visited the advertiser’s website.
Pretty poor, right?
Well actually that $1 million spend resulted in that less than 0.5% of consumers who reacted, generating $1.28 million in offline sales, or a return of 28%. 83% of those sales were actually for company products that weren’t advertised in the campaign, the so called halo effect.
Or a less generous explanation – the brand didn’t figure out what MySpace users were likely to be interested in!
And on the whole what is your website good for theme, I wonder what would have happened had they not directed people to the brand site (especially as the aim was to generate offline, not online sales) but had somehow given them the ability to find out about the product still within the social arena .
Finally, the AdAge piece quotes an analyst in making the point that on social networks, your dollars, euros and pounds go further than with offline ads, and so more isn’t necessarily more:
According to Gregg Ambach, of Analytic Partners: “Of course, what you always grapple with is if they suddenly went [from $1 million] to $10 million in digital, would the return stay where it is? In my heart of hearts, I think the answer is no.”
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Thanks for the comment Martin. I was going to add to it, but actually you made me think about social media evaluation more widely, which has resulted in the latest post!
Interesting methodology they used, directly linking people’s internet usage and loyalty-card programs to see real-world sales. I’d want to try this pairing out a few times to make sure it’s not biased in some way. As a commentator noted, the numbers don’t seem to factor in the cost of goods sold, which means the company lost money. Still, interesting way to correlate online marketing and offline sales.
I too suspect that more money wouldn’t necessarily translate into more sales. It seems to me that social media campaigns would do well to focus their efforts on immediacy (having someone answer tweets) rather than processed slickness (spending 3 months and hundreds of thousands of dollars on a slick ad).