Measuring the effectiveness of Social Activity Advertising

Social Activity Index

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Measuring the effectiveness of Social Activity Advertising

Social Activity Index

Table Of Contents
Introduction Social Activity Index The Equivalent Display Impression Key Findings Social Activity Compared to Other Forms of Online Advertising Performance by Social Activity Type Social Activity Advertising Benchmarks Conclusion Appendix 1 3 4 4 5 6 7 8

appssavvy 2011

Introduction
With the emergence of social media, consumer behavior on the Internet has undergone a massive shift. People now spend more time online performing social activities than they do on email, content portals and instant messaging combined. Understanding people and their actions creates a new opportunity for marketers, and enables brands to deliver contextually relevant ads based on what people are doing rather than what they are viewing. This opportunity to connect with actively engaged consumers has spawned a new segment of brand advertising within display: social activity advertising. Results from social activity campaigns run on the appssavvy Social Activity Platform show social activity advertising amongst the most effective ways to drive brand engagement. Social activity advertising outperforms both standard display and rich media formats, and rivals paid search.

Social Activity Advertising

Social activity advertising serves ad impressions against events rather than content. Publishers and applications developers identify ad-enabled activities, just as they would designate space on a page for traditional online ad inventory. Upon completion of an enabled activity, a social ad is delivered. These ads combine brand messaging through video and interactive media with social calls to action such as sharing, following, or Like-ing. Social activity ads typically follow the flow seen in figure 1.

Figure 1: Example Social Ad Flow

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The most successful social activity ad units immerse themselves within the flow of activities that occur naturally within a website, app or game. Users performing an activity are presented with a contextually relevant ad, styled similarly to unbranded activities, that integrates the brand within the activity stream.

Perform Activity

Social Ad

Engage

Figure 2: Example Social Activity Ad Unit

Measuring Social Activity

The Social Activity Index was established to uncover, track and benchmark online activities and the evolution of consumers social behavior across the Internet. The Index defines a simple yet robust metric that factors both engagement and cost to equate performance across online media. Additionally, several benchmarks are set to establish performance guidelines for social activity advertising and to help marketers, publishers and application developers manage and optimize the performance of their online initiatives. The Index captures data from hundreds of campaigns, hundreds of millions of social activities and billions of ad impressions run on the appssavvy Social Activity Platform. Comparative data for ad formats outside of the appssavvy platform are compiled and sourced from industry benchmarks.

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Social Activity Index The Equivalent Display Impression

The appssavvy Social Activity Index tracks the cost-weighted impact of online advertising mediums by measuring Equivalent Display Impressions (EDI). EDI is calculated for a given ad type by first weighting its engagement rate to the click through rate (CTR) of display advertising, then discounting the difference in performance based upon differences in the equivalent cost per impression (eCPM). For example, if an ad type has an engagement rate 10 times that of standard display ads, and is five times more expensive, it rates at two EDI. Details of the calculation and methodology are shown in Figure 3.

X
Engagement events per impression Weighted Impression cost

Equivalent display impressions Display Click Through Rate

Figure 3: Equivalent Display Impression Methodology

For a given media type, engagement rate is determined by dividing the sum of engagement events by the total number impressions. The weighted impression cost for the same media type is the eCPM of standard Display advertising divided by its eCPM. The type and number of engagement events can vary by media type. This metric values all engagement types equally. See Table 3 for a breakdown of tracked engagement events. Table 1: Engagement Events by Media Type Media Type Social Activity Engagement Event Click to site Video view / Interaction Share Like / Follow

Rich Media Search Display

Click to site Video view / Interaction

Click to site Click to site

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Key Findings
Translating Social Activity performance and cost to EDI demonstrates that Social Activity outperforms standard display advertising by 11 times and doubles the performance of rich media. A summary of Equivalent Display Impressions by Ad Format is found in Table 1. Table 2: Social Activity Index Equivalent Display Impression by Ad Format Ad Format Paid Search Social Activity Rich Media Display Equivalent Display Impressions

12.2 11.4 5.3 1.0

Source: appssavvy social activity platform, U.S. data January - December 2010, eMarketer

Within Social Activity, social games deliver the highest performance, and outperform all ad formats including paid search. Ads within socially enabled apps and web sites drive engagement at nearly seven times display. Table 3: Equivalent Display Impressions by Activity Platform Activity Platform Gaming Application / Website Equivalent Display Impressions

15.2 6.8

Source: appssavvy social activity platform, U.S. data January - December 2010, eMarketer

Additionally, 2.1 percent of all social activity ads are shared, resulting in significant earned media impressions.

Social Activity Compared to Other Forms of Online Advertising

The EDI was established to index the performance of any online media to a standard display impression, accounting for both cost and engagement. This creates a single number that can be used to evaluate the performance of an ad format or campaign against any other type of online advertising. Calculating the EDI for the most common forms of online advertising demonstrates that social activity is greater than 11 times more effective than standard display advertising at driving brand engagement, and twice as effective as rich media. Paid search is the most effective form of online advertising, slightly outperforming social activity, and outperforming display more than 12 times.
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Paid Search Social Activity Rich Media Display 1.0 5.3 11.4

12.2

Source: appssavvy social activity platform, U.S. data January - December 2010, eMarketer Figure 4: appssavvy Social Activity Index (Equivalent Display Impressions)

Social activity ads perform at high levels for two reasons. First, social activity advertising places brands and ads within highly interactive, social content that typically enjoys a loyal and engaged audience. This allows marketers to leverage naturally occurring activity to drive significant engagement with their brands, and to deliver ads based on both context and intent. This explains why social activity ad performance indexes alongside search. Second, social activity ads offer a wider variety of calls to action versus other online ad formats. Along with clicks to URLs, video views and other interactive elements, social activity ad units provide several social calls to action such as sharing to Facebook or tweeting. These branded calls to action often mirror functionality and styling present throughout the website, game or app, and can serve to enrich, rather than interrupt user experience.

Performance by Social Activity Type

Within the Social Activity advertising category, gaming drives the highest cost-weighted engagement score, averaging 15.2 EDI vs. 6.4 for socially enabled apps or web sites. The performance of gaming advertising is driven by its exceptionally high activity rate and uniquely engaged audience. The average gamer may play a social game up to an hour per day, several days per week, during which time they complete multiple activities per minute. The highest EDI is observed when ads are incorporated into gift giving, virtual good use and the completion of in-game missions and/or quests. These activities are central to everyday game play, and frequently prompt gamers to share accomplishments with friends. Brands are able to integrate with these events and become associated with something that enriches the everyday life of the gaming audience. Similarly, ads that follow activities within social and mobile apps or web content are most effective when the activities inherently involve a high level of interaction. Apps and websites that drive the creation of shareable content or encourage self-expression through activities such as interactive contest entries provide advertisers the best opportunity to foster brand engagement. A detailed look at social activity advertising performance by activity type can be found in Figure 5.
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Gift Decorative Item Mission / Quest Gaming 15.2 Environment Mini Games Consumable 4.7 3.7 3.6 21.5 21.0

37.0

User Generated Content Application / Website Social Video 6.8 Contest Pledge Poll 2.4 1.8 6.7 6.5

16.6

Source: appssavvy social activity platform, U.S. data January - December 2010, eMarketer Figure 5: Social Activity Index Detail by Activity Type (Equivalent Display Impressions)

Social Activity Advertising Benchmarks

Consumers strong engagement with social activity advertising translates directly into taking actions to interact with brands. These actions include clicking through to a brand website or fan page, viewing a video, or engaging with interactive elements of the ad creative. Additionally, ads contain social calls to action such as sharing the ad with their friends, Like-ing a page on facebook, or following a brand on Twitter, to name a few. Tracking all of these interactions allows for the establishment of social activity advertising benchmarks. Table 4: Social Activity Advertising Benchmarks Metric Click Through Rate Share Rate Video View / Interaction Rate Benchmark

1.4% 2.1% 2.0%

Observed CTRs on ads following social activities averaged 1.4 percent. Interaction rates with video and other rich media elements averaged two percent. Additionally, social activity ads average a share rate of 2.1 percent, meaning that two percent of all Social Activity Advertising impressions result in branded content being shared to social networks such as Facebook or Twitter. Sharing provides a brand significant added value through earned media impressions to friends followers, or connections on social networks, which extends the reach of campaigns and drives organic engagement with branded content.
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Conclusion
While online advertising has remained mostly unchanged, the emergence of social media has driven significant change in consumer behavior. Social activity advertising gives brands access to previously untapped ad inventory and provides a new way to engage with customers at a time when they are actively involved with relevant activities. These lean-forward events allow context and intent to be captured before ads are delivered, and have paved the way for a new segment of display advertising that significantly outperforms other display media, including rich media and video, and indexes alongside search. As the internet continues to evolve and time spent online continues its shift towards social media and games, social activity advertising will become an increasingly powerful way to reach and impact online audiences.

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Appendix
Definition of Activity Types Activity Platform Gaming

Activity Gift

Description Virtual good (decorative item, consumable), sent to a friend through social gaming network. Gifting provides the opportunity to engage with gamers and have messaging spread virally through a core element of social gaming. Gifts provide a tangible benefit to a recipient that is associated with the brand.

Decorative Item

Decoration, such as a building, or article of clothing, that is placed in a gamers virtual world or on their avatar. Acquisition and use of an item are both activities that are typically sharable to social networks.

Mission / Quest

A series of related tasks within a game that, when performed together, tell a story and / or unlock limited edition items or content. Completion of each task as well as completion of the mission / quest and receipt of rewards are sharable within social gaming network.

Environment

A location within a social game. Both visiting the environment and completing tasks specific to the environment provide opportunities for gamers to complete activities that may earn rewards or be shareable to social networks.

Mini Game

A game within a game. Successful completion of a mini game may unlock rewards and is sharable to social networks. Playing mini games is typically a daily behavior for active gamers.

Consumable

A virtual item that can be used to provide temporary benefit, such as additional energy or increased speed. Both earning and using consumables are typically shareable activities.
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Definition of Activity Types Continued Activity Platform

App / Website

Activity
User Generated Content

Description
Any activity that allows self expression through the generation of unique content. These activities generally occur in apps whose core function is to drive interaction amongst friends and sharing to social networks.

Social Video Contest

A video ad unit integrated with social calls to action. Similar to user generated content, consumers submit contest entries such as photos or drawings. These entries are then both share with friends and voted on by the entire user base of an app or website. Users are provided with the opportunity to align with a brand, cause, event, etc. This alignment, or pledge, is then broadcast to a social network. Multiple choice question, typically used to share an opinion and measure the aggregate opinion of a user base.

Pledge

Poll

Definition of Metrics Metric

Click through rate

Definition
Percentage of ad impressions that result in a click to a specified URL, such as a brand website or Facebook page. Common across all forms of online advertising.

Interaction rate

The number of rich media or social activity ad interactions divided by the number of impressions. Each interaction is counted only once per impression. Interactions include: Mouse over Exit link click Video start Expansion

Share rate

The number of circles to share a social activity ad divided by the total number of impressions. Each available share type (eg, Facebook, Twitter) is only counted once per impression. Metric established by the Social Activity Index to allow for comparison of ad performance in terms of both engagement rates and cost. See the section of this report titled Social Activity Index The Equivalent Display Impression for a detailed explanation of the metric and how it is calculated

Equivalent Display Impression

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About appssavvy
appssavvy rethinks the relationship between delivery and reception of advertising. We partner with leading web publishers and developers to uncover what people are doing across the Internet. Understanding people and their actions is what enables appssavvy, and the brands and agencies that we work with, to leverage and experience social activity. In short, appssavvy is a platform that connects people and brands through social activity. For more information, visit www.appssavvy.com

Contact:
Main Phone - 212.941.5759 For inquires about the appssavvy Social Activity Index please contact: Mark Kopera Product Manager, Brands & Advertisers mark@appssavvy.com To learn more about appssavvys products and services please contact: Jack Bamberger Chief Client Officer jack@appssavvy.com For press inquires please contact: Steve Stratz Illuminate Public Relations for appssavvy steve@illuminatepr.com

appssavvy locations:
NY Headquarters 594 Broadway, Suite 207 New York, NY 10012 LA 1100 Glendon Ave., 17th FL. Los Angeles, CA 90024 SF 701 Sutter Street, 5th Floor San Francisco, CA 94109 Il 321 N. Clark, 5th Floor Chicago, IL 60654

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