Getting to social roi

Getting to Social ROI Black & White and Lots of Gray #SMWsocialROI September 20, 2011

Why is social ROI needed? Especially what the ROI of the website is (if there is no way to tie back sales) Instead it’s focused on engagement, awareness, retention. 2002… “ Why do I need a website?” “ The internet isn’t going to be around forever.” “ What’s the ROI of my website if I don’t sell any products?” 2011… nobody asks those questions anymore. That said…we’ll try to give some guidance on how to evaluate Social ROI today. Remember

What this presentation isn’t… We aren’t going to give you a $$ for Social Media ROI . Just like a website, the ROI of each marketing initiative is unique to the business and the initiative itself . We are going to share methodology and process for figuring out social ROI. FREE intellectual property. Yep. Why? To advance the industry beyond this question.

Measurement Culture & Governance
To get to ROI, an organization must have a certain level of maturity with measurement
Culture of Advertising = low
Culture of Research = medium
Culture of Measurement = high
Culture of Accountability = very high
Social Media governance needs participation from leadership & SMEs in PR, Digital Comms, Market Research & Strategy, Product Mgmt, Customer Service, IT and Ops.
ROI unlikely likely

Secrets to ROI Success
Clearly defined business, marketing and consumer objectives. Yes, this is more difficult than you would believe to get marketers and agencies to take the time to do, and to do right.
Marketing: Improve usability of home page and navigation to increase clarity of the path into consideration and ultimately conversion
Consumer: Help me find what ’s new and on sale
Business: Increase store locator visits from top navigation on non-ecomm sites
Adoption, Belief, Trust: Deep understanding of objectives, and constant reminder and adherence to the objectives throughout the program by all business and agency stakeholders.
Targets/Goals: Accountability and incentives to meet defined targets/goals.

Model for Effective Social ROI #SMWsocialROI

Segment and Target Segment and Target

1. Segment & Target – Know Your Audience
Investment decisions, and the potential returns expected, should be based in a clear understanding of the portion of your market that can be effectively engaged through social media
Step 1: Develop Social Segments/Personas e.g.,

Level-set Expectations Level-set Expectations

2. Industry Will Drive ROI Possibilities High = 3, Med = 2, Low = 1 Researched Industry = high price-sensitivity, high commitment, low experience Referred Industry = low price-sensitivity, low commitment, high experience Mortage Air travel Movie Guided by Reference (Social) Guided by Research (SEO/PPC) Mortgage “Reference” Score = 1 out of 9. INDUSTRY PRICE S. LIFETIME COMMITMENT LIFETIME EXP. RESEARCH REFERENCE Mortgage 3 3 2 8 1 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0%

Set “Return” KPIs Set “Return” KPIs

3. Determine “Return” Measures ONLINE CONVERSIONS ENGAGEMENT/ADVOCACY AWARENESS/AFFINITY (w/SENTIMENT)
Register on site.
Content Likes
Avg comments/post
SoV
Purchase from site.
Content Shares
Avg retweet/post
Volume/Buzz
Comments
(Avg likes/post)/total page likes
Network Footprint (Page Likes, follows)
@ mentions
(Avg comments/post)/total
page likes
Retweets
(Avg retweet/post)/followers
Avg likes/post
Online Sales (3 - 1) Reference Level Entertainment 3 8 Apparel 3 7 "Hard" & "Soft" Social Media ROI Hotel 3 6 (Revenues, LTV-Affinity & Advocacy) Personal Care 3 6 Air travel 3 5 Furniture 2 4 Bev 1 4 Food 1 4 Appliances 2 3 Auto 2 3 Mortgage 2 2 "Soft" Social Media ROI H/A Insurance 2 2 (LTV-Affinity & Advocacy) Healthcare 1 1

Social ROI – CM Definitions
Investment (cost) comes from:
Tools
Staff & Consulting
Training
Tech & Creative
Returns can come via:
Conversions/Activity
Engagement/Advocacy
Awareness/Affinity

Measurement Approaches Measure

4. Approach #1 Conversion
Online conversions example:
1,054,000 Direct social media referrals (click-throughs to purchase CTA) 8% Conversion rate $9.99 Per conversion $842,356 Revenue Contributed $250,000 Period Project Cost (Rev Contributed – Cost) / (Cost) 237% Return on Investment

4. Approach #2 Engagement / Advocacy
What constitutes an engaged fan?
An estimator for referrals and lifetime value of customer.
Measures “actions” taken around the brand in social networks.
Comment, Like, @ Mention, Retweet
Attributes increasing value to “deeper” involvement with content:
Comment > Like
Uses ratios to normalize engagement, example (month):
40 mentions & retweets / 1000 followers = 4% engagement in Twitter
800 content likes / 24,000 page likes = 3.3% engagement in FB

4. Approach #2 Engagement / Advocacy
Engagement / Advocacy
Estimated via consumer insight research (survey) 1,500,000 Current Social Media Reach 45,000 Engaged "fans” (3%) $17.48 1.75 additional purchases at $9.99 each $786,600 Revenue $250,000 Period Project Cost (Revenue – Cost) / (Cost) 215% Return on Investment

4. Approach #3 Awareness / Affinity
Attributing value to sentiment:
A potential estimator of market share and purchase intent.
Volume = How much is being said?
Reach/Footprint = How broadly is it being viewed?
Sentiment = What is being said? Does it indicate intent to purchase or recommend?
Use survey to:
Quantify market size of SM-driven consumers,
Determine social media impact on purchase intent, and
Correlate opinion impact on purchase intent.
Monitor sentiment & tag social media content Primary research: determine impact of SM on PI Estimated Change in PI based on change in content + =

4. Approach #3 Awareness / Affinity
Estimate potential sales through changes in sentiment
Results from survey/focus group:
60% of people within reach via social media would buy based on social media.
74% of those people are currently indifferent between our product and competitors’.
Among “ indifferents ” perception of increased positive conversation about brand in their networks has the following impact :
Example purchase intent, actuals to be calculated by client. If sentiment increases… Likelihood to buy increases… 0% - 2% 0% 3% - 6% 5% 7% - 10% 7% 11% - 20% 12%

4. Measurement #3 Awareness / Affinity
Awareness / Affinity
1,500,000 Current Social Media Reach 900,000 Current Social Media Addressable Market (60% - from survey) 666,000 Currently Indifferent (74% of the addressable 60%) 12% Positive Sentiment Increase 79,920 Added potential buyers $798,401 Revenue Increase at $9.99 each $250,000 Period Project Cost (Revenue – Cost) / (Cost) 219% Return on Investment

Optimize Optimize

Optimize
Social Media Content & Engagement Approach
Social + Web Integration points (A/B)
If targets were missed:
Measurement data is baseline to re-evaluate the “reality” of return expectations, focus on highest-return approaches/channels, and set the associated investment levels
If targets were reached:
Measurement data sets benchmarks for new objectives, improves on or decommissions lower-return approaches/channels, and guides subsequent investment levels.

Social Media Optimization Process
Strategy, Technology, Analysis.
Develop
Current State Analysis
Optimization Strategy - Objectives & KPIs
Test Business Requirements
Detailed Test Design
Creative Reviews
Software integration (Awareness, Optimost, NextStage Evolution, etc)
Implementation
Run Test
Analysis & Recommendations for next test
Discovery Design Delivery Definition Team & Program Management

Drumroll… Governance

So is social ROI worth the effort?
Points to ponder…
What is the ROI of figuring out Social ROI ? When does it become diminishing returns?
(http://www.quora.com/What-is-the-Return-on-Investment-of-measuring-social-media-ROI)
Is it best to let the Universities and PhD’s focus on this problem, while instead marketers focus on optimization of content in the space instead with their $?
Are these models close enough to be indicative of ROI – enough to justify the budget?
Will you have enough budget to staff a measurement and social media team to ensure you get this ROI? And how do they impact that overall ROI?

Questions @shainaboone @scotwheeler

Thank You

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Getting to social roi

by Critical Mass on Sep 20, 2011

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Getting to social roi — Presentation Transcript