Efficient Frontier Insights

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

2012-02-07T10:43:21-08:00

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

2012-02-03T10:44:37-08:00

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

Webinar Series: Google+: The Convergence of Search and Social

2012-01-26T12:21:09-08:00

Our webinar series has covered interesting topics and received great participation, but this week’s webinar, “Google+: The Convergence of Search and Social” had such great attendance, interaction and follow up requests that we had to share. The topic is obviously very timely given Google+’s recent entry into the social mix for brands and their recent announcements around Google account management. As a leader in search and a partner of Google’s for Google+ brand page publishing and moderation, we have incredible insight into how to leverage it as search and social converge.

Some of the attendees shared this feedback with us:

“You guys did a great job covering the super important things and cutting out the fat. Thank you for that!”
- SEO Specialist, Digital media company

“Really outstanding job on this! It was both informative and engaging. It kept my interest throughout while likely appealing to a large audience with vastly different amounts of knowledge regarding Google +. Probably the best webinar I've attended over the past year.”
- SEM Manager, Automotive marketing company

It’s a must listen-to for anyone in search or social marketing who wants to better understand Google+ and its impact on search. Listen to the replay and get the presentation here.

Adobe Completes Acquisition of Efficient Frontier

2012-01-15T21:13:23-08:00

Today, Adobe solutions are central to how digital marketing and advertising are created, managed, executed, measured and optimized. Our focus on market leadership in the digital marketing space has driven some dramatic changes at Adobe including the recent acquisition of Efficient Frontier, a leader in multi-channel and auction-based digital advertising optimization across search, display and social media.

With Efficient Frontier, Adobe delivers an industry-leading independent platform for digital ad buying to our customers. With this addition to our Digital Marketing Suite, we offer a more powerful solution for managing search, display and social media to better answer the needs of our customers.

The several key areas of technology and expertise Efficient Frontier brings to Adobe’s Digital Marketing Suite include; 1) leading portfolio optimization algorithms and platform for paid search, 2) real-time bidding technology for display advertising that is placing millions of dollars of bids today, 3) Context Optional, a social engagement platform that Efficient Frontier recently purchased that is managing content for major brands on both Facebook and Google+, and 4) the ability to forecast future returns and model media mix options to drive business results from multi-channel campaigns. These additions to our already strong offerings significantly advance our capabilities in the market and, in many cases, accelerate our existing roadmap to give our enterprise and agency customers new ways to manage digital marketing.

What this means for both Adobe and Efficient Frontier customers - the marketers behind some of the world’s largest brands - is new and better ways to understand, and make impactful business decisions around digital ad buying. Both Efficient Frontier and Adobe customers are making tremendous investments in advertising and must make complicated and real-time decisions about where, when and through which channels they will place ads. They have to take into account fundamental changes as ad budgets continue to shift rapidly to digital channels, which are projected to be 35% of ad spend in 2016 according to Forrester Research.

We understand that the marketer is on the hook to report back to the CEO on return-on-investment and lessons learned from their choices and allocation of resources whether it’s in advertising, or any other marketing campaign. This is no small task. Our customers trust and expect Adobe to be the strategic partner to help them exceed their business goals. With Efficient Frontier, we continue to make customer-driven business decisions as we build a powerful and comprehensive digital marketing platform to drive business impact through the marketing department.

Through our acquisition of Efficient Frontier and our recently announced acquisition of Auditude, a video ad management leader, Adobe continues to build a formidable technology stack for streamlining processes and uncovering actionable insights to drive real business results. As a result, Adobe customers have more power to optimize multi-channel advertising spend, giving them the means to place the right ads and offers at the right time and place, and then identify high performing campaigns to replicate for best business results. Adobe’s Digital Media and Digital Marketing platforms continue to intersect with these recent acquisitions, providing increased value for our customers.

The completion of Adobe’s acquisition of Efficient Frontier is great news for both businesses, for our customers and for a fast-growing industry in need of breakaway leadership. With it, Adobe is poised to win.

- Brad Rencher, SVP & GM, Digital Marketing

- David Karnstedt, GM, Advertising for Digital Marketing

Efficient Frontier & Context Optional release joint State of Digital Marketing Report for Q4 2011

2012-01-13T07:44:55-08:00

Today, we release our highly anticipated quarterly State of Digital Marketing Report for Q4 2011, now in partnership with Context Optional. These joint reports – with Efficient Frontier’s robust data in the digital marketing industry and valuable insights from the Context Optional customer index – have been an incredible resource for current industry trends and future outlooks. This quarter, we saw some interesting and some expected trends. Search spend significantly increased, particularly among retailers, with the holiday season dominating the quarter. In social, Facebook spend share reached 2.7% of biddable online advertising spend in Q4. Increases in social spend are coming from new ad budgets rather than subtracting from existing search or display budgets, demonstrating the growth and importance to digital marketers of search, display and social throughout 2011. Brands continued to acquire fans at a 9% rate per month.

Other key highlights in the Q4 report:

SEARCH SPEND increases 14% YoY in the United States and 19% YoY in the UK as retailers spent aggressively in Q4. US spend in retail grew by 18% YoY and 40% QoQ and UK retail spend grew by 10% YoY. This indicates a consistent seasonal ramp up in Q4 and resulted in a strong fourth quarter overall. Retail ROI YoY remained steady.

GOOGLE MAINTAINS 80% SPEND SHARE in Q4. Yahoo/Bing clicks yielded 14% more revenue per click (RPC) than Google while also having 9% more Return on Investment (ROI) than Google. Yet, Google increased click share by 2.5% YoY indicating the necessity for volume and reach from advertisers, primarily retailers, in Q4.

MOBILE SPEND specifically tablets, is becoming increasingly important for marketers as tablets accounted for 50% of mobile search spend and 50% of click share.

GOOGLE assumed 96% of mobile search ads. Yahoo/Bing accounted for just 4% of mobile ads.

DISPLAY SPEND remained flat QoQ. However, Google’s Doubleclick increased exchange display market share by 19% YoY. Due to both inventory constraints and shifting strategies by Yahoo for their Right Media Exchange, Google extended significant share gains in biddable display.

EUROPEAN MARKETS showed strong growth in search spend YoY. France increased search spend 70% YoY and Germany 47% YoY indicating heavier investments into online advertising in 2011. The UK lead the online marketing industry in Europe and continued to increase search spend 19% YoY.

To get the full story, download our State of Digital Marketing Report for Q4 2011.

- Siddharth Shah
Senior Director, Business Analytics, Efficient Frontier