Reach and frequency should be dead.
Many advertisers still ask about reach and frequency of their online campaigns as if they were traditional media. They may even state it as their campaign goal, or decide not to do a particular campaign because it doesn't give them enough reach and frequency. But while the online channel can deliver massive reach, the sites that these audiences visit and the topics they are interested in are becoming ever more niche. More specifically, Facebook may have a massive total audience that goes there very frequently, but most advertisers are smart enough not to do a run-of-site campaign. Instead, they will target by demographics, behaviors, or interests, all of which yields far more niche audiences than the site itself. As a proxy for interest, even the most popular Facebook applications are used by a fraction of the entire Facebook audience (Facebook changed from reporting daily-active users to estimated monthly-active users, because of how infrequently users actually used applications despite having them installed.) So, the audiences of interest groups on Facebook and niche sites like fishingclub.com are like the audiences of television shows of old, which were used by advertisers to target ads.
As targeting gets more sophisticated online, the resulting target audience gets smaller (see "Beyond Targeting in the Age of the Modern Consumer"). The television medium itself has been fragmented into hundreds of niche cable channels, each delivering a small, finite audience that shares a common interest -- better for targeting, but not for reach and frequency. Even prime-time network television shows deliver far smaller audiences than they once did. In the "golden age" of one-way, mass media increasing reach and frequency could be correlated to increasing sales. That golden age has passed. Today, the playing field is far more complex, the consumer is far more informed and demanding, and the amount of information one can use for research is vaster and always available. Modern consumers rely on their own research and the recommendations of people like them to make purchase decisions. So, hitting more people more frequently with ads does not necessarily translate to more sales.
Online Metrics as a Proxy for Campaign Success?
Some marketers have started to use online metrics as key performance indicators (KPIs). Metrics such as banner ad impressions, unique visitors to a site, page views, or time-on-site are now often used as campaign goals. These metrics may be sufficient to indicate success of marketing campaigns but there's only a loose correlation to sales, at best. For example, ads on Facebook may get hundreds of millions of impressions, simply because when friends socialize with friends, they load a whole bunch of pages; but no one knows for sure whether anyone even saw the ad, recalled it, or acted upon it, let alone made a purchase because of it. Unique visitors and page views on a Web site may be useful -- at least the user arrived on the advertiser's Web site -- but people coming to the site may have come but not found what they were looking for, came and left because it wasn't what they were expecting, or came to do research only. And time-on-site may be one of the most notoriously bad indicators of campaign success because someone spending more time on the site may simply be watching more videos (not viewing your ad) or someone spending less time on site may be because they easily found the information they were looking for through site search. Neither has much to do with whether the campaign was successful or whether a sale is likely as a result of the campaign.
What Metrics Should Marketers Pay Attention to Today?
Two metrics that may be better at indicating campaign success are: search volume and "social intensity" (define). Notice both require that the targeted person take action.
Take, for example, the spike in search volume around Denny's right after its Super Bowl ads were aired. People saw the ad, recalled it, and took action -- performed a search for "Denny's free breakfast" -- and probably went to Denny's. However, even this metric shows how ephemeral the effect of advertising truly is. For example, on February 1, the day of Super Bowl XLIII, 20 of the top 100 Google searches related to ads aired during the game. On day two, it dropped to 6 out of 100. On day three, 1 out of 100. By Day four, February 4, none of the top 100 Google searches related to the ads or the advertisers.
A different metric to consider: social intensity, which represents the rate at which social actions occur such as rating, sharing, blogging, recommending, commenting, etc. Some brands have nearly zero social intensity -- no one blogs about them, no one shares information, etc. While other brands -- like Apple -- enjoy continuous, relatively high social intensity.
Social intensity reflects the actions taken by targeted customers based on their knowledge of the brand, message, or product -- they couldn't rate, share, comment, etc. if they didn't understand the product, or at least have an opinion about it. Compare the metric of social intensity to the metrics of impressions served. There may have been massive quantities of impressions (some consider it equivalent to reach); but no one knows whether the targeted person ever even saw the ad.
Compare social intensity to unique visitors -- which means users arrived at the advertiser's site, but not whether they liked the site or found what they were looking for. When a person takes a social action -- e.g., shares something with a friend, she not only knows enough about what she is sharing, but she also knows enough about what her friend needs, and most importantly that that bit of information will be what her friend needs.
Social intensity should also have a better, more direct correlation to sales and ROI (define) than the other oft-used metrics.
Compare for example:
The former was costly (paid media); the latter is free (social action). The former was advertising (which is ignored by modern users); the latter is a recommendation from a friend. The former ended with the person arriving on a Web page (unique visitor); the latter could even include a recommendation to purchase a specific product and why. So, comparing former to latter, which do you think is a better indicator of sales and ROI?
Tips for Measuring Digital Marketing Activities
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Dr. Augustine Fou is the senior digital strategy advisor to CMOs, marketing executives, and global brands. Dr. Fou has over 15 years of Internet strategy consulting experience and is an expert in social media marketing strategy, data/analytics, and consumer insights, with specific knowledge in the consumer packaged goods, financial services/credit cards, food/beverage, retail/apparel, and pharmaceutical/healthcare sectors.
He is a frequent panelist, moderator, and keynote speaker at industry conferences. Dr. Fou is also an Adjunct Professor at NYU in the School for Continuing and Professional Studies and at Rutgers University at the Center for Management Development, where he teaches executive courses on digital strategy and integrated marketing.
Dr. Fou completed his PhD at MIT at the age of 23. He started his career with McKinsey & Company and previously served as SVP, digital strategy lead, McCann/MRM Worldwide and group chief digital officer of Omnicom's Healthcare Consultancy Group (HCG). He writes a blog "Rants, Raves about Digital Marketing" and can be found on Twitter at @acfou.
March 19, 2014