11 Jan The revolution of referrals
The results are surprising: the model for attributing value to the various digital channels followed by marketing managers was elaborated before the birth of social media, which leads them to grossly underestimate the incidence of social media in generating sales and revenue online.
Social media ROI.
In particular, it’s the universally applied so-called “last-click” attribution model that is blamed by Adobe researchers. In fact, this model leads us to point out the digital channel (website, ad banner, advertising search, email, social media profile, etc.) that has generated the last visit, the one thanks to which the user made a purchase or visited the company’s site. Effectively elaborated to measure the value of email marketing, search marketing and other digital tools with a direct user response, this model however does not take into consideration the role of websites that first brought the user to become interested in the company’s brand or promotion, i.e. sites that are capable of generating brand awareness, word of mouth, and curiosity. Therefore, if we turn the perspective on its head and apply a “first-click” attribution model, seeking to measure the value generated by sites in which users first came into contact with the company, the weights and values attributed to the various channels can be very different indeed.
In particular, we discover that the average value generated by a visitor through social media is not 0.6 dollars, but 1.13, that is 88% more. The difference in value attributed by the two models rises even more if we look at individual social media sites: e.g. the value of YouTube rises 314%, Twitter by 372%, Facebook by 91%, and for the Tumblr blog platform by as much as 785%. Looking at the results divided by business product categories, we discover that YouTube is underestimated by 7,047% in the travel sector, whereas for the retail sector Tumblr is underestimated by 785%.
Using the first-click attribution model, we can also assess the effects of social media sites with respect to a combination of overall digital tools in generating revenues. Comparing the economic value generated by an advertising search engine, the tool businesses invest in the most, and the value generated by social media, we discover that the difference drops from 363% to 241% in the retail sector, and from 424% to 252% for the travel sector.
These figures should lead marketing managers to more seriously consider social media sites, also because in assessing strictly quantitative ROI, which measure useful clicks per purchases, a whole range of effects generated by social media sites are disregarded, such as brand awareness, customer loyalty, and consumer engagement in conversations on social platforms that create value for businesses.
The last-click model is blame?“