5 Steps To Measure The ROI Of Digital Media Channels

Are you measuring the interplay and overall performance of your combined paid, earned, and owned digital media channels? Here’s a 5-step process to discover which elements are driving the most value.

5 Steps To Measure The ROI Of Digital Media Channels


Many marketers have worked hard in 2011 to develop appropriately customized ROI measures for social media. I have dedicated a few previous posts on how to approach these measures. 

As we move into 2012, I would like to raise a key question of measurement that isn’t consistently addressed but is of critical importance. That is: How are you measuring the interplay and overall performance of your combined paid, earned, and owned digital media channels? How do you know which elements are driving the most value? 

Most marketers are starting to understand that the most effective digital communication plans seamlessly integrate content across paid, earned, and owned media channels. As a quick reminder, paid media includes display ads, sponsorships, and paid search. Earned media is largely social in nature. Owned media is represented by content such as your brand website and native apps.  

As marketers continue to build out ever more complex digital ecosystems, understanding how all elements, individually and in unison, are contributing to overall success is a cost of entry for effective optimization. 

It is encouraging to see marketers recognize the need to create campaigns with content that is tailored for each of these unique channels. Creating a campaign concept that has “legs” for the diverse channels of paid, earned, and owned is no easy task. And neither is the process of effectively coordinating efforts across these channels. Where the trouble lies is that holistic performance measurement has been left behind. 


We are measuring vast quantities of discrete elements within these channels. However, these measures typically exist within their own silo and can’t be compared to other parts of the ecosystem. 

For example, many social-media measures are concerned with the number of fans, likes, and the amount of user-generated content.  Search measures are concerned with click-through and keyword attribution while brand site measures may focus on e-commerce, bounce rates, or engagement scores. Therefore, even if you are focused solely on social performance, measuring this channel alone does not tell the whole story. 

For instance, in order to isolate social performance, it’s necessary to include the influence of other media within each category: paid (display ads, owned, and email) and earned (SEO). There are a multitude of products on the market to measure earned metrics such as Radian 6, Lithium, and Sysomos.

Owned channel metrics are more siloed and are provided by the individual channel platform like your brand Facebook or Twitter account. Reporting of paid metrics can be pulled from ad-serving logs like Double Click’s DFA for display and/or can be inferred from your latest Google Search index. But these are also fairly isolated. 

In other words, it can quickly become a spaghetti of custom or off-the-shelf reports, dashboards, and owner pathways that require labor and additional cost to gain a clear and complete picture.  


Even aggregating all of these metrics would still ignore the hidden, incremental value of these channels working in concert. The weighted value of positive blog sentiment in the earned space is different from blog network sponsorship within the paid space. But their coexistence could influence their individual weights further. The assumption is that 1+1≠2, but it’s something else.

Let’s talk about solutions. Over the course of this last year we have employed advanced modeling and a lot of elbow grease to create what we refer to as the Connection Index. The goal was to create a single, holistic, measurement index that links all these discrete channels within the ecosystem together.  

This approach creates a “heat-map” view of the ecosystem elements and allows for easy comparison of which channels are driving the most value. With this information in hand it is easy to make optimization recommendations about which channels should receive more funding and which should receive less or be eliminated altogether. 

Below is a five-step process that you can employ to create a holistic, cross-channel score for your own ecosystems.  

1.Define what success is.


Is it:

a.Improved customer retention

b.Causes of demand generation

c.Understanding loyalty

d.Message calibration


e.Offline sales


2.Collect all of your paid, earned, and owned metrics into a single data repository.

The above case is an example of modeling connection indices across the paid, earned, and owned channel spaces for a product warranting minimal pre-purchase research by the consumer. Indices are mapped across the dimensions of consumer groups. How much influence does the channel category have on trial purchasers, repeat purchasers, and loyalty program members for a given time period? The higher the index score, the higher the channel’s influence is on the specific consumer group. 

To begin with, it’s apparent that all channels in unison have the most influence on trial purchasers, at 57.91, and that earned media has the highest influence overall at 58.54. Going a level deeper, we can see that trial purchasers, possibly induced by digital couponing, are influenced most by paid media, at 68.38. Repeat purchasers are most influenced by familiarity with the product and may shop via owned channels at 55.33. Loyalists, who may be playing an active role in marketing your product via blogs and Twitter, are most influenced by earned media at 69.08. Finally, areas needing additional investment or message adjustment can be identified as in the case with paid media’s relatively pale effect on repeat purchasers at 36.95. 


Taking this example one step further, let’s say our definition of success is the influence of the brand’s digital ecosystem on offline sales. A powerful aspect of this model is its ability to establish casual relationships between the index and lower funnel, online and offline conversion activities.  

For example, by applying the Granger Causality method to a CPG client’s transactional data, we were able to determine how index levels could forecast purchasing behavior. With this approach we identified causation between the Connection Index and product trials, repeat purchases and even product shipments. Causality would most likely be different across verticals but we strongly believe this may be an opportunity to demonstrate, with rigor, the link between discrete digital activities (i.e. social) and offline transactions that can eventually lead to ROI. 

There is significant business value to be gained by stepping through a thoughtful integration process of your paid, earned, and owned digital channel categories. This is exciting territory, and it provides a range of opportunities to help advertisers realize the true value of each channel.  

So let’s toast to all the great marketing accomplishments of 2011 and put our heads together to solve the challenges awaiting us in 2012.

[Images: Flickr users kenteegardin, lubermelhopremasager]

About the author

Steve has over 24 years of agency and client side experience leading CRM, interactive marketing, sales and media practices for brands including Nissan, Bank of America, Visa and Procter & Gamble, to name a few. In 2011, he was named an Adweek Media-All Star for his innovative work measuring earned and owned media content and developing predictive analytics models to optimize digital ecosystems