"ROI May Be Measurable in Facebook, MySpace After All"

"Package-Goods Brand Earns $1.28 Million in Sales From $1 Million Social-Media Campaign".

This is according to a study done by Comscore, MySpace and Dunnhumby. The article was in Ad Age, but the link is now going to a paid subscription page. Anyhow, I will grab the salient points for you all...

Case Study
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MySpace marketing ROI for unnamed personal-care brand:

• Total consumers exposed: 76.9 MILLION
• Percentage of internet population: 40%
• Total impressions: 1.1 BILLION
• Media outlay: $1 MILLION
• Offline sales generated from campaign: $1.28 MILLION

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And this is what they did together:

"Generally, the ROI tool of choice for consumer package goods -- marketing-mix models that rely on econometric analysis of changes in retail scanner data -- can't pick up the impact of the relatively small five- and six-figure outlays package-goods brands make on digital media.

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 details: (And I am going to just CONTROL-C and CONTROL-V)

"One of the first studies was for an unnamed personal-care brand that ran a $1 million campaign on MySpace last year, including a contest in which members submitted videos of themselves and friends for others in the network to vote on, said Heidi Browning, VP-client solutions at MySpace. The program also included online couponing.

By the standards marketers sometimes use to measure digital-ad effectiveness, the MySpace effort wasn't overwhelming. Of 76.9 million people exposed to the campaign in four months, as estimated by ComScore, only 765,000, or fewer than 1%, visited an advertiser page on MySpace, though roughly half who did (358,000) visited the advertiser's website.

But by the measure that matters most, sales, the campaign appeared to pay off nicely. It produced $1.28 million in offline sales, as measured by Dunnhumby, which compared purchases among shoppers not exposed to the campaign with purchases among those who were. That amounted to a 28% return on investment, not counting returns from repeat sales among consumers the brand won via the campaign. Only about 17% of the sales were of products advertised in the campaign; the rest of the sales lift went to the parent brand, in what's frequently called the 'halo effect.'"
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I don't know about the ROI calculation, but this kind of thinking starts to move us back to square one. Digital is a very measurable marketing channel, but you need to measure the right things. And it is not always about sales and revenue - especially for consumer package goods sold offline.

We need to move management away from thinking Digital = Sales. Digital is a great branding and marketing channel because you can measure the effectiveness by metrics like pageviews, time spent, product views, repeat visits, etc. at campaign level. But just because it is digital, it does not mean we should expect ROI metrics.

Having said that, our round table discussion at iMedia Brand Summit last week brought up an interesting point. Brand marketers are currently using consumer research companies (IRI?) to measure effectiveness of TV, Print and other offline marketing efforts. They have not done this with online campaigns, and hence are not able to internally justify increasing digital spend for brand marketing. In which case, the above is a great case study of how to measure the marketing effectiveness of digital on offline sales.