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April 1, 2013By Eric BrownIt was great meeting Duncan Alney from Firebelly Marketing last week for an impromptu breakfast. Although there are a lot of labels, I think at the end of the day anyone in Social Media are Advertisers, selling Advertising. He also established Urbane Media, a social media marketing and PR laboratory, where innovative marketing ideas are tested. In the second part of the talk a large client joined FBe on stage to make the case for Facebook campaigns.
Completely ignore the question of whether Facebook works (assume we are taking about Ren Ren or Google+). Then, they could look at sales in all the countries including country X and a couple of other countries (Y, Z, A) that are similar to country X in terms of type of population, existing brand awareness, market penetration, competitive structures. From that analysis, they could identify the incremental sales in country X compared to Y, Z and A. Compute ROI: (cost of Facebook campaigns + salary of people running campaigns + agency creative costs) vs.
Based on results of value identified for Facebook, optimize their advertising mix strategy for future product launches. It is always so cool to run marketing campaigns in large homogenous markets (like Europe, Asia, or large chunks of the US).
It goes without saying, this is exactly how I would prove causality if I was running social media campaigns on Twitter, Ren Ren or vKontakte. I wanted to come up with a way to visualize the unique challenge Facebook faces when it comes to proving ROI.
To understand advertising effectiveness you'll spend some time measuring CPMs, CPCs and, every other Wednesday, CPAs. But you spend almost all your time measuring bounce rates and page views and time on site and all that other ok stuff.
As you go from maturity to true wisdom, you add multi-channel analytics and prove the value of digital on your offline existence (catalogs, store purchases, call centers, etc.). At the most macro level we don't participate on Facebook to get people to come to our digital existence.
This is a very different from what you were doing with Bing and AOL and all the other digital advertising platforms. You are spending money on Facebook for an opportunity to build an audience on Facebook for an opportunity to engage them awesomely (by not pimping yourself constantly!) for an opportunity for this audience to 1. But it is absolutely critical that you understand that when you engage in any discussion about the value of being on Facebook, and spending money on Sponsored Stories or Promoted Posts, the picture (what are you actually trying to do) has completely changed. Because we are trying to build an audience on Facebook, it is unsurprising that we will spend almost all of our focus and attention on what is happening on Facebook. We have our business URL on our brand page (you do, don't you?), and some people will click on that URL and come to our website (desktop or mobile).
All of the above will ensure that some of the, sorry, abject silliness and insane journalistic stories written about Facebook's lack of ROI will die. There are some ad formats on Facebook where you are simply advertising on Facebook just as you might using DoubleClick or Yahoo! The challenge to overcome, as it often is with display advertising, is that people are on Facebook to Friend and share pictures and engage with Sarah Palin (and your business). You can measure CTR, CPC, Bounce Rates (yes even in the real world :), Time on Site, Conversion Rate, Average Order Value. In some cases this is easy, because the CxO does not quite understand the ecosystem and is happy to allocate some budget to Facebook because everyone's doing it. This helps you sell the value of Facebook to your business as a new owned platform you've created. The number of PR people you can now fire because your Facebook page is such an awesome PR platform – not.
This helps you sell the value of Facebook to those execs who are a little suspicious of this whole social thing, and that it can actually save some money. I would go out on a limb and say that there is no CxO in the world who would not understand the value of Facebook if you can show any of the above.
When you set out to prove value of Facebook, your job is to understand that the reasons for investing in Facebook are very different from the reasons for investing in Bing or Baidu or AOL, and your job is to prove the two things listed above (value of activity on Facebook, value of activity on Facebook on your business).
Let's take off our clothes and jump into the cold unforgiving data waters and talk metrics.
For each Facebook effort, we are going to look at #1 or #2 or both depending on what we are trying to accomplish. Declaring success based on measuring Likes in aggregate is like declaring success after getting a lot of Visits to your site. The reason most executives don't perceive the value of Facebook is because of how Facebook has defined success. I believe metrics should measure only one thing to ensure everyone knows exactly what is being measured (hence no compound metrics).
These three clean metrics answer these questions clearly: When we post on Facebook does anyone actually engage with us via typing on their keyboards and adding to the discussion?
I dare you to analyze which one of those things is happening more or less, or working better or worse, when you see 699 in your report.
For your Facebook brand page at an aggregate level, measure Conversation, Amplification and Applause.
These two lovely metrics from Facebook empower you with diagnostic capabilities to understand why your Conversation, Amplification and Applause Rates might not be where you want them to be, and to figure out which Facebook brand page contributions are better or worse. If you step away from Facebook Insights then you can do better, at a Post level, and measure the metrics that really matter. This helps us achieve a clear line of site between measuring Page and Post level value delivered by us, and what kind of engagement we are getting in exchange.
First go into your Facebook Ads Reports, then Facebook Campaigns, click on Reports, choose Advertising Performance as the Type, and select your promoted posts. You can also see activity: Page Post Likes, Comments on Page Posts, Link Clicks and Video Plays (both if relevant).
It shows you how many impressions of your Promoted Posts were shown in people's news feeds.
You are able to show how much money you spent, the cost of reaching an additional audience, the results in terms of engagement (incremental likes and comments). What would be ideal is to maybe pull all the new Likes collected via Promoted Posts to be identifiable in a unique way (just like conversions we got from Bing or Email marketing). If they don't have higher rates, or even the same rates, then we are acquiring a sub optimal audience and we should stop spending money on Facebook. Simple controlled experiments could possibly help us get a slightly enhanced understanding of the impact.
If other variables can be controlled, you can run sponsored stories a bunch of times (weeks, a month) and measure your overall Conversation, Amplification, Applause rates and your individual post Engagement and Virality. This assumes you can keep the posting quality the same, and you don't have any extraneous circumstances were you are suddenly showered by a massive number of Likes due to an external campaign. To measure real success you HAVE TO make sure that all your ads are tagged with campaign parameters. You can't really do CPA with Facebook, else I would have it there (for CxOs FB should consider doing conversion tracking). Bonus: You can compare the performance across your Google+ and Twitter campaigns, and smile because you, dear reader, are doing very well on Facebook in terms of outcomes (now just find more relevant people to show ads to in that 950 million pile on FB!).
Unlike AdWords you can't merge your Facebook advertising data with your onsite analytics data in Google Analytics.

You can replace the last one with Revenue or Average Order Value if you are hard core ecommerce. This part is super complicated for Facebook because of everything you learned in the second part of this post. In case of Facebook, as outlined at the start in the story of Brand S, controlled experiments are our BFF. Question from CEO: Can I drive people to buy more Pepsi at Wal-Mart by running a bunch of Promoted Posts, Sponsored Stories AND Facebook Display Ads. In addition to the above scenario, you can use Primary Market Research to isolate the impact of your active Facebook participation in creating incremental lift in your likelihood to recommend our brand or Net Promoter Score, or in your brand perception, or a strong signal in brand recall studies, or… other qualitative metrics.
You would need a large enough study and a large enough number of people who Like you on Facebook and a smart researcher.
If we don't, we will have a hard time showing long-term sustained value from Facebook (or Twitter or the Google+ website). At the end of the day, it is important to remember that the Facebook engagement you create, the amount of traffic you can get from Facebook (to your online or offline presence) will rarely match the engagement, reach and outcomes that people who love your products will create for you. So yes, focus on having a great Facebook presence and buy ads on Facebook, but remember to make your products and services so amazing that people can't help talk about them on Facebook.
Dippin' Dots crossed five million Facebook Fans a couple of days before they filed for bankruptcy in Nov 2011. In the end, business success (amazing products and services) can be hugely amplified by social media.
I hope you see this post as a pragmatic way to look at optimal Facebook participation, and a real world practical guide to measuring the value of Facebook to your company. I'm a early adopter of social marketing for my clients, and yet I found this post illuminating.
The most valuable part of the post are the colorful pictures explaining the differences in the types of marketing. Great read, I was waiting for you to tackle the FB ROI issue, and you delivered in fine style. Companies spend lots of money generating goodwill towards the brand using non-Facebook efforts.
When a customer talks about your brand on Facebook (say shares a link from your brand), he or she isn't just spreading goodwill about your brand. To measure the economic value of your social channels, you can use a combination of social networks analytics and Google Analytics, but it's not easy. The challenge is that sentiment analysis (despite much process, and amazing breakthrough claims by vendors) remains a challenge. At our agency we are not obsessed with Likes, we try to identify the engagement we create for our clients. My updated client report for promoted ads and sponsored stories will focus on the metrics you recommend in this post. This is one of the most comprehensive, helpful, and illuminating discussions I have ever heard regarding Facebook ROI measurement. I think one of the major challenges is that the value of a brand page stems from engaging an audience. I don't know if it will ever become a reality, but a view through metric or like-through type metric (made up, hopefully you can infer the intended meaning) would be my dream scenario.
Despite the rise in native advertising, content marketing still seems to rule the digital world. It’s important to note that the goals for content marketing and native advertising are very different.
According to Kelsey Libert, partner and vp of marketing at Fractl, it’s not just how performance is measured that makes content marketing more effective. Libert pointed to several key weaknesses when it comes to native ads on social, chief among them being limited reach based on paid partnerships. Content marketing impacts more KPIs than native advertising and it has a higher ROI overall, and with the new FTC guidelines it will only become more challenging for publishers to create share-worthy content on behalf of big brands. Are you an aspiring entrepreneur who would like to promote your small business and significantly increase your exposure and get leads and customers through social media channels? During our fast track course, we will cover such crucial areas as effective blogging, the fundamentals of SEO, social networking, microblogging, video marketing and much more. I have recently presented a  successful webinar on Social Media Marketing for small businesses & entrepreneurs for Warwick Business School. Newsletter Signup FormSubscribe to our newsletter and get the latest in updates, new blog posts and training sessions! Enter your email address to subscribe to this blog and receive notifications of new posts by email.
How much they sell depends on how effective our Digita Marketing is for their Advertising Campaign, and in addition to how solid our Friends, Fans and Following are. He founded metro Detroit’s Urbane Apartments in 2003, after serving as senior vice president for a major Midwest apartment developer. As Facebook is a very young channel, it is not surprising that everyone's struggling with the answer.
Focus on the fact that this was the launch of a powerful new new product via a continent-wide rebranding campaign using massive online and offline media buys. Even if there were millions of Likes on the post with the deeply emotional video about the new product. To rigorously prove value we could all work together to create purer controlled experiments. It is possible to get good test and control groups (type of population, existing brand awareness, market penetration, competitive structures) for our experiments. You're welcome to read a section or two, as time permits, and then come back and read the next section and so on and so forth. As you mature you start measuring things that really matter, macro and micro conversion rates, economic value, visitor loyalty.
And then beyond, to measuring your Net Promoter Score (or the latest flavor of the month customer centric metric), etc.
We participate on Facebook to engage with people via our brand pages, and those people just stay with us on Facebook. I can post something on my brand page and then leverage Facebook's massive audience to get them to see my awesome post and get more of them to engage with the post (and my brand).
Hopefully some of the people who already like my brand page will come to read the post and engage with me (helping me bust through the limits placed on my reach by Facebook EdgeRank), and (fingers crossed) perhaps some of their friends will see my post and Like the post or Like my brand page and maybe visit it again in the future. Understanding and painting this different picture is even more critical when you talk about Facebook ROI with your executives. We will measure Likes and Friends of Friends and Total Reach (more on all these potentially sub-optimal metrics later). The ads are tangential, at best, to these purposes and hence the click-through rates are pretty low. The activity you generate on Facebook delivers business value, online or offline, and helps produce profits. Even if they don't understand the short or long term potential of the social web revolution.
You want to know what is happening after you created the brand page, and some people liked it. When we post on Facebook does anyone amplify our contribution so that it is seen by people who don't know about us? You'll notice the numbers above do not add up to 440, that is simply because some people might have seen the post via multiple methods (so I got it first just organically, EdgeRank did not limit it, and then I saw it again when you paid for it).

Experiment with Facebook targeting options and over time reduce $ per IR while delivering incremental Likes and Comments at the same or higher level.
Did these people, we acquired at a cost, have a higher Conversation Rate or Amplification Rate or Applause Rate?
When people like you or talk about your brand, you can take that, package it into an endorsement and show it to other people.
The summary at the end is directly going into my future presentations – with credit to you. I feel so familiar with the layout of the site that I focus on my desired content and have banner blindness for the side ads.
I wholeheartedly agree with you regarding the obscurity of some of FB's native insight metrics. While waiting for the options above to gather enough signal and clearly show value of FB in creating a brand halo, we show some short term economic value from FB.
This is an exercise less in trying to guess sentiment and more of categorizing the words to certain category. This is for the Facebook brand, but you can see how something like this could be done for people conversing with you, amplifying you etc etc. But my lesson from your meaty post is that we are barely scratching the surface of that is possible. Fractl and Moz used survey responses from more than 30 content marketing agencies and cost data from more than 600 digital publishers. While both want to increase brand awareness, content marketing is also intended to drive conversions.
Content marketing puts the brand and the consumer on equal footing, and in the process necessitates the brand elevate the content they are creating. While content has the potential for wider and more organic reach, native wins when it comes to predictability and scale.
These interactive one-to-one or team sessions can be run on request at the place and time convenient for you face-to-face or via Skype. We are Full Circle back to the value of Your Circle of Influence , a post from 2010 when we made the decision to extend our social reach to 10,000 Facebook Fans. He established a proven track record of effectively repositioning existing rental properties in a way that added value for investors while enhancing the resident experience.
We've seen explosive growth in brand pages, types of advertising and other fun ways to monetize this audience.
Then we can treat every campaign as an opportunity to identify causality between the money spent on advertising and the product sales achieved.
Why don't more CMOs spend millions of dollars of budget on Facebook, like they might do on AOL and Bing and Yandex? I did not want to take short cuts, I did not want to rush through critical concepts, hence the post is long. All the things that directly tie to the bottom-line of your company, which you can tie to Net Income driven by digital. Maybe some of them remember our brand name and our products (Lord knows we are pimping ourselves aggressively on those brand pages) when it is time for them to make a purchase.
For our Facebook ads we will measure CPC and Social CTR and Gender and all that good stuff.
If you are looking for inspiration … my absolute favorite small business example is Seventh Generation.
My ad, unsurprisingly, extols the glory of my blog and promises riches and fame, as all ads should.
We have to prove the value of Google and AOL and Yandex and everything else on our big business offline existence.
For most of it we are going to have to work hard and prove that an owned audience is monetizable and delivers business value. Have you figured out a clever way to measure impact of Facebook on your digital existence or your real world existence? Having several variables lumped into one label makes attributing any results miserable, especially when compared to working in a different platform like GA which allows for a much more tailored approach to segmentation. In the post (in the measuring impact offline) section I reference using Primary Research, Surveys, and Brand Influence Factors studies.
For that last part see section 4 on how to show economic value in this post: Best Social Media Metrics. This bears out in the key performance metrics as well: The number one metric for content marketing is the number of leads generated, where native ads usually depend on engagement metrics and impressions. After our meeting it occurred to me that what we really are are Advertisers, except it Doesn’t Look Like Advertising. Fast forward to today, and we significantly exceeded those numbers and have a strong and solid Social Outreach with the Urbane Life Brand, one that retailers and merchants are finding advertising value in.
The new product became the number one selling product in the company's history in that country. But if you read it, I promise, you'll see Facebook marketing, advertising and analytics in a completely new light. And people who've tried to make it the primary point have failed miserably on Facebook. I can't think of even one other business that understands its Facebook audience as well as they do. Because once I press Like I might never come back, never read anything you write, never ever engage with you, not even remember you exist. Our ability to reach the right person at the right moment with the right message is turbocharged by a combination of social and mobile. These are often good, over a long period of time, quantifying the impact of marketing channels. Through this, content can enjoy true virality in a way that is nearly impossible with Native ads. If you execute only for this secondary outcome on Facebook, you will likely achieve less than optimal success.
I can't think of anyone else that delivers the perfect balance of pimping (very little) and life value to the audience.
Then after two weeks I'll get my sales data for the Wal-Marts in my 25 cities and compare the sales for Pepsi Min, and see if there is a statistically significant lift in sales when compared to other cities I did not bombard with Facebook ads. So for all other stuff, because the aqua is big and not the orange, we are going to have to solve this problem. Oh and do you think I should abandon my pollyannaish world view and just give in to metrics like Reach and Online GRPs to get more budgets shifted to digital? How much value is there for U-Haul to “Sponsor” and have brand coverage and local deals on our Urbane Life Move in Letters? Most big companies stink on Facebook because they don't understand what Seventh Generation does.
This does not mean they're visiting your page, or just reading the content was valueless. Or maybe big companies are incapable of being selfless (focus on the fan and not themselves) or authentic.

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