This post stems from an Ad Age article by Jack Neff.  This post regarding the ROI measure of advertising efforts on Myspace and Facebook has sparked numerous debates in my marketing circles.  Its good to see that a ROI method has been acurately applied to gage the affect of advertising on these two mediums.  I wonder if companies will start applying similar methods within their measures?

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Recent research from ComScore, MySpace and Dunnhumby presented at the Advertising Research Foundation's Re:Think 2009 conference in late March suggests that even relatively small outlays on social networks by package-goods brands can result in offline sales impact and deliver positive return on investment.

To overcome that, MySpace teamed with ComScore, which uses a panel of more than 1 million people in the U.S. to track internet usage, and Dunnhumby, which runs loyalty programs for supermarket retailers and has access to loyalty-card purchase data from 59 million people in the U.S. The two panels include 60,000 people who are part of both databases, creating a single-source database that allows a definitive look at how internet ads affect offline purchases.

Measuring sales
One of the first studies was for an unnamed personal-care brand that ran a $1 million campaign on MySpace last year, including a contest in which members submitted videos of themselves and friends for others in the network to vote on, said Heidi Browning, VP-client solutions at MySpace. The program also included online couponing.

By the standards marketers sometimes use to measure digital-ad effectiveness, the MySpace effort wasn't overwhelming. Of 76.9 million people exposed to the campaign in four months, as estimated by ComScore, only 765,000, or fewer than 1%, visited an advertiser page on MySpace, though roughly half who did (358,000) visited the advertiser's website.

But by the measure that matters most, sales, the campaign appeared to pay off nicely. It produced $1.28 million in offline sales, as measured by Dunnhumby, which compared purchases among shoppers not exposed to the campaign with purchases among those who were. That amounted to a 28% return on investment, not counting returns from repeat sales among consumers the brand won via the campaign. Only about 17% of the sales were of products advertised in the campaign; the rest of the sales lift went to the parent brand, in what's frequently called the "halo effect."

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