Spur Digital: Interactive Engagement and Metrics

Interactive Engagement and Metrics

By Steve Latham, CEO of Spur Digital
January 2007

The term “engagement” is quickly becoming both a hot buzzword and an important metric for measuring ROI from online marketing efforts. Engagement is somewhat unique to interactive marketing as it spans the bridge between branding and direct response campaigns.

As most know, branding is about driving awareness and establishing an image for a product or company in the mind of one’s target audience. Branding is important (name a market leader that doesn’t have a strong brand), but hard to measure from an ROI perspective.

On the other hand, direct response is all about generating immediate results. Direct mail, infomercials and “On Sale – Act Now!” ads are intended to drive an action that can be measured (brand awareness that comes from the ad is incidental). Branding strategies and direct response strategies are generally very distinct and have very little overlap… at least until interactive marketing gained critical mass.

The advent of Interactive Marketing introduced the concept of Engagement. While branding is about impressions and direct response is about sales, engagement is what happens in between the initial impression and the sale.

Engagement is still a relatively new term and there are several definitions. Earlier this year the Advertising Research Foundation officially defined engagement as "turning on a prospect to a brand idea enhanced by the surrounding context." 24/7 Real Media defines engagement in three ways: the advertising a consumer sees; the content a consumer views; and any commerce and transactions a consumer has with a brand.

I define engagement as the interaction between people and brands that shapes the way people think and feel about the brand. When we think of the proverbial sales funnel, there is a lot that happens between the top (where a prospect enters the funnel) and when it converts to a sale. Engagement is what connects awareness with intent and action.

What’s interesting about online Engagement is that it must be initiated by the consumer. One can’t make a consumer engage a brand; they must choose to do it when, how and in the manner and frequency they decide is best for them. They decide how long they engage a brand, how much they wish to learn, and what to do with that information. Engagement is what happens inside the proverbial sales funnel that links awareness with intent and ultimately with action. Consequently, engagement must be measured to better understand customer preferences and behavior.

Measuring engagement is not easy and there is no universally accepted method for how it must be done. The World Federation of Advertisers (WFA) identified the need for a standard measurement but as industry experts have noted, no cookie-cutter solution will fit every situation. Each situation is different and each requires a unique approach.

While most marketers understand the concept of engagement and realize its importance, few understand how to measure it. Most ROI-driven marketers tend to focus on the bottom line: sales, registrations, requests and other forms of action. While measuring the end result is important, conversions alone won’t tell you the entire story. If only sales are measured, there is no record of what happened on the way to the sales counter. And if a company doesn’t know how well it is engaging visitors, or whether it is doing better or worse than the prior month, it can’t optimize its process and improve ROI.

The right metric for measuring engagement depends on the campaign objectives, target audience, creative, media and desired interaction. While there is no silver-bullet, there are some standard metrics that can be used to create a formula for measuring engagement, including:

Exposure and response to ads (Clicks or interactions with the ad unit
Exposure to Web site (visits, page views, most frequently viewed pages)
Visiting behavior (returning visitors, visit frequency, pages viewed per visit)
Visitor Actions (transactions, inquiries, etc.)

The metrics that should be used for a given program or campaign may vary based on the issues mentioned above. While the following example won’t apply to every marketer, it does represent one way engagement can be measured to better understand customer interaction and the impact of online advertising on sales.

Case Study: Tyrell Inc.

The Challenge
Tyrell, Inc. is the Houston-based maker of the award-winning “Zeno” skin clearing device, a revolutionary instrument that uses heat to kill bacteria that causes pimples. Recognizing that the Web is critical for marketing a new and innovative product, Tyrell turned to Spur Digital to lead the effort of optimizing the use of the Web to market and sell this blockbuster consumer product. Spur’s challenge was to measure and analyze visitor behavior as a means to understanding consumer preferences and optimizing brand engagement.

The Solution
Zeno is marketed through multiple channels including thousands of physicians, high-end retailers such as Nordstrom and, as of late, every Walgreens in the country. Like many innovative products, Zeno has generated a lot of awareness including appearances on Good Morning America, Today, Ellen and the Tyra Banks show, which has translated into online traffic at www.MyZeno.com.

The site has 5 primary objectives:

To educate consumers on what causes of acne and to demonstrate how Zeno works to eliminate pimples.
To help consumers find a licensed Zeno physician in their area. This is achieved through a proprietary Doctor locator on MyZeno.com.
To help consumers find retailers and e-tailers that sell Zeno.
To sell Zeno directly to consumers.
To build Zeno’s opt-in email database.

With the goal of optimizing sales and maximizing ROI from its advertising dollars (both online and offline), Spur Digital monitors and analyzes traffic and sales on a daily basis.

Spur recognized that measuring only visits and sales would merely scratch the surface in terms of understanding online engagement. To develop a deeper understanding, Spur mined a deeper and broader set of data from its proprietary web analytics platform to analyze consumer preferences and the correlation of online sales to web-based advertising. From this analysis, several interesting insights emerged:

Most purchases take place on repeat visits. Among online purchases, only 1 in 3 purchases took place during the visitor’s first visit. Most purchases take place during visits 2-6, with some sales taking place on subsequent visits.
Repeat visitors often rely on search engines vs. bookmarks. One would assume that after visiting MyZeno.com, most would simply type in the URL to return to the site. The data tells a different story: 50% of those making their second visit and 40% of those making their third visit to MyZeno.com used a search engine to find their way back to the site. Search is a powerful channel, even after the initial visit.
Consumers do a lot of research before making a purchase. The average visitor views 6.5 pages and stays more than 5 minutes per visit. We also found a significant percentage sign up to receive Tyrell’s newsletter. Together, these facts provided a strong indication that educational content (about Zeno, how it works, testimonials, FDA test results) is an important component of the purchasing cycle.
There is a two-week lag between advertising and sales. After we learned that the majority of sales take place during visits #2-6, we analyzed the purchase data and found there was a two-week lag between the initial visit from an online ad, and the online purchase of the product. The two-week lag correlation (0.90) provided valuable insight into consumer buying cycles and is now being used for media planning and forecasting.

In the case of Zeno, measuring engagement provided valuable insight into how customers interact with Tyrell and the keys to optimizing sales and ROI. We can also track changes over time in order to assess the impact of site changes and new campaigns while increasing our understanding of customer behavior.

While measuring engagement isn’t painless, it can provide valuable insight into new ways of optimizing ROI from marketing dollars. To learn more about engagement and metrics for measuring it, visit www.SpurDigital.com.

Steve Latham is the CEO of Spur Digital (www.SpurDigital.com) and the founding President of the Houston Interactive Marketing Association (www.HoustonIMA.org). An expert in online marketing and advertising, Steve has planned and managed online marketing campaigns for FedEx Kinko’s, Southwest Airlines, Tyrell, Inc., the Houston Museum of Natural Science and Amegy Bank, to name a few.