social media and the roi conundrum
DESCRIPTION
Presented by Joel Don, Comm Strategies, at the 7th Annual Marketing & Sales Summit The marketing and public relations industry continues to focus on developing solutions to meet the challenge of delivering valid program measurement and proof of ROI. Prior to social media, professionals relied on totaling column inches, estimating media impressions, counting mentions, eyeballs and visits, and proffering the highly controversial (and mostly discounted) advertising equivalency values. These approaches will continue to wane with the ongoing disruption of traditional media channels. The new media revolution coupled with the rapid growth of social platforms, tools and services (many at little or no cost) have ushered a new set of metrics into the ROI equation. The presentation will review current thinking on measurement, and examine options and challenges to delivering valid social media ROI. From a budget perspective, analytical tools that are low cost or free will be compared to full-blown paid services such as Radian6 and Sysomos. The objective of the presentation is to enable marketing and communications professionals to implement measurement systems or approaches that can help an organization better understand how social media tools and strategies deliver results to the business bottom line. Examples will be offered from well-document ROI cases from large, recognized brands. Perhaps more important, the presentation will cover how lesser known small and medium-sized businesses can scale social media ROI to justify the implementation of customer engagement and conversation strategies. More info: http://marketingsalessummit.com/social-media-roi-piecing-together-the-measurement-conundrum/TRANSCRIPT
Is it worth it?Social Media & the ROI
Conundrum
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Social media & the C-Suite value debate
Understanding: what SM is and isn’t Integration & the end of business
fiefdoms (aka silos) Measurement approaches
Agenda
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Can you measure what you don’t value?
>70% of Fortune 500 CEOs don’t do social media
Traditional advertising & PR: estimated reach and impressions◦ Tells us nothing about the
customers◦ Relies purely on correlations
What’s the ROI? Right question: why invest?
The why of social media
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Time Legal Safety (except for LinkedIn) Skepticism/trust Proof of financial return on money
spent
C-Suite hesitance
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How Inc 500 execs measure social media success
26% fans, followers and supporters 25% web traffic 16% lead generation 10% reduced cost of customer support 7% value of sales generated through
social media programsSource: Center for Marketing Research, University of Massachusetts.
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Return on Engagement (ROE) Return on Participation (ROP) Return on Listening (ROL) Return on Fluid Listening (ROFL)
A rose by any other name
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Companies communicate/interact
People get relationships, trust, conversation
What is social? Amplifier of existing
business functions Delivers velocity to
marketing processes Empowered WOM
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The integrated approach
Public Relations/
Corp Comms
Marketing
Advertising
Web/ Content
Mktg/SEO
Human Resources
Customer Service
Sales
Customer
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@DellOutlet Twitter Case
2007 2008 2009
Total Rev: $61B
$6.5M 40 SM employees 25K to 1.5M followers
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Social media is not a strategy, it is a communications tool Social media supports existing business goals & objectives Every customer touch point can be enhanced by social media
◦ Public relations/corporate communications/crisis management
◦ Marketing (including email marketing, newsletters, etc.)
◦ Customer service
◦ Human resources
◦ Lead generation/sales
◦ Event planning/management
◦ Market research
◦ Mobile apps
Goals & Objectives Tactics◦ Blogging
◦ Blog comments
◦ LinkedIn Groups & LinkedIn Answers (B2B)
◦ Shares, mentions, retweets
◦ Status updates (Facebook, LinkedIn, Google+)
◦ Alternative platforms (Pinterest, Tumblr, StumbleUpon)
What is your social media strategy?
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To measure, you must establish targets (timeframes)
Social media goal: increase brand awareness, encourage engagement via myriad social platforms, boost sentiment (non-financials) leading to conversion (financial)◦Frequency (more transactions)
◦Reach (more customers)
◦Yield (more transactions per customer)
Requirements
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Value of followers & likes
$225.99 for 50K “100% Top Notch Quality Twitter Followers” in 20 days. $9.99 gets you 900
$590.99 for 100K+ video views
$350 for 25K Fan Page likes
$550 for 10K +1s
$55 for 300 followers
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Social media process
Initiation
Outputs
Inputs
Non-financial
outcomes
Conver$ion
blogs, tweets, shares, updates, videos, comments
listening, tracking, monitoring, data
collection, analysis
likes, shares, RTs, subscribers, mentions, bounce rates, page views, time per page
$ales, repeat $ales
plan development,
KPIs set
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KPI reveals if goal/objective, which lead to specific tactics, achieve specific targets
Visitors/followers are easy (gamed); the “right” visitor is hard
Key Performance Indicators
Website analytics Event registrations
Newsletter subscriptions Likes
Email signups Recommendations
Registration for contests Blog
Poll/surveys completed Blog comments
Shares RSS subscriptions
Retweets Content requests/downloads
Bounce rates Click-throughs
Sales revenue Time on page
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ROI is not projection or estimate. Reasonable case studies relevant
ROI calc: only after investment yields return Establish baseline; monitor deltas/changes & factor
sentiment analysis Incorporate all costs
◦ travel, personnel, training, memberships, consultant fees, conferences, Facebook ads, sponsored tweets, YouTube ads, mobile app dev. Social media is not free.
Correlations are OK. Track non-financial metrics (transactional precursors), i.e. followers, likes, subscriptions. Dotted, not a direct line.
Direct line consideration: isolate tactics & track customers◦ promotional codes, special landing pages, CRM intelligence
Rules of the ROI road
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Calculating Social Media ROI
𝑅𝑂𝐼= ∫𝑓𝑜𝑙𝑙𝑜𝑤𝑒𝑟𝑠 (𝐹 )
𝑚𝑒𝑛𝑡𝑖𝑜𝑛𝑠 (𝑀 )𝑐𝑜𝑛𝑣𝑒𝑟𝑠𝑖𝑜𝑛𝑠 (𝐶 )
sin(𝑡𝐾𝑃𝐼 )𝑑𝑜𝑤𝑛𝑙𝑜𝑎𝑑𝑠(𝐶𝐹 )+$𝑛𝑒𝑡𝑟𝑒𝑣 𝑦2+ ∑
𝑛=𝑖𝑚𝑝𝑟𝑒𝑠𝑠𝑖𝑜𝑛𝑠
∞
(𝑠𝑢𝑏𝑠𝑐𝑟𝑖𝑏𝑒𝑟𝑠𝑛cos 𝑛𝜋 𝑀$𝑏𝑢𝑑𝑔𝑒𝑡
+𝑏𝑛sin𝑛𝜋𝐶
$𝑒𝑥𝑝𝑒𝑛𝑠𝑒 )
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But seriously…
ROI = gain – cost cost
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Your toolbox
Monitoring
Facebook Insights
Google Analytics HootSuite Sprout
SpcialTweetDec
k
Dashboards ($)
Cision Radian6 Spiral16 Sysomos Vocus
Focus Groups
Market Research
Customer Audits
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Example: HMI SalesObjective: Increase sale of HMI licensesTarget: 250 more licenses sold in Q2 in N.A. market
Q2 KPIs Positive company/product mentions in Q2 Net new FB likes, RTs, subscriptions, downloads isolated to HMI
campaign Net new click-throughs of links to website (inbound links) Net new downloads of promoted content (white papers,
backgrounders, marketing) showcasing why additional seats are needed
YouTube HMI promotional video (views) Coupon/discount codes isolated to Q2 campaign issued via
email marketing, tweets, FB updates, inbound website events Actual HMI license sales in Q2
ROI Correlate response with sales via social monitoring tools Comparison metric: HMI licenses sales outside of N.A.
market; comparative sale of other products (baselines. Social media campaign increased perception and
awareness, stimulating a preference and driving customers to a purchasing decision. Conversion.
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Example: Reputation MgtObjective: Reverse disinformation on bailouts & FordTarget: U.S. market, 2009
2009 KPIs Frequent and appropriate engagement with public Counter all blog, Facebook, Twitter, etc. posts including Ford in
federal bailout
ROI: pre and post-sales results Positive financials Analysis showed sentiment
Public relations alone insufficient Integrated corporate approach to crisis management
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1. Social media ROI is a financial calculation. Likes, followers, shares, etc. are non-financial metrics.
2. You must have a business justification for social tactics. Followers, fans, subscribers have no value unless they can be turned into customers.
3. You cannot deliver ROI if you do not have access to digital intelligence and real-time financial data. Calculator + Excel are your new friends.
4. Anything and everything can be measured. Measure what matters; what matters to your company may not matter to mine.
5. If C-Suite demands ROI proof, SM compaign plan starts with business objective(s), targets (timeframe) and KPIs (metrics). No measurement, no ROI.
5 key takeways
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Q & A