ROI
Stop paying Kim Kardashian $10,000 per tweet – She’s NOT Influential if no one re-tweets
Source: AdAge.com
| Yahoo Scientist Questions ROI of Kardashian’s Sponsored TweetsDuncan Watts Explains His Model for Predicting Value of Influencers on Twitter |
Ad Age Digital Conference
NEW YORK (AdAge.com) — Stop paying Kim Kardashian $10,000 per tweet. That’s the recommendation based on the work of Yahoo’s principal research scientist Duncan Watts, who presented his findings at Advertising Age’s DigitalConference.
“If you recruit enough people who, on average, influence just one other person, you could get a much better return on investment if you aggregated them and altogether paid them a tenth of what Kardashian gets.”
But in looking at influencers, Mr. Watts found that it’s incredibly hard to predict who will be a major factor on Twitter, a conclusion that runs counter to the prevailing wisdom of social epidemics popularized by the book “The Tipping Point.” While he acknowledges there are certain personalities such as Kim Kardashian who can potentially trigger a larger cascade of re-tweets given her large amount of “followers” (“Tipping Point” enthusiasts call her a connector), close studies of social platforms reveal that influence is spread more efficiently and more reliably when done through many-to-many connections, rather than through a few highly connected individuals.
“Most of them will send tweets, and no one else re-tweets,” Mr. Watts said. “A lot of times, not that many people are listening on Twitter.”
More supporting details here: http://www.marketingcharts.com/direct/celeb-twitter-followers-have-low-authority-13297
Celeb Twitter Followers Have Low Authority
While celebrities have high numbers of Twitter followers, those followers usually have minimal reach and influence, according to social media consulting firm Sysomos.
Celebrity Followers Offer More Quantity than Quality
Celebrities seem to have large amounts of followers with low Twitter authority levels (see “About the Data” for more information on how authority levels are determined). Of five celebrities examined, the average follower of President Barack Obama had the highest authority rating on a scale of 0 to 10, 2.4. The most common authority score among Obama’s roughly 4.2 million followers is 1, held by 20%.
Interestingly, the celebrity whose fans had the second-highest authority score of 2.1, pop singer Lady Gaga, had the second-lowest following of about 4.5 million. The most common authority score of followers of all celebrities except Obama was 0.
Actor Ashton Kutcher had the highest number of followers (about 5.1 million), and the third-highest average authority score (1.8). Pop singer Britney Spears had the lowest average follower authority score (1.3) and second-highest number of followers (about 4.8 million).
Celebrities seem to have large amounts of followers with low Twitter authority levels. This could be because they attract everyone from all walks of life. Some people may only be on Twitter to see what their favorite stars have to tweet about. In addition, most celebrity followers tracked by Sysomos had few followers themselves, pushing down their authority scores.
Social Media Heavyweight Followers Have Most Authority
Social media heavyweights, private citizens who have made a name for themselves on Twitter, had the fewest followers but the highest average authority scores for their followers. Following the pattern seen with celebrity tweeters, the social media heavyweight with the fewest followers, Jason Falls (27,195), had the highest average follower authority score (4.8).
Conversely, the two social media heavyweights with the most followers, Chris Brogan (139,693) and Jeremiah Owyang (64,775), tied for the lowest average follower authority score of 4. The most common authority score for all social media heavyweight followers was either 4 or 5.
Online Media Beats Traditional Media
On the whole, the five news/media sources tracked by Sysomos show more variety among their scores than the celebrities or social media heavyweights. However, online media sources attracted fewer followers with higher average authority scores than traditional media sources.
Online media source Read Write Web, with about 1 million followers, had an average follower authority score of 3, which was also its most common follower authority score (19%). This tied online media source Mashable in average authority score, most common authority score and percentage of followers with the most common authority score. Mashable has more followers with about 2 million.
Online media source Tech Crunch ties traditional media source Time.com with an average follower authority of 2.4 and most common follower authority score of 2, at virtually the same percentage. However, Time.com has significantly more total followers (2.1 million) than Tech Crunch (1.4 million).
Traditional media source New York Times has the highest total number of followers (about 2.5 million) and lowest average authority score (2.2). It also has by far the lowest most common authority score of 0 (22%). Not surprisingly, sources that specialize in social media attract users that are more active on Twitter.
Facebook Fans More Valuable Customers
While there is variation in the value of different types of Twitter followers, on the whole Facebook fans of a brand provide more value as customers than non-fans, according to a new study from digital consulting firm Syncapse Corp.
The average value a Facebook fan provides a brand is $136.38, but it can swing to $270.77 in the best case or go down to $0 in the worst. This value is based on Syncapse analysis of five factors per fan: product spending, brand loyalty, propensity to recommend, brand affinity and earned media value.
On average, a Facebook fan participates with a brand 10 times a year and will make one recommendation. Value can differ significantly by individual brand. For example, in the case of Coca- Cola, the best case for fan value reaches $316.78 but is $137.84 for an average fan. In the worse case scenario, a fan is worth $0.
About the Data: Using its social media monitoring and analytics platform, Sysomos looked at the authority rankings of five celebrities, five social media heavyweights and five media organizations. Rankings were based on the kind of Twitter users following these celebrities, social media heavyweights and media organizations. Each Twitter user is assigned an authority ranking between 0 to 10 – with 10 signifying someone with very high reach and influence. This authority ranking is based on the number of followers, following, updates, retweets and several similar measures used by Sysomos.
FREE Customer Research and Why You SHOULD Run Ideas By Your Audience First
free research on twitter – twitter ROI
what CNN should have done before they launched their radical new design (which apparently they themselves thought was really cool, but their readers and others, not so much)
RT @bmorrisssey
ClickZ articles by Augustine Fou, PhD
Dr. Augustine Fou is Group Chief Digital Officer of Omnicom’s Healthcare Consultancy Group. He has nearly 15 years of digital strategy consulting experience and is an expert in data mining, analytics, and consumer insights research, with specific knowledge in the consumer payments, packaged goods, food/beverage, retail/apparel, and healthcare sectors.
Dr. Fou has provided strategic counsel on the use and integration of online marketing to clients such as AT&T, IBM, Intel, ExxonMobil, MasterCard, Unilever, Pepsi, DrPepper, Frito Lay, Taco Bell. KFC. Atari, Conde Nast, Hachette Filipacchi, Victoria’s Secret, Liz Claiborne, and others. He has served as expert witness on online payments for the Federal Reserve Bank of New York, and advised government agencies such as the Norwegian Trade Counsel, the Gouvernement du Quebec, Invest in Sweden Agency, and the Canadian Consulate.
Dr. Fou is an Adjunct Professor at New York University in the Integrated Marketing Department of the School for Continuing and Professional Studies. He also writes a monthly column for ClickZ’s Experts Columns on Integrated Marketing and is a frequent speaker and panelist at online and advertising industry conferences.
He started his career with McKinsey & Company and recently served as SVP, Digital Lead at McCann/MRM Worldwide. Dr. Fou completed his PhD at MIT at the age of 23 in the Department of Materials Science and Chemical Engineering.
Recent articles by Augustine Fou
The 22 Immutable Laws of Marketing No Longer Apply, Part 3
Debunking the laws of singularity, unpredictability, success, failure, hype, acceleration, and resources. Last in a three part (3 comments) Apr 1, 2010
The 22 Immutable Laws of Marketing No Longer Apply, Part 2
Why the laws of duality, the opposite, and others no longer hold true. Second in a three-part (1 comments) Mar 4, 2010
The 22 Immutable Laws of Marketing No Longer Apply
The game has changed as the balance of power shifts away from advertisers to the very people they used to target. First in a three part (14 comments) Feb 4, 2010
10 Commandments of Modern Marketing
A list of the 10 rules every marketer should follow to meet consumer needs in (18 comments) Jan 7, 2010
Is Believing in Behavioral Targeting Like Believing in Santa?
Should we have grown out of our naïve belief in behavioral (25 comments) Dec 17, 2009
What’s Wrong With the Net Promoter Score
Three reasons why the Net Promoter score is a waste of (19 comments) Nov 19, 2009
How to Do Social Marketing in Heavily Regulated Industries
Financial services, pharmaceutical, and healthcare are ripe for social marketing. Here’s (11 comments) Oct 22, 2009
A New Definition of ‘Digital’
Defining ‘digital’ as the collection of habits and expectations of today’s consumers — and what that means to (7 comments) Sep 24, 2009
Metrics, Metrics Everywhere
Thanks to social networks and digital tools, metrics can provide relevant marketing research in real time and reveal new business (3 comments) Aug 27, 2009
Branding Today: Why It’s Ineffective, Irrelevant, Irritating, and Impotent
Brands must act on real-time consumer feedback to continuously develop awesome (51 comments) Jul 31, 2009
Advertising Does Not Create Demand, But…
It may help fulfill demand. Understand the (18 comments) Jul 2, 2009
Consumers Have Changed, So Should Advertisers
Five ways that consumers have irreversibly altered their expectations online and (7 comments) Jun 4, 2009
Social Media Benchmarks: Realities and Myths
Benchmarks to avoid and others to embrace. (5 comments) May 7, 2009
The ROI for Social Media Is Zero
If social marketing’s done right, the potential ROI could be infinite. Five tips to get you (51 comments) Apr 9, 2009
How to Use Search to Calculate the ROI of Awareness Advertising
Planning an awareness campaign in TV or other media? Advertisers can now correlate money spent on that campaign to a lift in sales — and estimate the return on (4 comments) Mar 12, 2009
Social Intensity: A New Measure for Campaign Success?
A look at two metrics that online marketers should pay attention to today. And they are not frequency and (4 comments) Feb 11, 2009
Beyond Targeting in the Age of the Modern Consumer
Three tips for using “missing link” marketing to solve targeting’s Jan 15, 2009
Experiential Marketing
Consumers are savvy and informed; they won’t just take your word on a product. Experiencing the product is more important than (1 comments) Dec 18, 2008
Search Improves All Marketing Aspects
Search is much more than just an opportunity for marketers to push out another Nov 20, 2008
Social Commerce: In Friends We Trust
How to integrate social networks into your marketing (1 comments) Nov 6, 2008
How low can you go? Poll of what percentage of people trust advertising
Source: http://www.marketingcharts.com/topics/behavioral-marketing/distateful-ads-hurt-brand-appeal-12414
34% of respondents 18 and up said soft drink advertising was the most trustworthy,
22% said fast food advertisements rated most trustworthy
18% pharmaceutical companies
14% auto companies
13% financial services companies
If 1 in 3 or as low as 1 in 10 trust ads, even if they saw the ads, they are likely to ignore them or NOT base their purchase decisions on them. Imagine if you had spent a ton of money making the ad, and another ton of money to air or place the ad, how low the ROI would be, if any.
Popular Posts – Week Ending March 19, 2010.
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What can search volume tell you?
Evian baby viral video has much higher ROI than Etrade baby superbowl ad
The Evian baby viral ad (red spike) got almost as much search volume as eTrade’s Superbowl ad of 2009 (blue spike). But Evian paid millions less by skipping the expense of airing the video on traditional media; instead they just posted it to YouTube for free. But notice that in both cases the effect was ephemeral (not long lasting) — notice the narrowness of the spike. Interest in the viral video also subsided quickly. But at least Evian didn’t waste millions on producing and airing it — thus achieving a massively larger ROI than Etrade who paid to make the ads and then air it at great expense on the Superbowl for the last 3 years.
Etrade Baby Ad
Evian Baby Viral Video
RTB – real-time bidding may make ad exchanges more efficient, but it still won’t save display (ads)
in response to this mediapost article
http://www.mediapost.com/publications/?fa=Articles.showArticle&art_aid=113621
While RTB will make ad exchanges even more efficient, it may not be that necessary.
RTB depends on 3 things: 1) inventory, which depends on how many people hit the page to generate an impression, 2) clicks, which depend on people clicking something, and 3) bidders, the more niche you get, the fewer bidders there will be. Inventory does not change rapidly. Clicks take time to accumulate (to yield click rates, which are a necessary ingredient in the RTB calculation). And if there are too few bidders the price of the auction “item” won’t appreciate or depreciate much or rapidly. Because of these 3 things, making bidding real-time versus non-real-time (i.e. overnight) may not make it significantly better or move the needle much on efficiency and ROI.
And RTB will still not save “display” ads. The golden age of display was in the mid 90s when people tolerated ads when they read content. They are now trained to avoid looking at the top and right of web pages So while RTB may increase the ROI of display ads by increasing click rates from a percentage with too many zeros to count to something sligtly higher, display ads are still ignored by users and will still not generate measurable business impact for advertisers.
Facebook advertising metrics and benchmarks
Summary
Facebook click-through rates of 0.01 – 0.05% (Facebook CTRs)
Facebook effective CPMs turned out to be $0.01 – $0.19 (Facebook eCPMs)
Facebook average CPCs ranged from $0.05 – $0.25 (Facebook CPCs)
Other social media benchmarks from my experiments (Adwords, StumbleUpon, PayPerPost / Izea) can be found here.
Comparison of click-through rates for search ads versus display ads
As a scientist, I like to run experiments. And I like to make stuff. So my team and I made a few Facebook apps that solved needs that we had (a few samples listed below) and shared them publicly on Facebook to see if they were also useful to other people too.
I beta tested some apps with a few friends by inviting them directly. Then to get it out to a larger number of people, we decided to try Facebook advertising, the much-hyped, holy grail of display advertising on one of the largest and most active social networks.
http://apps.facebook.com/netflixr/
- visual discovery, share, and queue management interface for Netflix
http://apps.facebook.com/musicsamplr/
- visual discovery and sampling interface for music (Amazon backend)
http://apps.facebook.com/phreetings/
- create and send photo or video e-cards by drag and drop (Flickr and YouTube backend)
http://apps.facebook.com/visualfriends/
- visual display of your friends (closest ones have the most recent status updates)
http://apps.facebook.com/myfavethings/
- social commerce – I’ll buy what he bought; things I have, things I want
But what I found was eye-opening to say the least. Despite the potential of social ads where the social actions of your circle of friends could make the ads more targeted, none of the anticipated positive effects were observed. Despite the promise of mass reach, there was not the corresponding attention or clicks. And despite the use of demographics-based targeting, there was no statistically significant difference between different targets nor the control sample, running during the same time period.
What we saw were click-through rates of 0.01 – 0.05% — and the 0.01% often seemed like rounding because they did not report more than 2 decimal places. As a result of these click rates the effective CPMs turned out to be $0.01 – $0.19 and average CPCs ranged from $0.05 – $0.25. I’ve been running these Facebook ads for more than 12 months; and millions of impresisons later, there is no observable improvements to CTRs and thus CPMs and CPCs. But since I set up the campaigns to only pay when there is a click (CPC basis), I can let these run indefinitely because I am getting so few clicks, it’s not even making a dent on my credit card (which I use to pay for the ads).
detail of low click through rates of facebook display ads
Ideas for Facebook
In the spirit of openness, as an advertiser who wants to continue using Facebook advertising, perhaps there are a few things they can do to improve the effectiveness of Facebook display ads.
1. reduce the number of ads per page to 1 – displaying multiple ads artificially depresses click-through rates because users can only click on 1 thing at a time, even if they liked more than one of them. Displaying 3 on a page simply increases the denominator while the numerator does not increase — in the click-through rate equation: clicks / impressions.
2. make ads sharable – in the rare instance a user views an ad, it may or may not be relevant to her, but she may know that it is relevant and timely for a friend. By making ads sharable, she can click and send to a friend, who is very likely to find it useful and valuable, especially having been sent by a friend.
3. let users opt-in to ads in specific topic categories - when users are in the market for specific things, they are more likely to subscribe to pertinent news feeds, offers, etc. related to that topic or category. By giving users more power over what they want to see, it will also give advertisers more targeted and engaged prospects to target.
4. expand search-based advertising – when users search they are looking for something and are open to discovering something they didn’t know to ask for. So ads served up in response to a search is usually a lot more effective than ads served up simply when a page is loaded (display advertising). Facebook can serve display ads based on pertinent search queries.
Earth to Facebook… anyone listening?
By Dr. Augustine Fou. Dr. Fou is Group Chief Digital Officer at Healthcare Consultancy Group a group of agencies within the Omnicom family specializing in pharma and healthcare. He helps clients develop digital marketing programs or improve the efficiency and cost-effectiveness existing campaigns via advanced analytics, social marketing, and digital strategy. You can read more of his writing on digital marketing on this blog and follow him on twitter @acfou.
Revision 6/30/2009: Facebook Click Fraud
Excerpt from TechCrunch: “Click fraud is serious business on the big search engine advertising networks because the bad guys can make serious money. Sign up for an Adsense account and put those ads on parked domain names or wherever. Then all you have to do is start clicking those ads like crazy, using bots or cheap labor.” On Facebook, “advertisers are clicking on competitor ads to drive up their costs and drive down their ROI.”
“So the bad guys just create thousands of fake Facebook accounts with a wide variety of demographic information. This sounds like a lot of work, but it’s highly automated. the going rate was just $10 per 100 accounts if you supply the unique email accounts. Once the accounts are created, they use software to fill out the varied demographic information, and that software also manages all these accounts. The fraudster then logs in to Facebook via these accounts and views the ads that are displayed. The right competitive ads come up and Bingo, the software then clicks them. Facebook rules allow an account to click any advertisement up to six times in a 24 hour period, and all those clicks are charged. All you need is a few accounts to view the ads and then click to the max.”
http://www.techcrunch.com/2009/06/26/facebook-click-fraud-101/
http://www.techcrunch.com/2009/06/21/facebook-admit-click-fraud-problem-says-fix-coming-today/
Despite click fraud, the click through rates are still incredibly low. So if you subtract all the click fraud, is ANY advertiser making ANY money from facebook advertising?
Others have found similarly dismal click through rates from Facebook advertising
Source: http://www.friendswithbenefitsbook.com/2008/04/07/facebook-ad-click-through-rates-are-really-pitiful/
Facebook Ad Click-Through Rates Are Really Pitiful
April 7, 2008 – 5:03 pm
Quite by coincidence, I’ve encountered a few statistics on Facebook’s advertising platform. I thought I’d post links to the results I’ve uncovered, in case anybody is wondering about average CTR rates for Facebook.
First up, Rod Boothby got a click-through rate of 0.01%:
This week, I ran $105 worth of Facebook Fliers. That bought me 52,500 impressions. It looks like the flier bought me about an extra 500 site visits. That’s about $0.21 per hit.
Michael Ferguson ran a bunch of Facebook ads for Kinzin:
Click-through rates are abysmal. I was running the identical ad in about 15 different regions (you need to run them as separate ads to get the stats broken out), getting just over 10M views. Our average clickthrough rate was 0.06% (that’s 1 in 1513, for those counting at home). The best we did anywhere was 0.14%.
He later reports that the conversion rate was “at a pretty reasonable clip” at about 5%. By ‘conversion’, I think he’s meaning people who actually signed up for Kinzin’s free service. All of this stuff is contextual, but if visitors had to lay down money, the conversion rate would be considerably lower.
The folks at Valleywag report similarly dismal numbers:
Media buyers — the agency people who book campaigns — report that the college social network is a truly terrible target. They’re mainly students, with low disposable income, of course; but, beyond that, the users appear to be too busy leaving messages for eachother to show much interest in advertising. Facebook’s members appear indifferent even to movie advertising aimed at their demographic. Clickthrough rates, the percentage of time users click on an ad, average 0.04% — just 400 clicks in every 1m views — according to one report seen by Valleywag.
From AllFacebook:
Fred Wilson has been updating the world about his venture in Facebook advertising over the past week. Today, Fred posted and updated screenshot of his ad campaign’s performance and it doesn’t appear to be too stellar. For one of his campaigns, out of 10,080 impressions there were only 8 clicks. The average cost-per-click for Fred was $0.08 and the average CPM was $0.06. This is a less than stellar performance. This is nothing new though.
And lastly, from a digital student marketing blog in the UK. This would seem like a natural fit for Facebook’s audience:
Our most recent campaign saw 1.4 million page impressions delivered at specific universities – and only a 0.04% clickthrough rate. Ouch.
Click-through rates seem to sit around 0.04%, which is profoundly lame if you ask me. I’m no online advertising expert–it’s not really our thing–but I’ve run a bunch of Google AdWords and other contextual advertising campaigns. We regularly get click-through rates of 3%, and I gather that’s nothing special.
Here’s my theory on Facebook: it’s a silo. People visit the Fun House of Facebook, and conceptually treat it slightly different than the rest of the web. They’re in Facebook, interacting with friends, playing games, sending messages and now chatting on IM. As such, they’re really unmotivated to leave. Who wants to leave the Fun House?
We’ve seen similar results across Facebook. It’s really difficult to drive visitors out of the app and to your own website.
The ROI of Social Media is ZERO
What is the ROI (define) for social media? It’s zero. That’s because there’s no such thing as “social media.”
People’s conversations are not media; they can’t be purchased as such by advertisers. In other words, people don’t talk whenever advertisers want them to and they won’t say whatever advertisers tell them to — so it isn’t “media” like TV, print, and radio.
If you treat people’s conversations as media, you’d be doing it wrong. Social marketing done right means asking for and respecting people’s conversations and giving them a public place to talk so others can hear. If the advertiser’s product is already great, much of the conversation will be positive. But even if it isn’t the advertiser will have the benefit of free “product research” because people will give them ideas for improvement.
Untargetables are hard to reach. Unreachables are not reachable by traditional advertising media or channels.
read more about the ROI of social media on ClickZ … http://www.clickz.com/3633341
Digital Consigliere
Dr. Augustine Fou is Digital Consigliere to marketing executives, advising them on digital strategy and Unified Marketing(tm). Dr Fou has over 17 years of in-the-trenches, hands-on experience, which enables him to provide objective, in-depth assessments of their current marketing programs and recommendations for improving business impact and ROI using digital insights.
http://twitter.com/acfou
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