Searching for the ROI of Engagement Marketing

Ad:tech is in full swing in New York and ‘engagement marketing’ has been the buzz term on everybody’s lips. Marketers everywhere are getting excited about leveraging the increased time people are spending online, to keep eyeballs glued to their sites and interacting with their brands. This revolves around the intrinsic belief that the more time people spend with you, the more they are going to get to know you and more likely they are to pay for an association. But the stumbling block remains finding the elusive secret formula to show, in hard figures, how increased engagement leads to increased sales.

The internet is creating a shift in advertising from an interruption based marketplace to one which is permission based. There is going to have to be a parallel shift in thinking before many traditional advertisers are happy to plough funds into something which doesn’t guarantee a quantifiable conversion in sales. It is very difficult to drive investment in online branding exercises when they have only the ambiguous measure of ‘engagement’ as the yardstick for success.

The drive to utilise the growth in popularity of interactive websites is gathering steam all the time. But as any marketer will tell you, “you cant monetise what you can’t measure.” There is mass confusion in the industry in understanding the ROI of engagement marketing; this isn’t going to change until a methodology, or metrics, have been developed to identify what its formula is.

The general consensus seems to be that the number of different ways in which people can interact with websites (bookmarks, subscribing, commenting, voting etc) means that no ROI formula can ever be the same for every website. Engagement marketing will have to mature for a while before we are able to understand how it influences people’s buying decisions. Even then the models involved are going to be more complex, and include more factors, than any we use at the moment.

In a recent podcast, Joseph Jaffe (a leading new marketing guru) and Max Kalehoff (Nielsen Buzz Metrics) discussed how ‘the traditional reach, frequency, impression models are working less and less,’ and a new ‘hybrid’ of metrics had to be created. Joseph elaborated that we shouldn’t even try to fit engagement marketing into the same cast iron rules that have served advertisers for so long. But instead accept its complexity as a reflection of the range of behaviours people can exhibit in online social networks.

Simply using the old methodology of measuring the responses to calls to action, such as signing up for a newsletter, no longer provides enough scope to cover all the different ways in how people can interact with a website’s content.

This view is reinforced in a post by Anthony Mayfield, a UK PR consultant, in response to a Wiredset article. We shouldn’t be trying to simplify engagement with traditional measurement models, but instead embrace new complex ways of trying to understand its ROI. He comments that, “media and marketing communicators need to develop a new world view, one which embraces complexity as a defining characteristic of our communications environment.”

As marketers continue to grapple with the formulae for measuring engagement’s ROI, the race is on to provide the software solution for measuring the equation’s components.

Hubspot’s website analytics software takes the old marketing and sales funnel, extends it and then bolts engagement stats onto the side. By measuring and tracking subscribers, visitors, commentators, etc they aim to be able to pinpoint where visitors are in the sales process. The principle is that interaction helps push prospects further down the funnel and that it can be identified when they are ready to receive their first sales call.

Software solutions, such as Hubspot’s, are already in the pipeline, and it will just take time for advertising industries to understand how consumer engagement translates into sales. Once this has happened, and software metrics have become corroborated with marketers’ formulas, then the march of engagement marketing could become irrepressible, and mark the next chapter in advertising’s evolution.

10 thoughts on “Searching for the ROI of Engagement Marketing

  1. Great post…haven’t read it all, but I will when I get back to my PC (on the road again…)

    Your diagram looks very interesting. Can you e-mail me a higher res version to review?


  2. Hi Joseph,

    I’ve increased the image size so it should be clearer now. Otherwise you can see the original here: and you might find the article of interest as well.

    I’m a big fan of your podcast by the way – it certainly helps crystalize what a lot of people are discussing at the moment.


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