Deciphering the True ROI of Earned Media

Author: Pelin Thorogood

Guest blog post by Pelin Thorogood, CEO, Anametrix

Social media generates high volumes of conversations and data, but its return on investment remains frustratingly difficult for marketers to quantify. Confronted with this tidal wave of Facebook “likes,” tweets and social mentions, marketers may wonder if there is any way that data can help them engage customers and drive sales. How does a video or infographic that goes viral, for example, impact the cost of acquiring customers? How does negative or positive customer sentiment affect campaign responses and purchase patterns? The more fundamental question is this — how can marketers relate “big” social data to a holistic understanding of consumer engagement patterns to drive marketing effectiveness and relevance?

To answer these questions, we need to start in the right place – the convergence of paid, owned and earned media. Historically, marketing channels have been viewed and measured in separate silos. Television, radio and print advertising – once the tried-and-true pillars of media strategy – functioned as semi-autonomous channels, often governed by separate marketing plans, teams and budgets. That was a simpler world, indeed, when understanding the data typically meant counting the audience to determine the reach. Today such silos not only fail to reflect how consumers interact with brands across multiple channels, they have become a formidable roadblock to marketing success. The multichannel data requires more than simple arithmetic to yield its insights, as the new channels are tightly bound – and the performance of each is heavily dependent on the performance of the entire system.

It’s no news that consumers today shop across traditional in-store, online, social and mobile channels as they research products and services, engage in conversations, read reviews, make purchases and, ideally, become brand advocates. We are those consumers. But for the marketer, it’s essential to understand how these channels intersect and overlap each other in highly complex ways. That phenomenon has come to be called the “convergence” of paid, owned and earned media.

Owned media refers to a company’s traditional marketing collateral, but also corporate websites, Facebook pages, Pinterest sites, Twitter accounts and the like. Paid media, of course, ranges from traditional TV and radio “buys” to online banner ads and search words. Earned media is where the world gets complex. Companies can leverage their owned and paid media to gain exponential increases in effectiveness through “earned” media. Think about how social buzz from a viral video can dramatically improve ROI from online banner ads. A brand’s Twitter remark can adversely affect an entire population of consumers – or the reverse. Consider the Oreo tweet during the 2013 Super Bowl power outage. With the message, “You can still dunk in the dark,” the quick-witted tweet was retweeted thousands of times, triggering a chain reaction and immense amounts of no-cost “earned media” attention.

As paid, owned and earned media converge, vast amounts of data are generated. But only a multichannel, marketing analytics platform will help the marketer make sense of it, identifying direct and indirect factors that lead buyers to consider products, buy, and potentially become brand advocates and loyal customers. The marketing team needs real-time information that correlates the performance across these channels as a holistic system. Otherwise it’s impossible to assess actual performance and specific campaign contributions accurately.

One top-25 national news organization — The San Diego Union-Tribune (U-T) — offers a good example of how marketing analytics can be used to drive business results. The news organization wanted to improve reader engagement and uncover best practices for monetizing content at a time when it was instituting a paid content model, called a paywall. Its writers used social media to engage with readers in ongoing conversations. But the challenge was to transfer those numbers into site visitors for published content behind the paywall for the media model to succeed at driving advertising revenue. The U-T content producers now use marketing analytics reports to better understand how to choose topics and tweak headlines in real time to drive more traffic, as well as to judge which stories should get the most production time. In one case the data insights enabled a reporter to increase his readership by more than 400 percent. By year-end 2012, content authors’ article visits increased more than 20 percent over the previous year. And the San Diego U-T has driven this substantial year-over-year increase during the transition to the paywall when many news organizations see revenue declines of as much as 40 percent.

The bottom line is that marketers can leverage data from paid, owned and earned media, but only when it is seen as a highly interdependent system reflecting buyer behaviors. It takes marketing analytics to connect data from all of these sources, correlate and analyze behaviors, and visualize in ways that the marketing team can use. Seen holistically, the data that consumers leave behind becomes a linchpin in marketing efforts to deliver relevant and personalized offers to buyers and to improve customer lifetime value, a fundamental metric of marketing effectiveness. The data tells the story – we need only to understand what is being said.

About Pelin

Pelin Thorogood, a new media marketing and analytics expert, is CEO and a board director of Anametrix, the first cloud-based, real-time marketing analytics platform. Her career as a high-tech innovator includes leading the go-to-market strategy as CMO of WebSideStory (acquired by Omniture/Adobe), extending Peregrine Systems’ enterprise software business (acquired by HP) into web-based applications, in the mid 1990s launching one of the very first mobile B2B applications. She was named one of the “20 Women to Watch” in sales lead management in 2011 and 2012. Pelin holds a B.S. in Operations Research, Masters in Engineering and MBA degrees, all from Cornell University where she also serves as Executive-in-Residence for the Johnson Graduate School of Management.

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