How to Measure Social Media ROI

A recent article on MediaPost titled "Social Media Monitoring and Measurement" provides a useful rundown of the many challenges facing firms engaged in social media marketing. Srishti Gupta calls into question the utility of tracking sentiment and other variables associated with brand perception and attitude. She also goes on to describe how limited existing social media monitoring solutions are as media planning tools.

What she doesn't address in the piece is the question of how social media are transforming the way people discover information online. We find that 20% of the unique visitors to the sites currently running Meteor are coming by way of shared links. Those are links that are cross-posted from one site to another (eg. found on MediaPost and then posted to a Facebook profile), sent through email, sent via mobile device, etc. On sites that skew younger and/or that cater to a much more community oriented vertical like games, this % actually runs much higher. To wit, a Viacom/Microsoft study published in 2007 called The Circuits of Cool, reported that 88% of the links followed by people between the ages of 14 and 24 were sent to them by friends.

What a simple metric like the percentage of unique visitors arriving by way of shared links says about the importance of social media challenges the conventional wisdom shared by many in the online advertising community that social media aren't material to most campaigns. Perhaps the reason CPMs are so low on Social Networking sites is because the massive audiences there is engaging with content sent to them by individuals with which they're connected not from advertisers.

So what should online marketers be doing to measure the impact of social media on their campaigns and brands? First, they should be tracking and measuring the activity and value generated by this activity and not limit their metrics to proxies for sentiment and perception. It's now possible to track the actual traffic and conversions generated by the campaign content that's being passed along from person to person and site to site. That's what the Meteor technology platform does really well. Second, they should be exploring ways in which paid media are stimulating social media performance and vice versa. In the data our platform collects on behalf of our customers, we see a clear relationship between the traffic driven by paid media to microsites, landing pages, etc. and the organic lift via sharing that results. It is possible to uncover and increase campaign ROI with insights into the relationship between paid and social media.

Meteor Can Give Media Planners an Edge

Hollis Thomases did a nice write-up of Meteor this evening on ClickZ. Read her take on how Meteor can help media planners create more effective plans and better optimize campaigns.

Meteor Solutions in the News

Meteor Solutions was in the news today after we announced the merger between Fyreball and Reach Machines:

- TechFlash post on Meteor Solutions and measuring word of mouth
- Venturebeat article about Meteor Solutions.
- Dow Jones on Meteor. (Subscription required)

Exciting times here at Meteor.

Press Release: Meteor Solutions Inc. Captures Data on the Elusive Online Word-of-Mouth

Measure, Buy and Amplify Online Word-of-Mouth with the Same Precision as Paid Media

Seattle, WA (PRWEB) February 3, 2009 -- Meteor Solutions today officially announced its company and Meteor, its technology platform of the same name. The company, based in Seattle, WA, is an Internet software company that captures data for online word-of-mouth activities - filling the huge advertising and marketing gap currently plaguing the online advertising industry. Using the patent-pending Meteor technology platform, Meteor Solutions enables advertisers and publishers to measure, optimize and amplify online word-of-mouth with the same precision as paid advertising. Since it was founded in December 2008, Meteor has been used to track word of mouth for several multi-million dollar marketing campaigns by major brands. Some of the top online, mobile, and game companies are also using Meteor, and its client list is continuing to grow despite the economic downturn.

"In this economy, ad and marketing dollars are under increasing scrutiny and, in many cases, are being cut severely, so it is imperative that these dollars are spent wisely," said Meteor Solutions CEO Ben Straley. "People are more likely to check out links sent from people they know and follow recommendations from friends than they are to respond directly to most advertising. For the first time, Meteor enables advertisers and publishers to track their content as it's passed along from person to person and understand the impact word of mouth is having on ROI."

On average, Web sites currently running Meteor tracking software have found that they receive 20% of their total unique visitors through online content sharing in email, and IM, as well as on social sites like blogs, Facebook and Twitter. This exact measurement of such a substantial and relatively untapped source of website visitors and revenues puts online word-of-mouth in a league with the two leading sources of site visits: search engines and direct navigation.

"Armed with the data, insights and tools that Meteor provides, advertisers and publishers can capitalize on the enormous potential of online word-of-mouth marketing for the first time," said Pete Parsons, Chief of Products for Meteor Solutions.

The Meteor technology platform has 2 parts: Meteor Tracker and Meteor Ignite.

Meteor Tracker:

The Meteor Tracker is built around patent-pending technology that utilizes tracking scripts to monitor the "pass-along" of content from one person to another via links on Web pages, bookmarks, email messages, instant messenger and mobile devices. As tracked content is shared among friends, on blogs, and within communities, Meteor Tracker generates a sharing graph that identifies each "node" (unique visitor) within the graph and captures every site visit generated through each individual source.

Using this basic set of data, Meteor Tracker aggregates the number of visits to the content or campaign, the number of those visits that resulted from content sharing and the number of visits from sharing that resulted in an action (e.g. registration, lead, or sale). For sites that are driving visitors to take a specific action like making a purchase, Meteor tracks every conversion and identifies the ones that were the result of sharing. Meteor customers then have both granular and high-level views of the velocity, volume and value of the activity generated directly as a result of word-of mouth.

Meteor Ignite:

Meteor Ignite provides advertisers and publishers with a platform to create rewarding and engaging user experiences with games and widgets that can accelerate and multiply content sharing. Basic platform services are provided at no additional charge and enable visitors to share content quickly and easily through email and IM, as well as through social sites like Digg, Delicious and Facebook. For an additional fee, Meteor Ignite provides a powerful set of premium promotion and content sharing features to advertisers who want to add even more momentum to the word-of-mouth surrounding their campaigns.

For more information about Meteor Solutions, go to www.meteorsolutions.com.

About Meteor Solutions:

Seattle-based Meteor Solutions was originally founded in 2008 by the merging of two independent companies - Reach Machines and Fyreball. Meteor has been used to track word of mouth for several multi-million dollar marketing campaigns by major brands. Some of the top online, mobile, and game companies are using Meteor as well. The platform is also being used by a number of early-stage companies, and its client list continues to grow. Any company that wants to measure and amplify the organic word of mouth around its content and marketing campaigns will see immediate benefits from Meteor. More information about Meteor Solutions and the Meteor platform can be found at www.meteorsolutions.com.

Word of Mouth Drives Sales

This compelling social media research (click on the link to the report in the first paragraph) by ad agency Razorfish makes a terrific case for the impact that referrals from friends have on the ROI of marketing campaigns.
A couple of interesting stats jumped out at me not only because they're pretty eye opening in their own right but also because they confirm what we're seeing in the data our customers capture using the Meteor Tracker:

1. People that were referred by a friend were 4X more likely to download the free software than those that "discovered" it through advertising.
2. The same cohort of social referrals were also more likely to spend money on the client site and spent much more on average.

These figures strongly support the notion that word of mouth was, is, and will always be the most effective form of advertising. In a world where anyone with access to an online device (pc, phone, game console, other) can be instantly connected with a vast and individualized network of family, friends, and colleagues, word of mouth travels more quickly and more broadly than ever before. There is tremendous potential for marketing campaigns that deeply integrate social media and content sharing early on in the process when strategy, message, and creative are developed.
We're still in the days of early adopters and experimental budgets as it relates to social media and word of mouth but as with all disruptive technologies and transformative change, it's only a matter of time before the first thought of companies that want to create brand awareness or drive sales is how to create an experience that's worth of pass-along as opposed to where to "buy" a particular audience by demographics/psychographics.
At a time when the ROI of every dollar spent on marketing needs to be measured, facts like people that are referred from friends are 4x more likely to convert than folks who come in through an ad are reason enough to make the measurement and encouragement of sharing a top priority. More and more companies are beginning to catch on.