Best Practices in ROI Chris McLaren

Director, Strategy | Wunderman

February 2014

About Wunderman

CLIENTS

SERVICES

Wunderman transforms

LOCAL CAMPAIGN INNOVATION

GLOBAL ACCOUNTABILITY - MEASUREMENT

AMBITION OF THE WORLD’S BEST DIRECT MARKETER

OPERATIONAL SCALE OF TECHNOLOGY AND CONTENT

Wunderman transforms

CREATIVE ORIGINATION AND GLOBAL DEPLOYMENT

SHIFT FROM CHANNEL TO CUSTOMER CENTRIC

1,400 AGENCY EMPLOYEES CONNECTED

DATA, DIGITAL, DIRECT FOR B2B AND B2C

The key to making a

partnership work is setting

a common vision and a

common language.

You need a common

language to bring people

together - and that

language is the data.

- Jeff Edmondson, Founder, Strive Together partnership

Social media is a marathon,

not a sprint.

Measure everything.

See what works.

See what doesn’t. Tweak and

optimize the plan as you go.

– Clay Hebert, CEO, Founder Tribes Win

QUICK STATS

72% of all adults are on a social network

• 89% of 18-29 year olds

• 78% of 30 to 49 year olds

• 60% of 50 to 64 year olds

• 43% of people over 65

One in four social network users follow

brands, products or services on social networks

Source: Pew Research 2013; Forbes 2012

Source: Forbes, May 2012

78% of consumers

say that the posts made by companies on social media influence their purchases

Online social networks are growing. Fast.

75

38

13

4

3.5

2.8

1.5

Years to 50M Users

Instagram Twitter Facebook Internet Television Radio Telephone

Source: United Nations Cyberbus Millennium Report, 2000; Facebook Newsroom; The Verge, May 2012;

Source: Jeff Bullas 2013; Eric Qualman Social Media Video 2013; BNN News 2013;

YouTube is more popular than cable TV

Over 1 billion unique monthly visitors

Source: Jeff Bullas 2013; Eric Qualman Social Media Video 2013; BNN News 2013;

Social media has overtaken porn as the #1 activity on the web

Source: Jeff Bullas 2013; Eric Qualman Social Media Video 2013; BNN News 2013;

Twitter handles more search queries per

month than Bing and Yahoo combined Twitter: 24 billion

Bing: 4.1 billion

Yahoo: 9.4 billion

“We don’t have a choice on whether we do

social media, the question is how well we

will do it.”

– Erik Qualman

Author, Socialnomics

Social ROI defined

• “Return…” (social benefits)

• Transactions

• Every possible brand interaction prior to a transaction

• Post transaction behaviors, including brand advocacy

• Brand sentiment

• SEM rankings

• On-site social actions like ratings/reviews, liking and commenting

• Customer service (efficiency/effectiveness)

• Market research

...can generally be “rolled up” to strategic KPIs or value categories

• “…On Investment” (social costs)

• Easier to calculate (though many ‘R’s are not solely attributable to

social media)

DEFINING

SOCIAL “R”

Social “R” Characteristics: Pros

Traffic

• 15-20% of Unique Visitors

from “Earned” Links (source: Meteor Solutions)

Quality

• 1.5 - 4x Conversion Lift

• Loyal Fans (more likely to

buy more than once) (source: Razorfish)

+

Advocacy

• 90% of consumers trust

the opinions of people

they know

• 70% trust anonymous

ratings and reviews

posted online

• Compare this with just

33% who trust online

banner ads (source: Nielsen)

+

Add: Community Value

The larger the community, the greater the number of

earned media impressions, clickthroughs,

conversions, etc. for every $ spent.

Earned media communities make all other marketing

investments more valuable by enhancing and

extending their effects

http://www.wired.com/business/2013/07/email-crushing-twitter-facebook/

Social “R” Characteristics: Cons

Awareness

Engagement

How people experience

brands

Seen from a

measurement POV

Awareness

Engagement

Advocacy

Conversion

Time

0%

100%

Advocacy

Advocacy Feedback Loop

Though earned media contributes value throughout, it is

mainly effective at creating demand through awareness

and engagement - before audiences have even thought

about a brand / product / service. It is nearly impossible to

build a brand or create demand using Paid media; this is

where Earned Media tends to deliver higher ROI.

Ratio to a conversion

(example)

100,000:1

5,000:1

50:1

Conversions 1:1

Users take a desired action

Buy online, live chat, contact form, whitepaper download, visit specified site content, email sign up, RSS, etc.

So

cia

l S

oc

ial

Pa

id s

ea

rch

, e

ma

il, w

eb

Social “R” place in Customer Journey

How an understanding of ROI can inform client strategy

3M Littmann Stethoscopes

Why Social Media – and How to Leverage

Littman has 92% market share. The average purchaser of a new

stethoscope:

Already owns a stethoscope*

Already owns a Littmann (~92% likely)

Paid search helps ensure Littmann is there to capture the lion’s share of

current demand; however, paid search does little to expand the current

market, e.g, create new demand for stethoscopes among clinicians

Social media operates at the top of purchase funnel, creating

awareness and demand for new stethoscopes

New stethoscope offerings (new FABs, esp. customization,

lifestyle/vanity offerings), coupled with social media, can create new

demand for stethoscopes among current clinicians, leading to more

lifetime stethoscope purchases per clinician

*Students are an exception. However, Students are more present

and active in social media than any other segment

How to Value Social “R”?

Paid Media Return (Easy)

– Traffic

– Actions - searches, coupon (QR Codes) /whitepaper downloads,

– Conversions – Sales, lead captures, phone calls, etc.

– ROI – Cost per click, cost per lead, sales & revenue

VS

Earned Media Return (Difficult)

– Reach: Friends, fans, subscribers, followers

– Views: Social page views, video plays, SlideShare plays

– Engagement: Likes, comments, sharing, retweets, replies, etc

– Impressions: Influence and reach of people posting the chatter

– Context & Sentiment: Subjects/themes and pos/neg buzz

– ROI (???)

One way to measure Social “R” is by expressing

the value of its native metrics in the form of paid

metrics and/or transactions that already have a

dollar value attributed to them for your business.

A fairly involved example

Awareness, Engagement, Conversion, and Advocacy

values for Earned Media using the following client-specific

“known value” inputs:

• Paid media: Cost per impression (CPI)

• Paid media: Cost per click to website (CPC)

• Website (conversion platform):

Number of “where to buy” visits from Earned Media

• Website (conversion platform):

Conversion rate per click

• Average Revenue per Conversion

Awareness

• Impressions • Followers, Fans,

Subscribers, Members • Lists • Page Views • Mentions per time period • Inbound links • Share of Conversation • Brand specific searches • Sentiment Trends

Advocacy

• Advocacy Behaviors (various, including:) • Retweets • Testimonials • Recommendations • Referrals

• Co-creation/User Generated Content

• Content Sharing • Activity Sharing • Information Sharing

Conversion

B2B: Users take actions known to drive meaningful business outcomes: • Demo sign ups • Webinar sign ups • Contact forms • Whitepaper downloads • Email sign ups • Visits to desired site content

B2C: • Go to store and buy • Find a partner/distributor • Lead form

Engagement

• Comments • Visit Rate or Content

Resonance • Return Visits • Click-throughs • Registrations/Opt-ins • Retweets • Replies • Referrals • Recommendations • Thread Size • Time with Content • Suggestions/Feedback • Content Downloads • Content Sharing • Spinoff Content

A E C L

Putting social metrics into value categories

Always specific to brand and/or campaign

Some common,

some specific

Common

Awareness

Engagement

Social media-driven value (one month)

How people generally experience

brands in social media

Seen from a

measurement POV

Awareness

Engagement

Advocacy

Conversion

Time

0%

100%

Advocacy

Advocacy Feedback Loop

$ Value

for December

$169,200

$318,301

$308,001

Conversions $26,103

Users take a desired action

Buy online, live chat, contact form, whitepaper download, visit specified site content, email sign up, RSS, SMS, etc.

$821,605

(total value)

+

+

+

Summing categories for total “R”

Total

Return

($)

$A $E $C $Adv

Common value “language” easier to align activities,

make comparisons, optimize, forecast, plan

If all metrics are assigned a dollar value, it becomes possible

to sum total value contribution for any timeframe, channel, or

campaign:

BENCHMARKING

Deeper Benchmarking Examples

Deeper Benchmarking Examples

BRAND

SENTIMENT

Brands have an (arguably)

quantifiable value

Source: http://www.interbrand.com/en/best-global-brands/2013/top-100-list-view.aspx

Brand sentiment drives brand value

• If you track brand sentiment in social media, you have a

measure of the effect that all marketing efforts (not just

social media) are having on it

• If you peg your brand’s sentiment to a brand valuation,

you can theoretically know the dollar value of sentiment

changes over time, assuming there is a causal

relationship between the two

• Most brands maintain NPS to measure sentiment; social-

specific version in the works

CSAT & Loyalty Measure: NPS

See also: "Measuring Customer Satisfaction and Loyalty: Improving the ‘Net-Promoter' Score"

ROI Best Practices Checklist

ROI measurement is not about “perfection”; it is about

having some idea what you’re doing, why you’re doing it,

and how you’re doing

Measure value using reliable methods and calculations that

are specific to your business as fully as possible

Measure channels, tactics and campaigns using same value

categories, so you can make informed comparisons about

relative value (crucial to setting strategy)

Measure new channels, tactics and campaigns, while still

able to measure overall value as variables change

Enable budgeting against outcomes rather than deliverables

Tie reporting directly to annual and/or multiyear goals

Assess on monthly/quarterly/annual basis

Discussion

THANK YOU

APPENDIX

Advocacy

38

20% of consumers are key influencers of purchasing

activities of 74% of the population.

Gartner

Less than 25% of people say they trust emails they sign up for.

1 in 3 people come to a brand through a recommendation.

Consumers mention 56 brands in conversation per week. Keller Fay

2/3rds of the economy is influenced by personal recommendations. McKinsey & Company

The most recommended company in any given

category grows 2.5x the category average.

Bain & Co.

Weber Shandwick

62% of these discussions are positive.

40% of advocates answer, comment, or give opinions online

several times each week.

Yahoo! and

Comscore

Each peer recommendation reaches 150 people on the social web. Forrester

WOM Facts

39

Social Media Amplifies WOM

• Each recommendation reaches

150 people

• 500M peer impressions

annually in US

• Now rivals advertising

impressions

Source: Forrester Peer Influence Analysis 40

1. Identify

2. Mobilize

3. Measure

Advocate Responses

Advocate Actions

Paid Media

Social Media

Recommendations

Ratings & Reviews

Stories & Testimonials

Offers

Answers

Clicks, Conversions

Impressions

A/B Testing

Review & comment moderation

Z Score, NPS®

Advocate Profile Data

How It Works

Word of Mouth marketing solution /

fully integrated brand advocacy system 41

Use Advocacy Modeling

• Overlay customer and prospect databases with social profile

data and segment into audience categories ranging from

“advocates” to “terrorists”

• Develop social and/or cross-media campaigns to move targets

to become brand advocates

• Track results over time

0

100

+ -

Influ

en

ce

Opinion

Terrorists

Non-Threats Fans

Advocates Mercenaries

Gage Confidential. All Rights Reserved.

Reporting and Dashboards

43

Marketing Practice Audit - Summary

Designing Reporting

• Web-based reporting dashboards are the best

way to provide access on-demand

• However, to be consistently useful, dashboards

must be designed in accordance with how the

information should be used at each

organizational level

44

Source: “Framework: The Social Media ROI Pyramid”. Web Strategy, by

Jeremiah Owyang. Posted December 13th, 2010 45

Business purpose of community

measurement

Gage Confidential. All Rights Reserved.

• Performance dashboards for use in managing

community and reporting progress should be

created for three audience levels:

– Business Executives

– Business Stakeholders

– Community Managers and Agencies

…as illustrated on next slide

46