• by Mark Walsh  @markfwal, June 6, 2008

Is KPI the new ROI? The term--key performance indicator--seems to be the latest buzzword emerging in connection with the elusive goal of monetizing social media.

The acronym was bandied about at a panel Thursday on social media at the Advertising 2.0 conference, and its importance evinced an unusual degree of consensus among the Internet and advertising executives gathered.

The focus on KPIs arises from the confusion and debate surrounding what metrics to apply to Web 2.0 media where "engagement" rather than passive viewing is the key behavior to measure. Should it be time spent? Click-throughs? "Friends" on social networks? Widget installs?

Settling on standard metrics doesn't matter as much as defining which metrics, or KPIs, are most critical to clients, according to the panelists. "Marketers don't know if they're spending their money wisely with all these new social media doodads," said Matt Rosenberg, group director, media and entertainment at digital agency Organic. "Just pick two or three indicators to watch; otherwise you're going to drown in data."

For ViTrue, which creates video-centric social platforms for brand advertisers, the company's CEO Reggie Bradford identified time spent and video views as key metrics. Jason Witt, senior vice president at MTVN Digital Advertising, cited the more intangible measure of "buzz" as a KPI for ads on MTV sites.

Mike Seiman, CEO of ad network CPX Interactive, by contrast, pointed to the hard data use to judge the success of direct marketing campaigns--click-throughs, leads generated, and sales. "Every client is different," said Rosenberg, in terms of campaign goals they set.

Differences arose among the panelists over the wisdom of advertising against user-generated content. Marcien Jenckes, CEO of Voxant, which provides licensed, professional video to niche sites, called much of the amateur video on the Web "crap" that brands don't want to be linked with. "You have to figure out a way to cull quality video," he said. (Presumably, that's what Voxant is trying to do.)

Bradford, however, noted that ViTrue and sites such as TripAdvisor invite user video contributions, but within a structure that includes professional oversight to ensure inappropriate material doesn't pop up.

For his part, Michael Miller, executive vice president, director of business development at MRM Worldwide, emphasized the importance of context to the success of social media efforts.

Adding a social layer to a TV show with a devoted fan base such as "American Idol" makes sense because viewers want to share opinions about the contestants and critique performances.

"Everybody wants to be doing something in social media because it's what everybody's talking about," Rosenberg said. But he warned against "jamming" a social platform on top of more traditional types of media or advertising simply for the sake of jumping on a trend.