Social ROI part 1: Marketing’s broken, it’s time to fix the problem

Mark Cameron kicks off the first article of a five-part series on social media ROI by taking a look at a few ways of measuring digital interactions. 

A recent article in the Harvard Business Review entitled ‘Marketing is Dead‘ refers to research that indicates CEOs have lost confidence in and patience with CMOs. That research shows 73% of CEOs think CMOs lack business credibility and the capability to generate sufficient business growth, and 72% are tired of being asked for money without explaining how it will generate increased business.

In this environment, the massive audience participation in and high level of measurability of social media platforms make them a very attractive option for marketers. But any strategy to engage consumers in cyberspace needs to recognise that people behave very differently within social platforms than they do in other places online. People are not looking for products in social networks, they are looking to connect with people. Thus the Google model of serving an offer based on the online action the user is taking is not working that well for Facebook.

So the race is on to develop strategies, methods and metrics that actually work in the social media space.

For example, the media interaction rate (total interactions with asset ÷ total views of asset) measures how many users agree to interact with an asset out of the total people that viewed the asset. This measurement allows us to determine how compelling any online value proposition is to an audience. The cost-per-interaction rate (total campaign spend ÷ total interactions across assets) measures the cost of each interaction with a campaign asset. The cost-per-view ratio (total campaign spend ÷ total asset views) defines the cost required to drive a user to view a digital campaign asset, such as a Facebook page, YouTube video or landing page. But even these calculations are little more than softer brand exposure metrics.

On the journey to better qualifying social media ROI, we must look at the raw numbers these platforms generate, such as Facebook likes and Twitter followers. It is reasonably simple to measure the cost of each social acquisition (total campaign spend ÷ total campaign acquisitions), which can then be used as an engagement score for a social media campaign. It tells you how well the creative concept is working at capturing people’s attention.

We can also look at social media more broadly to determine what people think of your company and if they are helping spread a positive perception of the brand. One example of developing metrics for an advocacy strategy is the number of brand advocates that have been active in the last month. The calculation to determine the active advocate ratio is simply: number of active advocates in 30-day cycle divided by total advocates.

Ultimately, what businesses are interested in is sales. The metrics discussed above are an important part of that journey, but there is still a big gap between these metrics and directly linking that online activity to conversions. Traditional thinking says that if you create greater awareness, then some of that will work its way down the funnel to produce an uplift in sales. But the effectiveness of this approach has progressively declined as the media landscape has become more fragmented. And this trend shows no signs of abating. This is what underlies CEOs’ doubts about CMOs’ credibility.

The big leap in digital marketing will be driven by user data. There is a massive amount of information held about each online user and social media gives us an avenue to access it. The next articles in this series will address how brands go about developing a strategy that allows them to make the most of this opportunity, then turn that into measurable sales.


Now continue to Part Two, ‘Growing your audience’.

Mark Cameron
BY Mark Cameron ON 24 October 2012
Mark Cameron is CEO of customer experience innovation agency Working Three and a world renowned digital strategy commentator with well over 400 published articles.

Specialties: Digital innovation, Digital customer experience strategy, Social media strategy, Digital strategy, Online Marketing strategy.
He blogs at and tweets from @MarkRCameron.
  • SpaceMicrobe

    Do you mean “to better QUANTIFY social media ROI”?