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SHOW ME THE MONEY. PROVING THE VALUE OF SOCIAL MEDIA MARKETING A REQUIREMENT
 

SHOW ME THE MONEY. PROVING THE VALUE OF SOCIAL MEDIA MARKETING A REQUIREMENT

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    SHOW ME THE MONEY. PROVING THE VALUE OF SOCIAL MEDIA MARKETING A REQUIREMENT SHOW ME THE MONEY. PROVING THE VALUE OF SOCIAL MEDIA MARKETING A REQUIREMENT Document Transcript

    • SHOW ME THE MONEY. PROVING THE VALUEOF SOCIAL MEDIA MARKETING AREQUIREMENTFor the typical company, more than 8% of revenue is reinvested in marketingeach year to assure that new customers and markets are acquired, existingcustomers remain loyal, and revenue streams continue to grow.As customers grow more empowered via on-line resources and ecommerce,marketing becomes even more important to achieving revenue and growthgoals, making it more critical than ever to get the marketing investments right.Marketers Not Getting Respect TheyDeserveHowever, recent studies indicate that senior executives feel these significantmarketing investments are less than efficient or effective.Ever more skeptical and frugal executives are asking serious questions as to whether marketing investments are payingoff. A decided lack of confidence in marketing exists amongst C-level executives.Executives are seeking accountability, questioning whether marketing is meeting goals, such as:  Driving revenue growth?  Increasing customer retention and loyalty?  Improving brand image and sentiment?  Increasing competitive advantage?  Operating efficiently, generating expected benefits from incremental investments?Often the answers to these critical questions are not available, leading to the current crisis in confidence.Quantifying how marketing is meeting goals and driving business contribution is crucial, yet most marketers fall short onexpected accountability requirements. This is clearly illustrated in a VisionEdge / Marketo study, where CEOs were askedhow well their marketing departments were doing in managing their budgets and delivering on business goals, with 67%of the CEOs gave their marketing departments a B or C – mostly because of issues in accountability. 1
    • Akonna | Show Me The Money. Proving The Value of Social Media Marketing a RequirementAs a marketer, you know that your campaigns are delivering good results, and that additional investments could generatebig rewards. So how can you remove the skepticism and gain the respect you deserve from senior executives?According to Forrester, the answer is economic justification – with over 75% agreeing or strongly agreeing that their“ability to track marketing ROI gives marketing more respect.”Proving Value of Social Media MarketingNo ExceptionMany marketing executives are convinced that the future of marketing relies onsocial media, and as a result, investments in social media marketing are quicklygrowing. In fact, when asked how important social media marketing is to futuresuccess, 87% of marketers indicated that social media was “important” or “veryimportant” to achieving their biggest marketing goal this year, this according toMashable.With so much importance being placed on social media marketing, it is no wonderthat it is the fastest growing budget line item, with AMA/Duke reporting that socialmedia marketing has carved out a 9.9% allocation of current marketing spend,with an expected doubling to 17.7% over the next 5 years.In the near term, the investment growth in social media marketing is expected to be dramatic, with MarketingSherpareporting that more than two-thirds of organizations expected to increase their social media marketing investments overall,and 25% expected to increase spending on social marketing by at least 20 percent. However, the growth is in doubt, withmany marketers and senior executives growing concerned that social media marketing is not delivering on expectations.Is the burgeoning crisis in social marketing confidence resulting from a lack of success, or from a lack of accountability? For the more skeptical organizations, MarketingSherpa reports that the chief concerns constraining more social media marketing spending is:  Determining where the budget should come from / trade-offs with other marketing investments  Inability to track the success of social media marketing campaigns  Uncertainty about the return on investment (ROI)  How to reallocate the required human resources to support social media marketing programs. With such a new and rapidly advancing marketing vehicle, these questions are not unusual, and not too different than the questions that revolved around the Internet in 1996. The marketers that are able to answer these questions are 2
    • Akonna | Show Me The Money. Proving The Value of Social Media Marketing a Requirementmore likely to get the necessary investments to stay ahead of the innovation wave, and more importantly, the competition.Measuring ROI Critical toSocial Media MarketingGrowth and InvestmentsBeing able to prove the ROI of social media marketingis vital in order to maintain credibility, and gather theneeded financial support for this business criticalinvestment.In a survey of 140 social strategists by Altimeter,accountability reigns supreme, with respondentsindicating that the greatest challenge for increasinginvestments and driving social and digital marketingsuccess is “Measurement and ROI” (42%).As a result, the top priority indicated for 2011 isCreating ROI Measurements (48%).ROI Measurement is Vital, But Remains a ChallengeAlthough social media marketing is a top priority and critical for future success, marketers struggle with ROI measurementof social campaigns, as a result, constraining or threatening all important future funding.Surveys report that even though ROI measurement is vital to success, that:  Some 75% of B2B social marketers currently not measuring the ROI of social initiatives (MarketingProfs)  Almost two-thirds of companies (61%) indicating their organizations are “poor” (34%) or “very poor” (27%) at measuring return on investment from social media. (E-consultancy survey of 400 companies, Jan 2010)Most marketers want to be social ROI savvy, but are currently not able to advance beyond traditional activitymeasurements to tally the competitive and financial value/bottom-line impact of social marketing programs.Measurements such as website site traffic, the number of followers / fans / subscribers, SEO ranking, posts and mentionsare currently being used to determine whether social marketing efforts are delivering results. Although importantmeasurements, these activities do not translate to competitive advantage, or bottom-line business impact, so crucial inconvincing c-level executives that current programs are working, and even more should be allocated to these essentialinitiatives. 3
    • Akonna | Show Me The Money. Proving The Value of Social Media Marketing a Requirement These activity based metrics, such as tracking fans / followers, site traffic and posts are best used to help social strategists and community managers drive more successful campaigns, but do little to convince marketing and C-level executives that investments in social media marketing programs are valuable. Clearly, different stakeholders require different types of success reporting – moving beyond activity tracking to assure that the social marketing programs are driving incremental sales and loyalty, mitigating business risks, improving marketing and business efficiency, and driving competitive brand and financial advantages.But moving beyond activity to communicate the metricsthat matter to executives can be difficult:  The Buyer’s Journey is non-linear / complex making attribution of tangible benefits to social marketing and specific campaigns difficult:  38 different marketing vehicles and growing  An average of 7.6 different marketing sources are used throughout the purchase decision (Forrester 2011)  Multiple marketing / sales touches per sale making attribution difficult  Long time frame for most businesses / transactions make it easy to lose track of the value chain  Financial benefits include revenue, but the benefits of social marketing go beyond just that one success measure to include marketing efficiency improvements, customer loyalty, support cost reductions, and the benefits of collaborative innovation  Social marketing benefits go beyond just tangible financial quantification and need to include risk management & brand improvements  The method and metrics used to calculate these benefits can differ dramatically based on the industry and business model  Information on competitive social advantages is often vital to success, particularly where developing and maintaining an innovative lead is so key, but the metrics are often difficult to gather, compare and maintain  Multiple groups, stakeholders & systems make integrating and summarizing information difficult. 4
    • Akonna | Show Me The Money. Proving The Value of Social Media Marketing a RequirementCompete Insights™As a new medium, social media marketing success is best measured by how the company has leveraged these newchannels to gain an innovative, sustainable lead, and assuring that this lead is translating into a positive financial andbusiness impact.Measuring, monitoring and optimizing social media marketing competitive advantage is critical for success. And as wehave discussed, proving this advantage and how it translates into quantifiable business benefits is critical foraccountability - overcoming executive scrutiny and securing the investments needed to support plans and goals.A platform to automatically and regularly gather and report on how social media marketing campaigns are bestingcompetitors’ efforts, delivering superior benefits, and driving key executive performance indicators metrics can helpmarketers prove the ROI of social efforts to skeptical executives, and improve future investments and results.To address this need, Akonna has developed CompeteInsights™, the first SaaS application that quickly andeasily measures and monitors social marketingperformance versus competitors, calculating howmarketing’s efforts are currently out-performing orlagging named competitors. The tool is designed toanswer key questions such as:  How do our social media marketing efforts compare?  How are we translating these efforts into tangible value compared to the competition?  If current trends continue or are improved, how will our efforts compare in the future?Measurements, analysis and reporting is conducted to  Highlight both short term gains and longer term benefits, as well as quantifying financially tangible and intangible gains,  Prove and improve how social marketing is driving engagement, financial gains, risk management and brand advantage. The Compete Insights platform uses a comparative dashboard model to create a complete picture of social media marketing performance. The model advances beyond basic activity measurements such as number of fans / followers, to tally both the short and long term impacts of social marketing efforts, as well as quantifying the direct bottom-line tangible impacts, and more indirect / less tangible impacts. In this manner, the team view evolves from just following short term gains towards a more balanced approach, including a longer term valuation of social marketing programs. The Compete Insights platform takes daily measurements of marketing’s performance, and the relative performance of the competition. These benchmark results are then tallied across all the dimensions of the ROI Dashboard into executive reports to compare performance over the 5
    • Akonna | Show Me The Money. Proving The Value of Social Media Marketing a Requirementpast month, quarter, year or longer. Company and competitor news and events are correlated with the performance tohighlight cause and effect.Using trending and simulation, future performance is estimated to illuminate how much the organization is gaining, orfalling behind in engagement, financial, risk and brand.Looking at each measure, the Akonna Compete Insights platform measures competitive performance and ROI as follows:EngagementEngagement measures and compares the reach, activity and involvement of the community for the marketing organizationand named competitors.The comparative engagement benchmarks in Compete Insights include:  Level of Engagement – compared to the potential reach of marketing programs, the level to which the community is active  Impressions – quantifying the number of impressions the marketing organization generated  Reach – a tally of the number of followers, fans and connections  Marketing Activity – the number of posts from the company / marketing team  Community Activity – the number of retweets, posts and mentions from the communityFinancialFinancial quantification of social efforts is essential for resolving the “crisis in confidence”, maintaining current funding,and securing important future spending increases.Compete Insights quantifies the absolute and comparative value for the following:  Financial Index (Total Value Derived) – the total derived value of social marketing including revenue / margin, marketing equivalence savings, risk mitigation and brand improvement value  Revenue / Margin – the revenue / margin contribution from social marketing efforts  Marketing Equivalence – the marketing savings using social marketing versus other marketing alternatives  Risk Mitigation Financial Impact – the estimated value of risk mitigation efforts  Brand Improvements Financial Impact – the estimated value of brand improvements via social marketing effortsRiskSocial channels can be used to identify and mitigate risks sooner and more effectively, such as addressing negativereviews, product issues and customer complaints. The ability of the organization to use social media for these purposesrepresents a clear advantage.Comparative risk performance is measured, monitored and improved using Compete Insights to quantify:  Risk Index – the negative mentions for the brand versus the total brand mentions  Risk Mitigation Activity – the level of direct activity to help mitigate / reduce risks  Negative Sentiment – the number of negative brand mentionsBrandMeasuring social marketing performance should go beyond just the short term and tangible financial measures, to assurethat efforts are driving long term advances and advantages, especially towards improving brand performance.Brand advantage is measured in Compete Insights, comparing the company versus competitors using:  Brand Passion – the positive mentions of the brand compared to all mentions for the brand 6
    • Akonna | Show Me The Money. Proving The Value of Social Media Marketing a Requirement  Share of Conversation – the overall mentions of the brand compared to all mentions for the company and competitive brands  Positive Sentiment – the number of positive brand mentions  Brand Mentions – the number of all brand mentions, both positive and negativeSocial Benjamins™To summarize the competitive advantages or shortfall for busy senior executives, Compete Insights tallies an overallscore to summing the engagement, financial value, risk mitigation and brand equity into a single index, called SocialBenjamins.Value for MarketersEver more skeptical and frugal executives demand that marketers be more accountable, evolving from “Mad Men” to“Math Men”.Compete Insights provides the executive reports needed to prove and improve competitive advantage and ROI:  Prove and Improve Social Marketing Success  Quantify benchmarks versus competitors and leaders to verify leadership, gather additional investments / improvements and assure future success  Track social success for nearer term gains (Engagement & Financial) as well as longer term benefits (Risk Mitigation & Brand Management)  Measure the more financially tangible benefits as well as the intangible (more difficult to quantify financially, but equally important to deriving / proving value)  Drive and manage competitive advantage on a continuous basis  Meet Accountability Challenges  Evolve beyond typical marketing activity metrics to the financial and comparative performance indicators executives understand / expect  Quantify the derived business value and competitive advantage to skeptical / frugal executives and other stakeholders  Automatically deliver performance reports on a regular basis to promote continuous support / investment growth  Secure Continued Investment and Growth Funding  Quantify the value of current social investments  Predict future performance and the value derived  Justify historical spending and future allocations with quantified competitive benchmarks and ROI comparisonsValue for AgenciesThe ability for agencies to prove the ROI of their social media marketing services is critical for maintaining and growingexisting accounts, and differentiating to win new business.Competitive benchmarking, including an analysis of financial gains, engagement, risk mitigation and brand managementprovides the tool agencies need for proactive competitive and economic justification for their client social initiatives:  Provocatively Engage and Convert Prospects • Connect and engage prospects with proactive benchmark analysis reports • Quantify competitive and ROI issues with current social efforts - the “cost of doing nothing” • Implement provocative selling, creating priority / urgency 7
    • Akonna | Show Me The Money. Proving The Value of Social Media Marketing a Requirement  Quantify Value of Campaigns to Current Customers • Prove the value of agency driven social marketing campaigns to current marketer / executive customers • Tally the exact competitive advantage and ROI derived  Drive More Business with Existing Accounts • Improve up sell / cross-sell, highlighting where additional investments are needed • Justify using the ROI and competitive advantage that incremental investments can deliver • Provide regular performance report cards to prove the value of continued and incremental investments in agency efforts.Next StepsSign-Up for a Free EvaluationFollow us for the latest research, news and updates ©2011 Akonna, Social Benjamins and Compete Insights are trademarks of Akonna, Inc., in the United States. All other brands, products or service names are or may be trademarks, registered trademarks or service marks of, and used to identify, products or services of their respective owners. For more information, please visit www.akonna.com, or call 1-855-4-Akonna For the latest news on Akonna, Social Benjamins and Compete Insights visit http://blog.akonna.com 8