Marketing is broken – it’s time to fix the problem

The first part in a five part series on social media ROI.

CMOs all over the world are coming to realise that developing an effective social media marketing strategy is an essential part of their job. Indeed it may be critical to keeping their job. A recent article in the Harvard Business Review entitled “Marketing is Dead” refers to research that indicates CEOs have lost confidence in, and patience with CMOs. That research shows 73% of CEOs think that CMOs lack business credibility and the capability to generate sufficient business growth,and 72% are tired of being asked for money without explaining how it will generate increased business.

In this environment the massive audience participation in, and high level of measurability of social media platforms make them a very attractive option for marketers. But any strategy to engage consumers in cyberspace needs to recognise that people behave very differently within social platforms than they do in other places online. People are not looking for products in social networks; they are looking to connect with people.Thus the Google model, of serving up an offer based on the online action the person is taking, is not working all that well for Facebook.

So the race is on to develop strategies, methods and measurements that actually work in the social media space.

There are many well used metrics that go beyond simply putting numbers on impressions and interactions. For example the media interaction rate (Media interaction rate measurement (%) = Total interactions with asset/Total views of asset) measures how many users agree to interact with an asset  (a Facebook ad, for example) out of the total people that viewed the asset. This measurement allows us to determine how compelling any online value proposition is to an audience. The cost per interaction rate (Cost per interaction = Total campaign spend/Total interactions across assets) measures the cost of each interaction with a campaign asset. The cost per view metric (Cost per view ratio = Total campaign spend/Total asset views) defines the cost required to drive a user to view a digital campaign asset. This is likely to be a Facebook page, but can also be a YouTube video or landing page. But even these calculations are little more than softer brand exposure metrics.

On the journey to better qualifying social media ROI we must look at the raw numbers these platforms generate such as Facebook likes and Twitter followers. It is reasonably simple to measure the cost of each social acquisition (Cost per acquisition = Total campaign spend/Total campaign acquisitions) which can then be used as an engagement score for a social media campaign. It tells you  how well the creative concept is working at capturing peoples’ attention.

We can also look at social media more broadly to determine what people think of your company and if they are helping spread a positive perception of the brand. There are many tools, such as Kred and Klout, that  help marketers identify these brand advocates and develop ways of rewarding this behaviour. Developing metrics for an advocacy strategy is a fantastic way of developing better ROI metrics.One example is the number of brand advocates that have been active in the last month. The calculation for that looks like this: #of active advocates (30 day cycle)/total advocates = active advocate ratio.

Ultimately what businesses are interested in is sales. The metrics discussed above are an important part of that journey but there is still a big gap between these metrics and directly linking that online activity to converted sales. Traditional thinking says that if you create greater awareness then some of that will work its way down the funnel to produce an uplift in sales. But the effectiveness of  this approach has progressively declined  as the media landscape has become increasingly fragmented. And this trend shows no signs of abating. This is what underlies CEOs doubts, reflected in the HBR article, about CMOs capability and credibility.

The big leap in digital marketing will be driven by users data. There is a massive amount of information held about each online user and social media gives us an avenue to access it. The following articles in this series will address how brands go about developing a strategy that allows them to make the most of this opportunity, then turn that into measurable sales.

12 Responses to “Marketing is broken – it’s time to fix the problem”

  1. Simon Mitchell
    August 27, 2012 at 11:03 pm #

    An excellent article Mark – cheers for publishing this…

    I have been thinking about exactly these (ROI measurement) issues recently…

    Simon Mitchell

  2. Simon Mitchell
    August 27, 2012 at 11:08 pm #

    Actually – further to my previous point – what is the origin of the Social Media Traction equation you have incorporated into your article?

    Can you explain it a little further?

    I have printed it out and I’m looking at it – I’m unsure what “Balance of Sentiment” and “First Generation Placements” mean?


    • Mark Cameron
      August 27, 2012 at 11:34 pm #

      The balance of sentiment is when you look at the positive, neutral and negative what is the overall ratio. The First generation placement is origin of the post – where the idea started. Essentially this is the start of an advocacy score.

    • Mark Cameron
      August 29, 2012 at 12:12 am #

      Hi Simon,

      The equation doesn’t actually make a lot of sense (the first set has one too many brackets fro example) – it’s something I found while researching. I think it’s heading in the right direction so let me know if you’d like to collaborate and get it right?!?


  3. Jerry Bridge
    August 28, 2012 at 3:07 am #


    This is a very interesting article, especially for the likes of me as I am just beginning that wonderfully challenging time of trying to secure financial contribution towards my own startup travel ‘portal’ venture – ! I am in the process of learning as much as I can about social media channels to help promote some of the products and services of companies such as Qantas or Tourism New Zealand within my Various joint venture proposals. But I have to say that some of the more traditional methods of offline marketing like good old fashioned advertising should not be discarded!

    • Mark Cameron
      September 4, 2012 at 4:44 am #

      Hi Jerry,

      You are quite right. Traditional advertising should not be discarded – but it should not be lead marketing efforts. In fact it should support social media and data based activity.

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