A very interesting conversation took place last week on the Social Media Insider blog. David Berkowitz pondered the need for a advertising pricing model to better distinguish the relational elements of Social Media activities from more traditional media advertising models.
CPM (cost per thousand), CPC (cost per click), and CPI (cost per impression) are all examples David cites as existing traditional pricing models. Each of these models is based upon exposure, traffic, conversion, and interaction levels.
David offers up CPSA (Cost Per Social Action) as a social media metric from which an advertising pricing model could be based. David explains…
“The main benefit of CPSA is that marketers know they’re paying for something social and relationship-oriented. More importantly, marketers know they’re not specifically paying for exposure, traffic, conversions, or interactions (though those can all provide additional value). It’s an acknowledgement that social media is something else, so it’s deserving of a new model, one that stresses relationships above all else.”
Read the article in full and also read the comments. Readers have added-on to David’s original concept with lots of valuable insights.
I agree totally with David that Social Media (and Word of Mouth) marketing activities differ from traditional media activities because of the relational aspect. The pass-along measurement is huge with Social Media and Word of Mouth. If something isn’t pass-along worthy, then it fails to be socialable or talkable.
The problem as I see with this leads me to another WOM TRUTH …

It’s true. Marketers do not decide what’s sociable or talkable, people decide.
In 2005, WOMMA provided marketing agencies and brands with nomenclature and basic models for pricing and buying word of mouth marketing campaigns. At the center of the WOMMA Terminology Framework is the term WOMunit. A WOMunit is defined as a single unit of marketing-relevant information shared by a consumer.
I was never enamored with the term WOMunit. Still not. Here’s why…
A WOMunit to me might not be a WOMunit to someone else. What I find talkable about a brand or business, someone else might find boring and not worth talking about.
Case in point, MIGHTY FINE BURGERS in Austin. On my Brand Autopsy blog, I did a breakdown of what I felt made this local burger spot talkable. I included eleven talkable elements (or WOMunits if you prefer) of the Mighty Fine customer experience [see image]. However, these elements might not be deemed talkable to someone else. They were to me though.
Same thing goes for Social Media activities. Marketers can create videos, contests, and iPhone apps. However these activities will only become relational if they earn enough of an opinion from someone who is compelled to share it with others or interact with it online.
Yes. Measurement is important. Metrics are needed. And maybe the CPSA model is a vast improvement over the WOMunit measure. However, marketers must not get too entangled with metrics and lose focus on making their word of marketing activities more talkable. The more compelling and interesting marketers make products, services, and or brand experiences, the more people are likely to talk about it. (And the more data there will be to measure WOM success.)