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The True Value of Social Media
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  • 1. THE TRUE VALUE OF SOCIAL MEDIA How social media is forcing us to redefine our marketing KPIs ©2010 22squared.
  • 2. 1. We create too many dead-end experiences. 2. We don’t know how to evaluate things that aren’t dead-end experiences. THE PROBLEM (WITH MARKETING) ©2010 22squared.
  • 3. http://www.youtube.com/watch?v=ERGrSQoY5fs http://www.youtube.com/watch?v=D3qltEtl7H8&feature=related IT’S WELL http://www.youtube.com/watch?v=gwaX40EnUdM DOCUMENTED. ©2010 22squared.
  • 4. CULPRIT The Microsite Engaging, fun, but not very shareable. ©2010 22squared.
  • 5. CULPRIT The Online Game Engaging, addictive, but not very shareable. ©2010 22squared.
  • 6. CULPRIT The Online Video Engaging, entertaining, but not very shareable. (Unless it goes viral...which is a 1-in-a-million chance you can’t plan for.) ©2010 22squared.
  • 7. DEAD-END DIGITAL Engaging digital actions are important. But what’s more important is that we enable consumers to effortlessly share, adapt and evolve our messages AND measure the influence they create. ©2010 22squared.
  • 8. RETURN ON INVESTMENT Digital Digital Action Interaction Sale Return on Interaction Dead-end digital is similar to most advertising, and we measure it accordingly, judging its performance based on the sales it directly motivates. But what about advocacy? What about the ripple effect? Aren’t most purchases influenced by personal recommendations anyway? We’re missing half the picture ©2010 22squared.
  • 9. A DIFFERENT APPROACH DIGITAL MEDIA MEDIA THAT’S SOCIAL Objectives: Objectives: Reach Advocacy Awareness Loyalty Coverage Trust Engagement Influence Measures: Measures: # of visitors Sentiment # of page views Comments Time on site Feedback Conversions Mentions Organic Reach Adapted from http://www.slideshare.net/LumensionSecurity/the-greatest- question-since-the-meaning-of-life-what-is-the-roi-of-social-media ©2010 22squared.
  • 10. RETURN ON INVESTMENT Digital Digital More Interaction Sale WOM Reco Action Sales Return on Interaction + Return on Influence A more realistic way to assess value. ©2010 22squared.
  • 11. OUR GOAL Quantify the true impact of digital and social actions by moving beyond immediate impact to include return on influence. http://www.businessweek.com/magazine/content/09_22/b4133032573293.htm ©2010 22squared.
  • 12. COOL IDEA… BUT HOW? ©2010 22squared.
  • 13. Visited this brand’s Downloaded a phone application website or microsite from this specific brand Posted a video online (e.g., Facebook, YouTube) about this brand Watched commercials or videos made by this brand on YouTube Read a blog sponsored Customized or designed a by this brand product for this specific brand Played a web or browser game sponsored by this brand Posted a Tweet or RT about this specific brand We studied 22 Made a charitable donation Posted pictures online (e.g., Flickr, Picasa, directed through this brand’s site Facebook) that focused on this specific brand Participated in an augmented reality experience sponsored by this brand Wrote about this brand in a personal blog Became a fan of this brand on Facebook Sent a customized message sponsored by digital actions and their this brand to a family member or friend effects on consumers. Joined a Facebook group focused on this specific brand Posted a Facebook status referencing this specific brand Followed this brand on Twitter O ered product ideas to this Voted on a product decision by this brand in an open forum (e.g., brand (e.g., flavor, design, name) mystarbucksideas.com) Provided feedback on this Posted reviews about this brand Joined an online panel or research survey for this specific brand brand’s website ©2010 22squared.
  • 14. 1. 1 2 3 4 Engage Visited this brand’s website or microsite 8. Contribute Posted reviews about this brand 13. Participate Become a fan of this brand on Facebook 16. Create Posted a Facebook status referencing this specific brand 2. Watched commercials or 9. Provided feedback on this 14. Joined a Facebook group 17. Sent a customized message videos made by this brand’s website focused on this specific sponsored by this brand to a brand on YouTube brand family member or friend 10. Voted on a product decision 3. Downloaded a phone by this brand (e.g., flavor, 15. Followed this brand on 18. Wrote about this brand in a application from this design, name) Twitter personal blog specific brand 11. Joined a panel or research 19. Posted pictures online (e.g., 4. Read a blog sponsored survey for this specific brand Flickr, Picasa, Facebook) that by this brand focused on this specific brand 12. O ered product ideas to this 5. Played a web or browser brand in an open forum (e.g., 20. Posted a Tweet or RT about game sponsored by this mystarbucksideas.com) this specific brand brand 21. Customized or designed a 6. Made a charitable product for this specific brand donation directed through this brand’s site 22. Posted a video online (e.g., Facebook, YouTube) about 7. Participated in an this brand augmented reality experience sponsored by this brand ©2010 22squared.
  • 15. RECRUIT CUSTOMERS GROUP BY ACTIONS SURVEY ONLINE COMPARE GROUPS n=408 ENGAGE n=281 15 min. survey CONTRIBUTE ENGAGE PARTICIPATE n=282 BRAND X PARTICIPATE ADVOCACY CONVERSATIONS CONTROL NEW CUSTOMERS n=284 BRAND SPEND CREATE CONTRIBUTE CREATE n=865 n=1,945 CONTROL Recent customers of 52 brands 20+ years old | HHI $35k+ Control group representative of Survey included questions on how Compared groups to each other M/F Split | Social Media Accounts brands found in test groups much they talked, recommendations, and made conclusions based on brand spend, etc. significant di erences ©2010 22squared.
  • 16. BRANDS WHOSE CUSTOMERS WE STUDIED. Brands determined by a pre-study of social media actions among consumers. ©2010 22squared.
  • 17. % Who Talked Percent of those who initiated conversations about the brand. Control Engage Contribute Participate Create 26% 47% 55% 53% 64% 1.8 x control 2.1 x control 2 x control 2.5 x control Assuming a set of 100 Assuming a set of 100 Assuming a set of 100 consumers, 80 more consumers, 60 more consumers, 170 more people talking than the people talking than the people talking than the Engage set. Engage set. Engage set. Source: Digital Actions and Their Effect on Advocacy, 22squared and Consumer Insights Inc., 2010. ©2010 22squared.
  • 18. Via Instant % Who Face to Via Social Message or Via Other Via Email Talked Face Media Texting Digital Means Control Where 26% 94% 2% 8% 3% 1% people Engage talked 47% 82% 9% 15% 5% 0% Participate and Create are the only digital actions that generate Contribute conversation both online and offline. Proof that social media has influence 55% 71% 10% 27% 11% 3% beyond the digital space. Participate 53% 75% 43% 22% 28% 9% Create 64% 55% 48% 41% 19% 3% Source: Digital Actions and Their Effect on Advocacy, 22squared and Consumer Insights Inc., 2010. ©2010 22squared.
  • 19. How much they talked The number of conversations per 100 consumers Control Engage Contribute Participate Create 42 conversations out of 110 conversations 123 conversations out of 260 conversations out of 270 conversations out of 100 consumers out of 100 consumers 100 consumers 100 consumers 100 consumers Source: Digital Actions and Their Effect on Advocacy, 22squared and Consumer Insights Inc., 2010. ©2010 22squared.
  • 20. Social media actions generated nearly 2.5 times more conversations per 100 consumers than the lower involvement engage group. Control Engage Contribute Participate Create 42 conversations out of 110 conversations 123 conversations out of 260 conversations out of 270 conversations out of 100 consumers out of 100 consumers 100 consumers 100 consumers 100 consumers Source: Digital Actions and Their Effect on Advocacy, 22squared and Consumer Insights Inc., 2010. ©2010 22squared.
  • 21. How they influenced purchases Percent who spurred a purchase % who talked % who spurred a purchase Control Engage Contribute Participate Create 11%... 20%... 26%... 32%... 35%... influenced a transaction influenced a transaction influenced a transaction influenced a transaction influenced a transaction 26% talked 47% talked 55% talked 53% talked 64% talked ©2010 22squared.
  • 22. Influenced Purchases The number of purchases influenced per 100 consumers Social actions yield about 4x as many influenced purchases as dead-end digital engagements. 83 95 Purchases Purchases Influenced Influenced 22 32 5 Purchases Purchases Purchases Influenced Influenced Influenced Control Engage Contribute Participate Create 42 conversations out 110 conversations out 123 conversations out 260 conversations out 270 conversations out of 100 consumers of 100 consumers of 100 consumers of 100 consumers of 100 consumers ©2010 22squared.
  • 23. And, they spend more too... Median “Spend Index” by groups: Socially involved customers spend more and drive higher spend levels among the people they influence. 247 126 100 Control Group Engage + Contribute Participate + Create Median dollar value associated with customer groups. Self-reported customer includes dollars spent, anticipated spend, and referred dollars through recommendations. Source: Digital Actions and Their Effect on Advocacy, 22squared and Consumer Insights Inc., 2010. ©2010 22squared.
  • 24. SO WHAT’D WE LEARN? ©2010 22squared.
  • 25. 1 Take a broader view of value. We have to try to understand the impact of social media beyond the initial interaction and through the reverberating influence it has on consumers. We can’t only apply traditional digital metrics to social interactions. Digital Digital More Interaction Sale WOM Reco Action Sales Return on Interaction + Return on Influence Return on Investment ©2010 22squared.
  • 26. 2 Social media actions pay. It pays to leave the comfort of your own website or microsite and live in the consumer’s world of social media. Can you screw it up? Sure. But some simple principles, like being honest and interesting and adding value to people’s lives, can go a long way in the social space. in more places Gets more people talking more times for more sparking more purchases money ©2010 22squared.
  • 27. 3 Move from dead-end digital to social We’re not saying that brands should stop being helpful or entertaining. That they should stop making cool apps or killer videos. We’re just saying that you should do it in the social space and let people mess with it. The more you get them participating and creating, the more you’ll get in return. DO MORE OF THIS... “I follow them on Twitter and ask for “Purchased a co ee, was able to ask “I participated in their design the next “I posted pictures of my many pairs of advice on certain products. The agents about di erent varieties and got what I donut competition, as well as enjoying Nikes.” are usually very helpful and informative.” wanted!” their delicious co ee on a regular basis.” “I sent an email about an ice cream “I ordered personalized M&M's for a “I occasionally drink Mountain Dew and I “I wrote to Starbucks encouraging them to add more giveaway on Facebook.” Valentine's Day gift. I also posted this on voted in a contest to determine a new Gluten Free products to their o erings and to complain my Facebook status and copied the URL flavor.” when the GF orange cake was removed from their addy and sent out to a few friends.” product o erings.” Source: Digital Actions and Their Effect on Advocacy, 22squared and Consumer Insights Inc., 2010. ©2010 22squared.
  • 28. 2 QUICK NOTES: This is changing: These are good: http://www.slideshare.net/ LumensionSecurity/the- greatest-question-since-the- meaning-of-life-what-is-the- roi-of-social-media http://www.slideshare.net/ yongfook/social-media-roi As social media increasingly becomes the backbone of our digital experience, consumers will migrate to being more active participants and creators of content. This could already be obsolete. ©2010 22squared.
  • 29. FOR MORE ON BUILDING ADVOCACY, VISIT: http://www.22squared.com/whoweare/agency-model http://www.slideshare.net/brandonmurphy/the-friendship-model ©2010 22squared.
  • 30. ©2010 22squared.