ADOTAS – Last week, RevTrax released the results of a study, conducted in conjunction with Yahoo, that analyzed the influence of online paid search on not just online sales, but also (and in particular) in-store sales. ”For a long time, [studies] have been measuring online-to-online,” RevTrax COO Seth Sarelson pointed out in a recent phone conversation, but “the value of ROI is ecommerce plus offline.” RevTrax was interested in figuring out how paid search affected “multi-channel merchants who do 80, 90 percent of their business in-store,” he explained.

The results were striking. When it came to revenue generated by paid search, say the study’s results, for each dollar generated in online sales, $6 were generated in offline sales. The average click on a paid search ad brought in around $15 in in-store revenue — some retailers saw as much as $28. Around nine percent of clicks on a paid search ad led to an in-store sale, but for some retailers, that figure went up to 26 percent. Some retailers noted between 40 and 50 percent of the customers pulled in by paid search were new customers for them.

The study took coupons redeemed in brick-and-mortar stores that customers had downloaded from the web (printed coupons as well as mobile landing pages), and traced each coupon backwards, using its unique bar code, to the search the customer had conducted that led him or her to that coupon. By tracing the sale back to the key words a customer entered into a search engine, Sarelson explained, “it adds a degree of transparency, or perhaps that transparency hasn’t been there before.” The study included associated data “back to the beginning of the impression — average order size, the time from when the coupon was printed to redemption, the number of clicks, total spend.” And from there, he said, “clients can start to optimize campaigns.”

RevTrax took two years to research this study (August 2009 through August 2011), but Sarelson said his company’s efforts are “not static. Phase two is an offline data feed, if you will, that’ll go into these data pools and optimize on the fly.”

For now, Sarelson acknowledged retailers should take a look at how online search affects not just their online sales, but their in-store sales, so they can give credit where credit’s due. “Our clients are making sure [of] internal attribution for people responsible” for bringing in their revenue, he said. “All media drives everywhere.”

Less often discussed are the very serious implications this anonymity has for marketers. Nearly two out of three companies describe the extent of their social media activity as either heavy (21 percent) or average (43 percent), representing a 21 percent increase from 2010, according to a recent report from Econsultancy, LBi and bigmouthmedia. Obviously, social media is now in the “must-do” marketing media column for both B2C and B2B. And yet, we’re almost turning the corner into 2012, and there still isn’t a standard way to measure the financial and tangible benefits of using social media.

What is the ROI for social media, anyway?

Ask 10 people using it in their marketing plans, and you’ll probably get 10 different answers. Though marketing budgets are shifting more toward social media efforts (according to a survey completed this summer by Booz & Company and Buddy Media of managers from Fortune 100 companies about their investment in social media),* companies are still struggling to understand the impact of social media on their bottom line.

In fact, two features of social media make such analysis at best indirect, and at worst a waste of time. The first, as discussed above, is the anonymity. Restrictions on access to private information make it, in many cases, impossible to trace social media engagement back to concrete business impact. The second is that brand interactions and discussions happen away from business-owned digital properties. Combined, these two variables create a virtual barrier to the kind of metrics digital marketers have grown accustomed to using in their determination of ROI.

Since there typically is not a direct correlation to the point of revenue, getting too granular on ROI measurement can be distracting. At a certain point, you have to ask yourself, “What is the ROI of determining ROI?

Remembering our roots

So where does that leave us? Well, ironically, this dilemma shouldn’t feel too unfamiliar to marketers — though perhaps savvy digital teams might want to buy a round for some brick-and-mortar senior staff and pick up a tip or two — because it’s not too far from what they faced when the most advanced media around was print and television. Traditional marketing has always involved a measure of trust. Awareness has been a huge part of marketing magic: We put your message out there, try to influence public perception through solid, memorable brand initiatives, and hope that it touches a nerve, that the best message wins.

The time has come to embrace this leap of faith in the social media sphere. In many ways, after all, it actually keeps us honest. Again, people have the power — where once they could turn the channel, now they do their own research. They discuss, investigate, and make decisions about your brand on their own turf, and in many cases, the best we can do is obey the “content is king” paradigm, give them high-quality information about (hopefully) high-quality products, and, well, hope that it touches a nerve.

Awareness and engagement

But, of course, social media does give us a leg up on our marketing precursors. While we can’t use traditional analytics to rationalize social media efforts into dollars-and-cents conversions, there is undeniable value in engaging with consumers in these forums.

Social media is the first immediate feedback loop that we have with our target consumers as a group. Fortunately, many elements of it are highly measurable, thanks to the digital nature of the medium and the early development of robust tools. One popular way to measure social media interactions is to gather data that shows brand awareness and engagement. As a baseline, my company, the Garrigan Lyman Group, recommends our clients start listening and measuring a few basic things:

• Site traffic
•Search volume and terms
• Number of likes, fans, or followers
• Number of conversions
• Number of contributors
• Number of mentions and positive comments
• Number of page views
• Number of shares by your fans
• Number of retweets

These are metrics that can tell you how you are doing as compared to your competitors. They can also be used to determine what impact your social media outreach has on the social web in general. Did our marketing efforts increase engagement with our brand? How were we received?

Stop worrying and start interacting

Over the last 10 years, we’ve learned a great deal about digital marketing — we’ve learned how to track impressions, maximize click-through and drive conversion. But it’s also spoiled us. And now, when encountering a new form of digital media, we’re so suspicious about our inability to measure its impact in the same way that it’s easy to overlook the basic and most important point: the only way you are going to actualize any benefit from social media — let alone get real-time feedback from your consumers about your brand or products — is to stop worrying and start interacting.

* The study found that social media will become a higher percentage of total digital marketing spend in the next three years, with 28 percent of respondents stating social media will increase to make up more than 20 percent of their digital marketing spend by 2014.

As their needs become more sophisticated, so too must agencies’ and technology providers’ solutions. The rapid pace of evolution demands that service providers must anticipate clients’ needs before they even inquire, a prospect that requires agencies and their partners to stay one step ahead in their expertise and offerings.

As the buzz in the digital marketplace escalates to a fevered pitch, the prospect of becoming the next viral sensation has every new company aiming to become the next Google or Groupon.

Despite the furious pace, the demand to be disruptive remains paramount. While hard-numbered ROI remains a focus, sometimes beating the competition and the drive to become a first to market player can be more powerful than the dollars-and-cents model of measurement. When the goal is to build buzz and awareness, the halo of effect of marketing a new idea can tip the measurement scales away from conventional metrics.

With all of these factors to consider, innovative companies want to feel like they’re in control, despite the frenetic situation. And they’re looking specifically and directly to their agency partners to do more, perform better and give the brand and their campaigns wings to rise above the clutter.

Certainly there are economic reasons: companies need to be more efficient with every dollar spent, and agencies are being held accountable—the impetus to be more efficient and prove your worth has rarely been more urgent. But there’s also a bigger picture: emerging companies looking to make waves are also eyeing their potential investment opportunities and must show a confident, yet novel, approach to leveraging new media to remain attractive to possible investors.

It’s a tall order for any agency these days to fulfill the myriad demands. However, by anticipating your clients’ needs and staying ahead of the latest innovations in the industry, coupled with taking a chance on an untested partnership, it is entirely possible—and profitable—to deliver the innovative and successful digital campaigns that become a sensation. But how?

Meet regularly with new and emerging providers in the marketplace.

“Really?” you ask. “I just don’t have the time.”

Make the time! With so many startup companies in the digital space, it seems all are looking for those 1-2 ideal innovative clients to come on board and test their business model, to make sure their hypothesis works in real life.

With the right kind of savvy and willingness to explore new opportunities, agencies can often take advantage of these start-up opportunities at a relatively inexpensive rate, which can not only meet the economic goals of the campaign but also give you bragging rights for being the first to market with a novel approach. Even if their offering is not a good fit right now, it’s critical to keep your extended team educated, so that in the event you do land a client in that space or category, you already have this inherent knowledge to get up and running quickly.

This is where relationship-building becomes crucial. Take advantage of the fact that publishers and technology providers know their business and we know our clients: let’s collectively work together to come up with unique solutions to better serve the client.

Understand the client’s real goal, not just the media goal.

This seems simple, but it’s not. From a business perspective, what are they trying to accomplish? This will determine which media choices to explore.

For example, is it really about getting more Facebook signups, or is the real goal to build an engaged community? Are we aiming to get more clicks or get more people to buy? It’s up to the agency to get to the heart of what we’re really looking to achieve.

By first determining the long-term goal, we’re better able to devise a strategy and choose the right tactics that will get us there, rather than merely throwing the latest and greatest tool in the chest at the situation to see what works.

Identify a mutually-defined measure of success. Managing client expectations in the digital space can be difficult as the ROI can sometimes be hard to define. The client must understand what’s realistic—and what is not. Don’t run any campaign unless the success metric has been defined, whether that be a specific number of clicks, sales, etc., or merely to move the needle.

Ask what it is that we’re trying to accomplish before we even start. Many times, the agency simply doesn’t ask—they just take the money and run, which is no way to build a long-term relationship with a client. Absent this clearly defined measure, I’d honestly rather not deploy the campaign, sacrificing the short-term dollars for the tradeoff of potential longer-term success.

The evolving digital space can seem even more chaotic for small shops, but it is certainly possible to compete with, and even outperform, the big boys when you build a network of vendor partnerships. Building a broad stable of resources that you can tap into on demand can give any size agency the flexibility and agility to meet ever-changing client needs and keep up with the latest innovations in the industry in the most economical and resource-friendly fashion.

This partly stems from a tendency to see success defined exclusively in terms of Facebook or Twitter numbers. If you run a campaign that gets 90,000 “Likes” on Facebook or attracts 40,000 new followers on Twitter, what does it actually amount to? A consumer’s throwaway click of a button cannot and should not be the only measure of success.

The huge success of some social networking platforms has brought a wealth of personal information and valuable data into the public domain – a situation that marketers could only dream of just a few years ago. Consider for a second all the data people publish about themselves online – their name, age, location, hobbies, interests, favourite song, favourite film, etc. – for advertisers and marketers this is invaluable for targeting their adverts, optimising their online campaigns and shaping their messages and strategy.

Now consider the value of that basic demographic information and amplify it a thousand times and you get close to the value of understanding expressed intent. This is no exaggeration. Imagine if brands, ad networks and marketers knew what millions of people were going to do before they did it, or exactly what they wanted to purchase and could target ads accordingly – offering them exactly what they want, exactly when they want to buy it – the potential is mind blowing.

Targeting content and messages to people when you know all their demographic information, as well as their current mood and what they are planning on doing next, seriously stacks the deck in favour of the brands that can tap into that level of insight. Someone posts, “I’m thinking about booking a holiday to Florida, but flights are so expensive” and as soon as its published, an online ad with cheap flights and hotel deals in Florida is served to that person maximising the chances of converting that sale.

Ad targeting has improved in recent years, to the point where brands, ad networks and marketers can make well informed guesses as to consumers’ next steps, based on their online behaviour. But the crucial point is that this is still guess work. Sure – it’s an educated guess backed up by sophisticated behavioural data, but it’s still guessing.

The difference between identifying intent and behavioural targeting is that the former understands and is able to act when someone says “I want to do this” or “I’m going to do this,” while the latter assumes that “because this person clicked X and searched for Y, they will probably be interested in Z”. It’s an improvement on keyword targeting, but identifying intent is so much more valuable.

Realising this potential requires sophisticated technology that can understand even the most subtle nuances in written language and then be able to dynamically serve the relevant ad or content alongside it. Although it might come as a surprise to some marketers or agencies reading this article, the technology to do this is not in a lab at MIT. It’s here and available now.

A new breed of services that leverages advances in semantic technology is providing the ability to automatically understand the meaning behind online content or conversations and delivering an infinitely more sophisticated analysis rapidly and at scale. Using advanced natural language processing technology, such as OpenAmplify’s (my company), it is now possible to analyse and understand all the topics, emotions, actions and intentions expressed by users within text.

One particular service leading the way in this technology renaissance is Radian6’s recently updated insights platform. Announced last month, it is the first social media monitoring platform to actively integrate external data providers in a complete end-user analysis solution. As CEO of one of those partners, this is a technology I’ve gotten up close and personal with, and it is already redefining expectations for what can, and should be, achieved with campaigns.

Marketers who harness this new wave of technology and identify intent in social posts have a great opportunity to go beyond the superficial “brand” engagement that is typical of most campaigns. I’m talking about deep, personal engagement that makes a real connection with users by recognising their intentions and serving a hyper-relevant ad or offer that moves them to action. Boosting relevance naturally lifts effectiveness, proves the value of social media and cements its place at the heart of marketing campaigns of the future.

Having thousands of people “Like” your brand on Facebook is a starting point, but it’s not enough. Having someone like you is no guarantee that you’ll even get to first base, let alone persuade them to part with their cash, and at the end of the day that’s what it’s all about.

The ability to accurately identify intent within social media conversations is a game changer. It’s the golden ticket to delivering a meaningful ROI that will finally prove social media’s ability to deliver on the bottom line.

“Is Facebook social media? How do I get more followers?” If questions such as these trouble you, then you are in luck, because today I am going to shed some light on these questions by cutting out the hype, buzz and social clatter® to hopefully provide some meaningful insight. (Yes, “social clatter” is a trademark I own.)

What is social media?

It’s a communication medium. It’s that simple. And just like the other communication platforms such as outdoor, print and broadcast, this communication platform can be used to communicate a message to increase brand awareness, drive traffic and increase sales.

However, social media has some very unique characteristics:

1. Community Oriented – This is the very reason it is called “social” media; describing such sites as Facebook and Twitter where the primary function is to socialize virtually. The value of this is that if you can directly integrate your message into a social experience, you will have a very engaged audience.
2. Interactive – With the dramatically shortened attention span of the average consumer, brands and advertisers are having difficulty keeping their customers engaged. Because social media offers platforms for virtually limitless interactivity, it thereby offers opportunity to get your consumers engaged by your brand again.
3. Location-Based – Anywhere, anytime. A priceless proposition for marketers. No matter where your customer is, you can know, follow, and deliver targeted messages because of location-based technology that is integrated into social media.

These medium differentiators are why social media is valuable in marketing plans.

How can I leverage social sites like Facebook?

That depends. Facebook and other social media sites, contrary to common belief, are not the answer to all of your problems. And believe it or not, social media might not be very valuable to certain types of businesses. For example, would you choose a general practitioner for your annual physical because they had a cool engagement app on Facebook? Maybe you would, but I definitely would not. It would make me feel that my privacy was at stake, among other things.

Facebook has some very powerful engagement tools that can be used for effective marketing. If you are looking to succeed on Facebook, I suggest the following approach:

1. Strategize – The first and most important thing you can do before launching a Facebook campaign is to strategize what sort of campaign would be contextually relevant to YOUR demographic. Just because Charlie Sheen was able to get a million followers on Twitter doesn’t mean that you will. It may actually turn out that most of your demographic doesn’t even use Twitter. In that case, it would be a big waste of money to market on Twitter.
2. Communicate – Have a strong, authentic message. This seems to be the most overlooked aspect of a successful social marketing campaign. Many people believe that if they create an engaging campaign that it will be successful. Well, just because people engage, doesn’t mean that you will gain their business or loyalty. Message matters.
3. Engage – Social media is all about engagement. Design an engagement campaign based on knowledge of your demographic that will cater to their interests, and that is relevant to your company.

How about privacy?

With the growth of social media, there is also an aspect that must be addressed by every marketer. First you have to recognize the fact that “The Consumer is King.” They will make their decisions and form their own opinion about the brands they choose, based upon how they are treated. It is your responsibility to ask permission to engage or at the very least be respectful of any consumer requests for their identity to be removed from your social media platform. By doing so will create more goodwill than to annoy them to the point where they eventually compromise or destroy everything you have worked so hard to build.

The other aspect of privacy is the issue of people who phish or try to scam or spam your customers. Be vigilant by monitoring your social marketing activities as well as those people on your social platforms. By doing so will ensure that your potential loyal customers are not put in a position of a negative experience. Protect your customers and your brand via proper tools and oversight.

Where is social media headed?

Without a crystal ball, questions such as these are hard to answer. Suffice it to say that social media is here to stay, and if you own or run a consumer facing business, you better jump on the bandwagon or your competitors will have a significant leg up on marketing to your customers.

Businesses are already questioning the value of social media. I believe that value is going to come into more scrutiny, and with sites such as Twitter that provide endless clatter, what is the value?

Social media does have a value, but it is not priceless – and in my opinion should not be considered so precious. It should be strategically utilized as part of a comprehensive, integrated marketing effort.

And as online advertisers, agencies and publishers leap into this year with an attribution model on their list of goals, they often ask the same question: What should I expect?

How will moving from last-click attribution model to a full-funnel attribution model affect how I buy media?

What should I expect in search?

What should I expect in display?

What should I expect in affiliate?

With news from the longest running attribution study of its kind (two years), expectant media buyers will be pleased. But before we deliver the results, let’s reveal how our industry first came to ask these pregnant questions.

Imagine you’re responsible for a multimillion dollar online ad budget. And you learn that today’s outdated online ad tracking systems give 100% credit to the very last clicked or last viewed ad before an online transaction.

Example: if seven Internet ads contribute to a transaction, today’s outdated systems allocate entire credit to the very last ad, ignoring the prior ads that created your revenue.

Zero credit to revenue drivers — 100% credit to the last ad. It must be a bad dream, but it isn’t. For Internet advertisers spending $70 billion worldwide each year, we’re slowly waking up to the problem.

Now some coffee — a full-funnel media attribution model. Robust attribution modeling systems recognize credit should be assigned to a team of Internet ads versus the last ad.

Teamwork in attribution modeling arrives through assigning credit to Originators, Assists, and Converters within a transaction. Every transaction.

An attribution model should capture all online media sources involved from the top of the funnel where sales originate… down to the very bottom of the funnel. So in a $100 transaction, an Originator would receive a fraction of $100 credit–and the Assist and Converter would also receive fractional credit of the $100 attributed to them respectively.

One hundred percent of revenue credit is attributed and split among Originators, Assists, and Converters–accounting for the actual drivers of revenue. Then revenue and respective costs from paid media sources converge in a single, elegant number: Attributed Revenue-to-Spend Ratio (ARSR).

It’s a simple ratio any marketer can grasp. If you have a 4.0 ratio for a specific keyword, or specific Display campaign–you’re getting $4.00 in revenue for every dollar spent on that particular media source. Conversely, if you have an Attributed Revenue-to-Spend Ratio (ARSR) of 1.25 for a particular media buy—you’re getting $1.25 in revenue for every dollar spent there.

Scale paid media sources with high numbers, and cut or improve media sources with low numbers. A quick, actionable and fully attributed metric. The special sauce–is the numerator of the ratio (attributed revenue), derived from full funnel attribution.

Your newborn attribution model can indeed be a bundle of joy (not every attribution model is…read here for seven key details).

But what should you expect in search?

With category keywords (e.g. “Crossover SUV”) you’ll discover good news. These upper funnel keywords are definitely expensive on a PPC basis. Perhaps they kept you up at night because the CPAs were horrible, but blended with brand term efficiency, it came out in the wash.

Now you can sleep. Since a full funnel attribution model measures every PPC term, you attribute not only originations, but assists—tracking beyond current arbitrary time limits, and event caps deleting every view and click beyond the 10 most recent.

So with an accurate picture of the entire funnel matched to costs, some of the most expensive non-brand terms are definitely worth the price per click, and some will not to be. But finally, an attribution model brings full vision.

Competitor keywords–will simply shock you with the knowledge from attribution modeling. As protective parents of our campaigns, we typically view any competitor as a threat, and bid on competitor terms “just because.”

Let’s say you have four competitors. What you’ll discover with full funnel attribution is that you may have a positive correlation to Competitor A and Competitor C. Meaning, you actually want them to succeed–because when Competitors A and C are searched, you actually generate revenue.

So for these two competitors, you’ll root for them. Suprising. But for Competitor B and Competitor D–you may discover a negative correlation. Meaning, when they are searched, all you’re doing is spending money without returns. Essentially, not worth the getting worked up over, and not worth the bid. Surprising.

That’s what to expect in search. And after two years of analyzing and reallocating based on this attribution model–search ROI increased 98% vs. baseline.

What should you expect in display?

Display is a puzzling baby for most people. Sometimes you just don’t know what to expect. What happens in display with a robust attribution model is full revelation. Here’s the tale of two networks:

One small network labored with a small five-figure monthly budget, and wasn’t even on the advertiser’s radar screen. In the first 60 days of attribution modeling, they finally received the credit they truly deserved–a ratio of 4.1. The agency doubled budget with them every month to see if they could scale. Six months later, they enjoyed a healthy seven figure annual budget while holding a solid ARSR.

The flip side. Another display network was discovered to be producing a ratio of 0.9 (less revenue than media spent). The network failed to improve, and spend was cut–improving profitability of the overall ad budget instantly. Their budget was reallocated to media sources producing higher attributed revenue-to-spend ratios.

Intelligent caring and feeding of display delivered 160% higher ROI for the channel in the two-year attribution study. Great expectations.

Now… what should you expect in affiliate?

For current affiliates, nothing much changes. Most often, affiliates are your best performing partners, and there’s a risk the slightest change could cause them to jump ship to your competitors (and revenue runs out the door). Be prudent in the reality of the marketplace. You will, however, have a more accurate picture of your affiliate channel, typically crowding the bottom part of the funnel.

But attribution enables you to recruit new kinds of affiliates…ones who originate revenue vs. competing at the funnel’s crowded bottom. Because, now, you have a model to compensate affiliates for originating and assisting. Without upsetting the affiliate ecosystem and crowding it even more—you plant crops of new affiliates growing new revenue vs. harvesting the existing revenue.

What can you expect when you’re expecting ROI? To summarize the results of longest running attribution study of its kind:

1. Seven-figure efficiency in the advertiser’s online ad budget
2. Display ROI improvement of 160%
3. Search ROI improvement of 98%
4. Accurate economic model to grow non-competing affiliates

What can you expect? The fountain of new knowledge. Sounder sleep at night. And yes, amazing ROI. Welcome to the new world.

Ad Upgrade. Facebook is starting spring cleaning a little early today (they must have listened to that damn groundhog) by revamping its ad system and formally introducing “Sponsored Stories,” which allow brands to highlight in the righthand ad space user mentions from the news feed. Also included are substantial upgrades to the advertiser self-serve platform. AllFacebook has the full details, as well as some gushing about Facebook’s “recirculation system.”

Hong Kong Action. Facebook has opened a Hong Kong office to cater to that island and Taiwan, two markets with 16 million users, representing 10% of all Asian Facebookers, according to Social Bakers. The populations of those two markets make 0.7% of the entire Asian population, but Facebook has witnessed 52% and 51% penetration for Hong Kong and Taiwan. Of course, we’re curious if  its another initiative by Zuck and crew to woo Mainland China, where Facebook has been banned since 2008. Facebook also operates an office in Singapore.

‘Oh, My Precious Privacy!’ According to a USA Today/Gallup Poll, about 70% of Facebook users are somewhat or very concerned about their privacy on the social network, compared to 52% who have the same worries about Google. In particular, 65% of Facebookers fear viruses — Speaking of bad things from the Internet…

DIY Malicious Apps. Have you ever felt like building a malicious Facebook app? Doesn’t matter what for — spreading malware and luring users to click-fraud accounts are popular reasons, but you could also be interested in creating fake surveys that steal user information. If you’ve got $25, seek out your local hacker, who can hook you up with a do-it-yourself toolkit that contains templates for doing all of the above! You can start deceiving Facebook suckers in minutes, according to Websense Security Labs.

Animated Stalker Update. OK, you had to snort a little at Facebook CEO Mark Zuckerberg filing a restraining order against a stalker — the fact that the guy bugged Zuck and his family for money almost sounds like it was a practical joke satirizing Facebook’s targeted advertising. Taiwanese video service NMA, which spits out some of the most hilarious animated coverage of big news stories, gives the Zuck stalker story a spin, culminating with the snappy line, ”Zuckerberg will have to update his privacy settings just like the rest of us.”

It’s time to get smart about social media. Social media today is reminiscent of the early days of other online channels or media — from websites and email, to search engines and behavioral targeting — no one knew quite what success looked like and some of the early experiments were not only un-optimized, some were just plain awful. Eventually, the experimental approach gave way to a more sophisticated, metrics-based approach and soon CFO’s began to notice the healthy ROI’s coming from these online channels.

Social media is on the same trajectory. Many brands are beginning to set goals around social media engagement, which often include measuring the number of fans, followers, impressions, comments, reviews and other variables. Comparing how you’re doing against competitors and market leaders is easy and tools allowing brands to monitor the conversation in the social media sphere are becoming more sophisticated and ubiquitous.

Marketers can track mentions of their brands, as well as the posts of other brands and companies. All of this can help justify the time and expense of pursuing a robust social media strategy, but still falls short of providing solid ROI data. Now tools are emerging that take a giant leap forward.

Marketers wanting to take their social media campaigns to the next level need to ensure that they are using tools that are not only able to track posts and reposts, but can also track all the way through to clicks, orders and sales. This takes understanding the impact of your social media to a whole new level.

Marketers can know which types of discounts and offers from specific posts and tweets are driving the most sales. Or, if brands have several accounts on Facebook and Twitter, they can determine which types of offers to which specific audiences are performing the best.

Tools with these capabilities can help marketers understand which product features and benefits are driving the most sales through social media messages. As messages are re-tweeted, they are tracked and measured, which adds to the overall picture of a campaigns’ effectiveness.

By tracking sales and order performance, marketers can optimize their social media activities based on ROI and traditional direct marketing principles. Time and resources spent on social media just got much easier to justify. Very soon marketers will be able to report to the CMO and CFO that social media ROI is higher than expected and even higher than other online and offline marketing channels — and the data will be there to prove it.

Today I was writing a blog post and wanted to produce a quick piece of analysis; I logged into one of the service companies and was struck by how little I could use it for.

So I went to a tool company and was not sure about the accuracy level. (Note, I blog about social media monitoring tools so I get to use several of them.) The self-service tool companies are great: you can produce quick and simple (and not so simple reports). However, you only achieve a certain level of accuracy with things like sentiment scoring if a machine is doing all the work.

Services are great because you can get a high level of accuracy. However, they are expensive and slow especially for large brands.

So I did some more digging and asked some experts their thoughts.

I read Marshall Sponder’s latest blog post from April 18, 2010, titled “Sentiment Analysis best done by humans” which starts:

“I’m working on an reputation analysis of a international training organization who has expressed concerns about their online reputation. After pulling the data from Sysomos MAP and comparing the sentiment score against human scoring — I’ve decided that if you care about Sentiment Accuracy — it’s best to have humans evaluate sentiment.”

Now that may be true. However, service offerings are not nimble enough for the fast world of social media.

I wanted a quick report; a service would have been far too costly and taken to long for me to wait for. Therefore a service solution is not for everyone or every occasion.

Here is what Giles over at Brandwatch had to say:

“You are talking about where the rubber hits the road as an erstwhile American colleague used to say. My opinion is that for the foreseeable future, a combination is the best solution — i.e. automation coupled with human analysis. So the ‘tools’ therefore need to be is similar to power tools in the real world. You could use a hand saw, but with a lot less effort you can drive a jigsaw and get a better result in a fraction of the time with a lot less energy (or cost).”

Michelle Chmielewski, Community Manager at Synthesio, says:

“The social media monitoring tools are the easiest to compare both for their tangibility and quantitative output, but the analyses and research capabilities differentiate the social media monitoring solutions.

“The tools have simply become the qualifier for the situation, and what comes after is where customers are given value. While we can certainly provide just dashboards, if that is what someone would want, Synthesio would still insist on human sentiment analysis either by our team or the client’s.

“Your first point about the speed of different solutions made me pause for a second because I used to think exactly the same thing; naturally, waiting for manually-filtered data is slower than having a snappy tool that can calculate the percentages in a split second, right?

“Then during a monitoring chat on Twitter last week a friend said: ‘Using free or do-it-yourself tools can take more time.” After the initial setup, we send reports and alerts as often and regularly as wanted, but the graphics are there for printing, saving, exporting; the reports can be exported, sent, or printed; the data can be filtered and then exported, saved as images, etc.

“The only limits are those that the client would place on him/herself. For each client, we’ve tailored solutions to what they’ve asked for. But the person that gets the dashboard has data in front of them that is:

• only relevant to that project
• analyzed according to the project’s requirements
• exportable, printable, sharable
• presentable for reports

“Brands wishing to do research over an extended period of time, or track a campaign’s buzz and evolutions in buzz (in sentiment, volume, sub-topics), or be alerted in case of a possible warning sign of a crisis have been finding that free tools are not living up to their demands.

“Jason Falls just recently wrote about some monitoring tools and said ‘Monitoring tools are computer algorithms and search spiders that collect information and put it together in a place where you can find it. Some of them do a decent job of organizing, stacking, and sorting all that data so you can hit a button and get a pretty chart or graph, too. But none of them do what you want them to do. They only do half the job.’

“And he’s absolutely right. There needs to be human legwork at some point of the process.

“The right tool also depends on the size of the company and their budget. A startup with three employees will do just fine with free and do-it-yourself tools. Managers of a large brand may have to ask themselves if they want its reputation management described as ‘free’ or ‘discounted.’”

So there you have it. Free monitoring tools get you up to a certain point, and human analysis takes you over the threshold, if your budget justifies it.

Aside from being every advertiser’s motivation for advertising in the first place, these three phrases mean nothing to your campaigns without analytics.

Analytics is an essential component of measuring all advertising campaigns; otherwise, there would be no way to accurately determine ROI, the effectiveness of your advertising dollars and if you are indeed getting any bang for your buck.

Too many advertisers fall into the habit of placing and renewing advertising without proper evidence of its effectiveness. A perfect example of this is using certain media to advertise simply because your competition has a presence there.

This practice is most common among subscription-type advertising, such as Yellow Pages, newspapers and billboards, which inherently have a minimum basis for tracking. This age-old, follow-the-herd concept is outdated and slowly disappearing, as advertisers become more budget conscious and analytics savvy.

Although advertisers are becoming increasingly aware of the need for analytics, many struggle with determining which data to track and how to measure. According to a study by BusinessWeek in February 2010 (“From Collaboration to Personalization: Unlocking the Potential of Online Marketing Optimization” commissioned by Coremetrics), only 38% of marketers claimed to be confident of tracking the right metrics to measure marketing performance. This means that the rest of them, a staggering 62 percent, are not completely confident in their analytics.

A lack of confidence in your analytics inevitably means that you shouldn’t draw conclusions or make decisions based on the results of your tracking. The lesson to be learned here is that tracking the right metrics is the most important step in developing a useful analytics program.

Let’s explore what makes a good analytics program, starting with which metrics to track. First, define your success metrics. Ask yourself what you want your advertising to do for you. Do you want to generate leads in the form of phone calls, in-store visits or website clicks, or do you simply want to increase sales?

Next, develop a means to figure out if these success metrics are achievable. Ideally, you want to be able to track these metrics by campaign or media. For example, if your goal is to increase phone leads, listing a unique call-tracking line in your print or Internet Yellow Pages ads will tell you exactly how many phone calls are generated as a result.

Tracking leads or sales by campaign is essential to identifying if a campaign is profitable. Let’s say you want to determine ROI for your Google AdWords campaign. You spent $15,000 and had sales of $200,000 throughout the course of the campaign. Without knowing how much of those sales came from your Google customers, you might just assume that your ROI is around 13:1.

An ROI of 13:1 is impressive, but is it accurate? Probably not. Putting tracking methods in place — special offer codes or coupons exclusive to your AdWords campaign — will help form a better idea about how many sales were actually driven by that campaign.

Determining ROI does not stop there, though. To get a true calculation of your ROI, you need to figure out your cost per sale and overall profit margin. Once you calculate profit from the sales generated by your advertising, you can then divide that profit by your ad spend to reach a true ROI.

We have determined that analytics is essential to measuring the success of ad campaigns, but we haven’t determined what kinds of analytics are best for you. Analytics can come in many forms and at many costs. Here are some ideas about getting started with analytics, as well as making progress with more experience and resources.

Beginner Approach

– Make assumptions based on change in sales volume

– In-store or point-of-sale surveys

– Count incoming phone calls

Intermediary Approach

– Run test campaigns (e.g., three months instead of 12 months)

– Call-tracking lines

– Coupons or promotion codes

– Pay-per-click or pay-per-call campaigns

– Unique content specific to traffic source (e.g., a unique price point on a landing page)

Advanced Approach

– Tracking online activity:

• Unique tracking URLs
• E-mail lists and website registrations
• Contact request forms

– Bridging online activity with offline purchases:

• Call-tracking lines
• In-store pickup options
• Customer callback surveys

Taking simple steps, like those mentioned in the Beginner Approach, will undoubtedly help you make more informed decisions about your ad campaigns. As your analytics skills and resources become more advanced, your ability to interpret tracking data (and optimize campaigns accordingly) will advance, as well.

Analytics, in some form, are a must for all advertisers. Start simple, track the right metrics for your advertising goals and, above all, learn from your data and experiences.