Adobe Says Impact of Social Media Undervalued by Nearly 100%
Adobe Says Impact of Social Media Undervalued by Nearly 100%
SALT LAKE CITYHow do you measure the value of social media in driving Website traffic, engagement and revenue?
Well, Adobe has some ideas on that. For its part, Adobe Systems announced findings from its second Adobe Digital Index report that helps give marketing, e-commerce and retail executives critical digital marketing insights into the value of social media. Indeed, the study indicated that the impact of social media may be undervalued by nearly 100 percent based on the model of measurement being used.
Adobe released the results of the study at its Adobe Digital Marketing Summit 2012 here.
Adobes study evaluated how marketers measure the impact of Website traffic from major social media sites, including Facebook, Twitter, Pinterest, Tumblr, Blogger, YouTube and Yelp. Adobe analyzed more than 1.7 billion visits to more than 225 U.S. companies Websites in the retail, travel and media industries, concluding that marketers significantly underestimate the value of social traffic.
Key findings of the report include:
¢ The use of last-click attribution, the most common attribution model used by marketers, may cause marketers to undervalue social medias Website impact by up to 94 percent.
¢ First-click attribution models more accurately capture the benefits of social media in engaging customers earlier in the buying process.
¢ Significant differences in the results of first-click versus last-click attribution data for various social media sites may cause marketers to change how they allocate the budgets across social and other digital channels.
Adobe officials said despite how pervasive social media has become, it isnt being recognized for driving Website traffic, engagement and revenue like it should be. However, the solution to giving social media its just due and measuring its true value may lie in making some simple adjustments to how its contributions are captured and measured.
Because social marketing is still so new, best practices for measuring the effectiveness of social efforts are still evolving, said Aseem Chandra, vice president, product marketing, Digital Marketing Business for Adobe. Whats more, many senior marketers remain skeptical of social medias concrete value and its measurability, despite committing an increasing percentage of their budget toward social channels, Adobe said.
Moreover, the explosion in social engagement drives marketers growing enthusiasm for social: 73 percent of respondents to a 2011 Chief Marketer survey said they used social media in marketing campaigns, and 15 percent intended to do so in 2012. At the same time, however, marketers express significant reservations about their ability to measure ROI from social media. In the same survey, 88 percent indicated dissatisfaction with social measurement effectiveness, and 52 percent cited difficulties in accurately measuring ROI as their biggest source of frustration in social marketing.
The Issue of Attribution
At issue is attribution. In its report Adobe said the term attribution refers to the models marketers use to determine the role that each marketing channelsuch as paid search, social media and emailplays in business outcomes: visitors, revenue, page views and so on. Adobe offers the example of a consumer using Bing to search for shoes, who clicks on a retailers paid search ad with a discount offer and then makes a purchase. The marketer assumes that the paid search ad drove the sale and attributes credit for the purchase to the Bing ad.
Everybodys interested in social, but they dont know exactly how to spend their money, Chandra told eWEEK. They need an attribution model. Theres not a lot of clarity on how to measure ROI.
The assumption that the marketing channel most responsible for a consumers behavior is the channel that the consumer last touched before a visit or purchase is called last-click attribution. Last-click attribution became widely used in the early days of e-commerce. It works particularly well for search, email and other direct-response media channels because it measures the behavior of customers who are further along the engagement or purchase process. And it is still the attribution model most extensively used by marketers to measure all types of digital media.
While last-click attribution assumes that the marketing channel most responsible for a consumers behavior is the channel the consumer last touched before a visit or purchase, first-click attribution places responsibility on the channel the consumer first touched. Social media creates an environment in which brands can build awareness and engage with prospective and existing customers early in the purchase process, Adobe said.
By ignoring the value of the earlier interactions, last-click attribution gives disproportionate credit to the marketing channels customers use late in the purchase process, potentially undervaluing the role of other channels in building awareness, engagement, and ongoing relationships between customers and brands. In contrast, first-click attribution gives social media more credit for these earlier interactions. The difference between last-click and first-click is significant and has the potential to change the way companies allocate social media budgets.
Indeed, the impact of social media on Websites is generally higher when measured with first-click attribution models than with last-click models, and Adobes analysis shows that the gap can be significant. For example, using first-click attribution for the retail Websites Adobe analyzed, the average visitor from social media sites delivered $1.13 in revenue. In contrast, when using last-click attribution, the average visitor from social media generated $0.60. The same analysis for travel and media companies showed first-click attribution resulting in values that were 94 percent and 28 percent higher, respectively, than the values calculated using last-click attribution, Adobe said.
As an industry, digital marketers have been quick to add social media to the marketing mix, but have perhaps not considered new and better ways to measure this complex channel, Chandra said. This study shows that marketers tend to default to traditional direct measurement models. Better measurement of social marketing will lead to better ROI.
Chandra added that the difference between last-click attribution and its connection with search and first-click and its connection with social is like looking at a first date versus getting married. Search looks at the process of getting married, whereas social is more like looking at that first date and everything that came afterward that led up to a marriage.