The value of an ad interaction in the social-media space has been somewhat of a mystery. While most suspect the highly engaging environment might be a good place to reach consumers, there are also questions about ad receptiveness on personal pages -- there's no ready-made means of measurement because it's a new channel.
Two case studies
The study, which was fielded in fourth quarter last year and first quarter this year, involved case studies from two Carat clients, Adidas and Electronic Arts. It looked at three different types of ad interactions available through MySpace: display ads, custom marketer MySpace pages, and branded profile skins and features consumers can use on their personal pages. It also measured lift in four traditional ROI metrics: intent to purchase, positive brand image, intent to recommend and unaided awareness.
"We wanted to get marketers away from the idea of friends-as-the-new-click-through-rate as a measure of success," said Heidi Browning, senior VP-client solutions at FIM. Instead, the company hoped to coin a new metric to represent the value of the viral effect of users plugging brand assets into their MySpace pages. "This is the first study to say there is a value associated beyond the media investment [because of] the viral capabilities that social networking enables," she said.
The move is also an attempt to prove the value of social-network marketing and close the monetization gap between MySpace's massive number of page views and the revenue it brings in. Most analysts suggest MySpace will bring in somewhere between $200 million to $300 million this year in advertising, while Yahoo, a company with comparable page views, is expected to generate about $5 billion in 2007.
Where the value lies
Rex Briggs, CEO of Marketing Evolution, which conducted the study and has also looked into social-networking ROI for marketers such as Procter & Gamble, said he hypothesized there would be value in the way people pass information around social networks, but the value would be created because people would be led back to custom brand communities or profile pages. That's how it worked in a study Mr. Briggs conducted for Phillips' "Shave Everywhere" campaign.
"As it turns out, there is value created there, but that's not where the majority of the value is," he said. "It's when I take the brand, put it on my profile page and then all the people would develop a deeper meaning for what Adidas stands for because of where it stands in my own personal story."
Mr. Briggs credited that effect to some work on engagement done by Joe Plummer of the Advertising Research Foundation, which says advertising and marketing is a co-creation process in which a brand can have a meaning it wants to convey through advertising, but consumers create that meaning when they see the brand in a context that generates meaning.
In the study, Adidas created custom skins for MySpace pages based on a new soccer cleat it was marketing. EA ran a contest on MySpace that pitted bands against each other for the opportunity to have a song appear in a new video game. In the case of EA, 70% of the people who said they'd buy the game (intent to purchase) were influenced by the viral elements or recommendations from friends.
The return was so high, there was discussion that perhaps it might represent a high-water mark, Mr. Briggs said. When asked whether it skewed high because both brands are very youth-oriented, he said additional studies may be needed for older-skewing brands.
The tricky part is that just being present in the social-networking space won't be enough to capture the momentum effect. Mr. Briggs noticed three attributes of the campaigns that attracted people: They gave consumers a way tell their own stories using the brand as a reference point; they gave people something to talk about; and they gave people opportunities to realize their dreams or fantasies through components such as sweepstakes and contests.
"If you're tapping into something that's core and central, how people feel on their private side, that could give you a hook for getting into the social network," Mr. Briggs said.
'The rewards are outsize'
Michael Barrett, chief revenue officer at Fox Interactive, said the study also addresses scalability for marketers on MySpace. "The ROI on this type of investment is certainly very rich, and marketers, after seeing these studies, will never question again, 'Boy, that's a lot of effort and resources to put into a campaign,' because the rewards are outsize," he said.
For straight media campaigns that involve roadblock-type executions (where an advertiser blankets a site), MySpace performs as well as the portals in many cases, Mr. Barrett said, but MySpace hasn't stood up to portal offerings when it comes to modest campaigns because Fox lacked the targeting tools to make it happen. A recent acquisition of internet-advertising-technology firm SDC, which will help Fox target inventory, should change that.
"We are making a big investment in ad-targeting capabilities. Coming out in late second quarter, we'll be breaking out lifestyle segments such as travel enthusiasts, auto enthusiasts," Mr. Barrett said. "In early Q4, we'll be able to deliver targeting above and beyond what you can get from portals. And that changes everything."