Continuing on the topic of monetizing social networks, one of the problems in the industry is last touch attribution.
If you think about the purchase funnel, it starts from brand awareness to favorability to intent to action. Display advertising, the main form of advertising on social networks, is very powerful in creating brand awareness and moving the consumer to a favorable stage.
Click or Search advertising plays a big role in converting those leads into intent and action.
If we only follow the last touch attribution model, then all the work done by social networks to create brand awareness and purchase intent is lost. An interesting read on this topic is the keynote address delivered by Gian Fulgoni, chairman and co-founder of comScore, at the MediaPost OMMA Metrics & Measurement conference.
A potential answer for CMOs to measure their display advertising ROI on social networks and see what is being fed into the sales channel is marketing mix modeling (MMM). MMM uses multivariate regression techniques to analyze the sales and marketing time series data: it looks at how the different ad sources (display, search, video etc) contribute towards making a sale.
I don’t think clicks are going away as a metric for ROI online. However, we will be shooting ourselves in the foot if we don’t look at cross channel synergies and impacts.
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very well said. the other important factor to consider is time lag to impact. social media isnt like paid search campaigns – where you see ROI in the form of sales or revenue almost instantly. this is a medium that needs to be cultivated over time. the returns can be exponential – however, they dont happen overnight.