Social is more than word-of-mouth marketing, grassroots level advocacy and organic sharing. It’s a multi-billion dollar industry.

In terms of man hours, agency hours, production costs, giveaways and massive social ad budgets, social spending is eating up budgets — projected to own an average of nearly 20% of total marketing budgets in the next five years alone.


Brands are becoming savvy and need to justify their social spend. How many more customers will this get us? How much more revenue will this bring in and how much is every additional like worth?  These questions ultimately beg the multi-billion dollar question…What exactly is social spend buying your brand?

Branding Influence, Not Acquisition

Same as display ads, billboards or TV spots, social channels work to influence purchase behavior, not just drive conversions. Brands that seek to understand the value of social need to know clearly that comparing revenue generated from social to revenue generated from Search Engine Marketing, or another acquisition source is comparing apples to oranges.

The reason it’s an apples to oranges comparison is because social is not an acquisition channel: it’s a branding channel. Social is primarily a first-click channel (meaning it’s utilized much earlier in the decision-making funnel than an acquisition channel is) — and 99% of the time the click does not even occur! People don’t primarily consume content on Facebook, Twitter or social channels by clicking. They are passive consumers of content.

For example, Facebook content consumption typically happens on a user’s newsfeed — so much so that a Facebook user is 40-150x more like to consume branded content in their newsfeed than directly on a brand’s wall. Furthermore, for every fan a brand has, 34 friends of that fan see that friends’ interactions with the brand.

This passive consumption pattern begs for an additional metric to establish a social ROI analysis: influence of friends. This metric is closely aligned with word-of-mouth marketing measurement, and further complicates the answer to the billion dollar question of how to measure Social ROI.

To do so effectively, it is the CMO’s job then to weight brand influence from social channels as heavily as brand influence is weighed for offline brand channels.

An InPrecise Measurement

How does one measure friend influence, passive consumption and active engagement? Traditional marketers have been measuring it for years with the simple “Reach X Frequency” equation.

Traditional channels such as billboards, television and radio drive results because they are part of a larger branding mix. If one were to solely measure traditional channels by their conversion path, they would have been written off from marketing budgets as they would be considered unprofitable. They are not an acquisition channel. They are a branding channel. To measure their success by conversion paths alone would devalue their success. And such, traditional management has been deemed sufficient of those channels.

Digital has expanded the boundaries of traditional measurement because data is distinctly available at every touchpoint. Digital strategists have advocated measuring every touch point back to the source heavily. In turn, we’ve come to realize that measuring the source of brand exposure on social is as hard as measuring the source of brand exposure of a TV ad someone sees as they board a flight. This is an uncomfortable void in digital measurement — in a world of deep data, how can we accurately measure social influence?

A Call For Improvement

To start, we must accept that measuring conversions from social to the source is not 100% precise, and in that vein, social influence is a branding mechanism much like traditional media. Secondly, we as CMOs must advocate that social channel’s influence on purchase is as important as any traditional medium. Once we are comfortable with those two points, we need a better method to measure that influence.

For example, if Facebook wants to prove to advertisers the value it provides (particularly important as CMOs and brands become savvier in terms of measuring social ROI) they will need to improve their available data in order to increase ad revenue.

Imagine the benefits for your brand if you could identify if a purchase came from someone who has:

    • Liked the brand on Facebook
    • Is a friend of a person who likes the brand’s Facebook page
    • Has not liked nor is connected to a user who likes the brand’s Facebook page
    • Pass-through and conversion data for those purchases 

If a CMO could access that level of data, she could certainly create a strong and accurate picture of social’s true ROI both on acquisition and branding. I strongly believe that the multi-billion dollar investment in social by companies warrants social channels to improve upon their measurement in terms of proving ROI.

The Time for Change

Facebook advertisers need to be provided a simple conversion tracking pixel. The technology is there. Google AdWords already provides this level of data — why can’t Facebook provide this data on overall brand exposure on Facebook ads? I can only imagine if this was made available, brands could easily see pure conversions and influence, including pass-through revenue and click-through revenue. That sort of data approach could be visualized as:

This proposed approach would allow brands to understand what their incremental revenue of Facebook ad campaigns are. They could clearly see how their campaign, which reached X amount of Fans and Friends of Fans, performed by proximity to their brand exposure. Brands will be able to calculate true propensity to purchase of Incremental Likes vs. Existing Likes. Most importantly, they will see directly-sourced Facebook influence on sales.

The time for change is now.

CMOs need to value social channels as a valuable branding medium, digital marketers must accept that social is a traditional channel in terms of branding, and most importantly, it is time social channels met the needs and budgets of brands to help answer the multi-billion dollar question with accurate tracking and data to the source.

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