Loading ...Is An ROI Model for Social Media Finally Emerging?
It is one of the most common questions asked in advertising. How do you quantify ROI for a campaign in the social media space? Research commissioned by MySpace is coming close to answering the question.
For advertisers of consumer packaged goods, the tool of choice has been econometric analysis based upon changes in retail scanner data. The down side to this method is that is cannot detect the impact of a small advertising outlay in digital media. But according to AdAge:
To overcome that, MySpace teamed with ComScore, which uses a panel of more than 1 million people in the U.S. to track internet usage, and Dunnhumby, which runs loyalty programs for supermarket retailers and has access to loyalty-card purchase data from 59 million people in the U.S. The two panels include 60,000 people who are part of both databases, creating a single-source database that allows a definitive look at how internet ads affect offline purchases.
The model detected that a $1-million campaign on MySpace generated $1.28-million in offline sales compared to shoppers who were not exposed to the campaign. Assuming that the numbers are correct, the combination of the ComScore and Dunnhumbly databases is promising for smaller efforts, according to research firm Analytic Partners.
The model was part of a presentation at the Advertising Research Foundation’s Re:Think 2009 Conference held last month. The paper was not available online yet.
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That assumes that the regular MySpace users and nonusers were equally likely to be attracted to the product(s) being advertised/tracked and that the exposure to the advertising on MySpace was the only difference in the two populations. This is a major fallacy in the assumption that underlies the result reported and a classic error – often intentional – in research reporting to justify an assumption.