Efficient Frontier Insights

Join Us for Our Social ROI Webinar - 2/28

What benefits does social marketing provide to businesses’ brand awareness and revenue?

While many discussions on social media cover concepts and strategies for success, very few of them actually provide insights backed by hard evidence to corroborate their hypotheses. Dr. Sid Shah, Director of Business Analytics at Efficient Frontier (now part of Adobe) will bridge this gap by outlining a more developed approach to truly measuring ROI in social while  providing real numbers and metrics from actual campaigns.

Register

Date:
Tuesday, February 28, 2012  

Time:
9:00 A.M. PST  /  5:00 P.M. GMT

Speaker:
Dr. Sid Shah, Director of Business Analytics – Adobe Systems
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Facebook’s IPO: The $100 Billion Question for Marketers

Now that Facebook has filed its IPO there is much speculation regarding its value and how being a public company will impact the social network for consumers and brands. While it is up to Wall Street to value the company’s true worth, we, as marketers, should look at some key Facebook trends to evaluate future Facebook monetization opportunities and what it means for brands.  

A look at some of the key trends:

Facebook is finally on every major brands marketing plan: While Facebook rapidly expanded its user base from the very beginning, it was relatively slow in gaining traction with advertisers. In 2011, that has changed. It was, from our perspective, a watershed year for Facebook – a time when the site went from being an experimental medium to a medium that appeared on every major marketer’s media plan.

Facebook ad spend continues to accelerate as marketers begin to understand social ROI: Our recent research shows that Facebook ad spend is nearly 3% of biddable online ad spend. However, we expect this number to increase to 5% of all online ad spend within a year, specifically in verticals such as retail where Facebook currently has a relatively small footprint.

The main reason for Facebook’s slow adoption in the retail category has been its perceived inability to show a direct response to marketers’ call for ROI. However, this will soon change.  Why?

 1 - Based on our client data, between 40-60% of all transactions that start on a Facebook ad end in a different channel. So, in a last-click world (which about 70% of retailers currently use), the ROI on Facebook campaigns looks poorer than it really is.

2 - We have seen glimpses of evidence that show that when brands interact with their fans, the offline store traffic increases. In other words, online interaction on Facebook seems to lead to more monetization offline.

3 - We have seen that consumers interacting with Facebook apps tend to buy products more frequently and of a higher value.

4 –Facebook has a massive data asset that only continues to grow. This is perhaps the most important component driving this change.

The bottom line is that the effect of Facebook on purchase behavior and revenue is often indirect and long-term. Today’s direct response metrics don’t capture these effects correctly and thus do not show proper revenue impact. The ability to measure the value of Facebook on direct response will change as more marketers implement marketing solutions that offer cross-channel measurement, analytics and optimization.

New ad formats that leverage the social element of Facebook will accelerate social ad spend: There are two features of social marketing that give it a significant advantage over any other channel:

1 - The social element. When a friend endorses a brand, product or a service there is a much higher propensity for others to buy or endorse it, as well. However, we believe that the social element is still underleveraged for marketers on Facebook. Apart from Sponsored Stories (which do remarkably well on Facebook), and reaching friends of fans, we have not seen new innovation in this area. We believe there is huge potential in making ads and apps even more inherently social so as to gain more free “earned media”.

2 - Facebook’s massive data asset is relatively untapped. The company has one of the richest sources of consumer data on the planet, but for understandable privacy reasons, it has not enabled marketers to leverage it. Yet, we believe that in due course innovation will emerge that balances privacy expectations and regulations with ways to provide marketers with rich data beneficial to industry and consumers. The innovation will come in the form of new ad formats, segmenting capabilities and advanced reporting.

Facebook will be the catalyst for a major media mix shift: Many analysts ask if Facebook budgets are eating into search and display budgets.  So far, it is not, and we believe that will continue to be the case. Facebook’s budgets have and will continue to come from TV and print. There are two reasons for this:

1 - Consumer’s behavior when they see ads on Facebook is a lot like when they see ads on TV. They initially respond well and strongly but when they see the same ads again the response rates drop significantly. The same applies to apps. Thus, the best-executed marketing strategies on both TV and Facebook have the following common elements – a short but intense campaign to maximize reach, frequency and word of mouth; a pulsed media buying strategy so consumers are not saturated with the same ads; and very strong, creative ads that encourage people to look, engage and interact with the brand.

2 - The other reason is the way in which people engage with different media. Many TV viewers are on Facebook simultaneously. We have seen this with some of the fan pages of TV shows that we manage – peak hours of engagement coincide with the times that the show is broadcast. So, if a brand wants to reach out to an audience of a particular show they should advertise on Facebook, too. This is unlike search where the core purpose is to find a product in the most efficient way possible and then get off the search engine’s ecosystem.

What does this means for marketers? Facebook’s IPO will increase pressure on the company to monetize its traffic much more efficiently. One should expect to see new ad formats and targeting capabilities being released. Additionally, one can also expect to see increased ad buying on the channels as more marketers look at social ROI through a broader and, in our opinion, more correct lens. Finally, expect to see more coordinated TV and Facebook campaigns as well as a shift of media dollars away from TV and print to Facebook.

 

Dr. Siddharth Shah
Director, Business Analytics
Adobe

 

Efficient Frontier poursuit son développement et nomme Johan Benoualid au poste de Directeur Commercial pour l’Europe du Sud

  TRANSLATE: Efficient Frontier, leader du marketing digital et une filiale d’Adobe, vient d’annoncer la nomination de Johan Benoualid comme Directeur Commercial Europe du Sud afin de soutenir son développement sur La France, le Benelux, l’Italie et l’Espagne. 

Après une forte croissance au Royaume-Uni et en Allemagne, Efficient Frontier part à l’assaut de la France et l’Europe du Sud. En prenant la direction sur l’Europe du Sud, Johan Benoualid aura pour rôle de développer Efficient Frontier, première plateforme unifiée de gestion des performances, qui propose une optimisation à travers les principaux canaux du marketing digital : le Search, le Display et Facebook.

Avec le rachat d’Efficient Frontier par le groupe Adobe, la nomination de Johan Benoualid constitue une opportunité forte pour Efficient Frontier d’accélérer son développement sur le marché français. Johan pourra ainsi s’appuyer sur les trois principaux métiers d’Efficient Frontier pour accompagner les annonceurs français sur l’ensemble des canaux digitaux : Search marketing et l’optimisation d’achat de mots clés, la Social Marketing Suite, un outil proposant la gestion optimisée de la présence des marques sur les réseaux sociaux et la gestion des communautés Facebook, et la plateforme de display permettant de maitriser sa performance et d’accéder aux différents ad-exchanges.

Depuis septembre 2008, Johan Benoualid occupait le poste de Directeur Commercial d’Acxiom France. Au cours de ces trois années, il a assuré la transition du groupe vers les activités de conseil en marketing interactif et développé les activités digitales. Johan Benoualid a  rejoint Acxiom fin 2005 au poste d’ingénieur d’affaires, puis a été nommé en 2007 Directeur Commercial du pôle grands comptes.

Johan Benoualid a débuté sa carrière professionnelle en 2000 en intégrant le groupe Dun and Bradstreet puis avait rejoint Selligent en 2004, pour occuper un poste d’Ingénieur d’Affaires sur l’Europe du sud.

Johan Benoualid est âgé de 36 ans et est diplômé d’un Master en « Stratégie commerciale et Politique de Négociation »

Efficient Frontier continues to grow and names Johan Benoualid as Sales Director, Southern Europe

 Efficient Frontier, a digital marketing leader and an Adobe company, has just announced the appointment of Johan Benoualid as Sales Director for Southern Europe to support the growth of the company in France, Benelux, Italy and Spain.

After strong growth in the UK and Germany, Efficient Frontier is now invading the rest of the continent, starting with France and Southern Europe. As a manager for this region, Johan Benoualid will be in charge of developing the Efficient Frontier offering, the first unified performance management platform to offer optimisation of the main digital channels: Search, Display and Facebook.

After Efficient Frontier’s acquisition by Adobe, the appointment of Johan is a strong opportunity for the company to speed up its development in France. He will be able to rely on Efficient Frontier’s three core digital activities for French advertisers: Search marketing and keyword optimisation, the Social Marketing Suite, an optimised tool to manage a brand presence on social networks and communities on Facebook, and the Display platform to allow for a better performance management and access to different ad-exchanges.

Since September 2008, Johan Benoualid was Sales Director at Acxiom France. During three years, he managed the transition of the group towards interactive marketing services and developed the digital activities. He joined Acxiom in 2005 as Sales Engineer and was named Key Account Manager in 2007.

Johan Benoualid started his career in 2000 at Dun and Bradstreet and then joined Selligent in 2004 as Sales Engineer for Southern Europe.

Johan Benoualid, 36, has a Master in “Sales strategy and negotiation policy”.

Join us for ‘Social Media Metrics: Measuring the Value to your Business’ at SES Accelerator

Dr. Sid Shah will be speaking on ‘Social Media Metrics: Measuring the Value to your Business’ at SES Accelerator, San Diego, this Thursday Feb 9^th.  While many discussions on social metrics cover concepts and strategies few of them provide insights with hard evidence to corroborate their hypotheses. Sid will aim to cover this gap by not only outlining a more developed concept of social ROI and related metrics, but also providing real numbers and metrics from actual campaigns to illustrate the benefit that social marketing provides to businesses in terms of awareness and revenue.  Reach out to Sid before and after his talk by commenting on this blog post to ask him more on this interesting topic.

 

 

 

The Rise of Social ROI, the Decline of Offline Media and the Age of the Math Men

A lot of heads turned when P&G, one of the world’s largest advertisers with a marketing budget of $10 billion annually, announced the layoff of 1,600 marketing people. Bob McDonald, CEO of P&G, said, “In the digital space, with things like Facebook and Google and others, we find that return on investment of the advertising when properly designed, when the big idea is there, can be much more efficient.”  He also cited the Old Spice campaign as an example of a highly cost effective and successful campaign.

Given the current debate over social ROI, we find his statements very interesting and worth exploring.  The following themes emerge when one considers the layoffs in a broader perspective:

Social ROI is more than direct response:  Part of the reason some marketers contend that social media is not effective is because they view it from solely a direct response lens. For better or for worse, the search engines have spoiled us into thinking that because one can measure metrics in online marketing, it can be held fully accountable in terms of profit and loss in a very short time interval (even a day).  Further, as many direct response marketers start to manage Facebook campaigns they view them with this same lens and quickly come to the conclusion that their campaigns are not effective.

However, this is a very narrow perspective and often misses the bigger picture. Brand marketers like P&G and Coca Cola have known for decades that reaching out directly to audiences builds loyalty and a propensity to buy their products over time. Measurement of the efficacy of these campaigns is tricky and requires patience. However, in the case of social media the ROI can be measured if done right. For the brands that we manage we have seen anecdotal evidence showing when brands interact with their fans they see increased offline store sales. We have also seen evidence of the average order value of products being higher for consumers who have interacted with a brand’s Facebook app.  While the evidence is preliminary, we remain fairly confident that this is part of a broader hypothesis - one that makes both intuitive and mathematical sense. When you reach out to consumers in a meaningful way they are more likely to buy your product.

People are moving away from offline to online media:  Media consumption is moving away from print and TV to online. This should come as no surprise to anyone. Facebook is not only seeing fan growth, but the average fan is spending more time on Facebook. YouTube, Hulu and related sites are also seeing increased usage. The obvious conclusion is to move media dollars away from offline to online sources. This share shift is well underway.

There is also one more key implication. As the media dollars move online, advertisers will be able to gather more data than ever on the efficacy of their campaigns. Not just search, social and mobile, but also video. The smarter platforms will then provide marketers with sophisticated media buying options such as segmentation, real-time auctioning of media spots, demographic information, and cross channel insights to help marketers. These developments will only make media buying more effective.

The age of the Math Men: Chris Moore from Redpoint Ventures recently wrote that we live in the era of the Math Men. I couldn’t agree more. With the sheer volume of data that marketers are being bombarded with, there is an urgent need for statisticians, scientists and analysts to be able to crunch the data, come up with meaningful insights and action them in near real-time. This would be impossible were it not for sophisticated algorithms that do a lot of the heavy lifting to ease the burden on the marketing manager.  Does this mean the death or creativity in marketing?  Of course not. In fact, I would say that there is more need than ever for creative folks. There are two reasons for this: (1) Most non-math folk don’t realize this, but algorithm development is an extremely creative process (take it from a guy who wrote algorithms for years). Finding the right mathematical parameters and then fusing it with business insights can make all the difference between an algorithm that closes your business or one that drives ROI at scale. (2) Algorithms and math can drive your marketing campaign to optimal performance, but it can’t create an interesting and compelling campaign for you. In other words, an algorithm could have found the best way to advertise the Old Spice campaign on Facebook, but it still needed some very creative people to come up with the concept and then execute it. One should view math and algorithmic technologies as extremely effective productivity tools that free time for us to do even more creative marketing.

I see P&G’s shift in focus as part of a broader trend – a shift in media mix from a less measureable offline world to a more measureable, but fragmented online world where integrated tracking, measurement and optimization technologies are vital. We are ready!

Dr Siddharth shah
Director, Business Analytics
Adobe