How to Calculate the ROI of a Social Media Campaign
Social Media ROI  Hey, kids! Want toknow how to calculate the ROI of a social                        •   Many companies ar...
Introductions                                             Hey, look! Our logos •   But first, a little background --       ...
Introductions       • Who is BKV? Glad you asked       • BKV creates direct response, social         media, mobile media, ...
Social Media ROI• Our story begins in a company that’ eerily similar to                                      s  your compa...
Social Media ROI                             Barbara is going • The challenge most        to love all these   companies fa...
Social Media ROI                                    OMG! We did all that                                   work and all yo...
Social Media ROI•   Barbara, being the CLV whiz that she is, knows that the    average customer spends $80 per month with ...
Social Media ROI•   Barbara’s lawn care    company uses direct mail    as its primary marketing        Damn. Barbara    to...
Social Media ROI                              •   Barbara knows that if she               Once again,        gets 1 new cu...
Social Media ROI                                   How can I       Fortunately, I                                  calcula...
Social Media ROI I’m off to re- connect with my old flame,                           Hmmm. I wonder Stone Steele.         ...
Social Media ROIOnce Barbara is inStone’s lab, she hits   Stone, we’re trying tohim up with the          calculate the ROI...
Social Media ROI               Calculating the ROI of a            social media campaign is easy.             But more imp...
Social Media ROI• Barbara’ direct mail budget is           s  $2.8 million per year. She knows  that if she uses that to s...
Social Media ROI• Stone explained that in order                   YouTube  to track the leads generated  from her social m...
She’ probably                                                      s                                                   won...
Social Media ROI                                  I think Bob’                                             s              ...
Social Media ROI• Jamie’ book, “How to Make Money        s  with Social Media” is available at  Borders, 800CEORead.com, A...
www.60SecondMarketer.com
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Social Media ROI: How to Tell if Your Social Media Campaign is Making Money

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Social Media ROI -- it's something everyone is interested in, but very few people know how to calculate. You can learn everything you need to know about social media ROI in this innovative PDF created and designed by Jamie Turner, Chief Content Officer of the 60 Second Marketer and co-author of "How to Make Money with Social Media."

Published in: Business, Technology

Social Media ROI: How to Tell if Your Social Media Campaign is Making Money

  1. 1. How to Calculate the ROI of a Social Media Campaign
  2. 2. Social Media ROI Hey, kids! Want toknow how to calculate the ROI of a social • Many companies are still trying to media campaign? figure out how to measure their social media return-on-investment • Jamie Turner, the co-author of “How to Make Money with Social Media,” covers this topic in detail in his book • Which, oh by the way, is available at fine bookstores (and a few crappy ones) everywhere • Here’s a quick snapshot of the method he outlines in “How to Make Money with Social Media”
  3. 3. Introductions Hey, look! Our logos • But first, a little background -- are on this page. What a coincidence! Jamie is the Chief Content Officer for the 60 Second Marketer, the online magazine for BKV Digital and Direct Response • He also writes for Mashable and is invited to speak about social media, mobile media and branding on TV, radio and at industry events around the globe
  4. 4. Introductions • Who is BKV? Glad you asked • BKV creates direct response, social media, mobile media, email, paid search and other campaigns for clients like AT&T, Caterpillar, The Home Depot, Mercedes-Benz and Six Flags • Okay, enough about us. Let’ talk s about how you can calculate your social media ROI
  5. 5. Social Media ROI• Our story begins in a company that’ eerily similar to s your company• And when we say “eerily similar,” we mean the “Are these people watching me?” kind of eery• But fear not. We’re not watching you. We just know that what takes place in our story is happening at corporations around the globe• You see, many social media practitioners have a problem -- they launched their social media campaigns without tracking the three M’ : Metrics, Measurement and ... a s third M-word that we’ll come up with later
  6. 6. Social Media ROI Barbara is going • The challenge most to love all these companies face with YouTube views. Can you say social media is that “Promotion”? they can track quantitative metrics like page views, blog s comments, Facebook YouTube View Likes and re-tweets... • But they can’t track the ROI of their social media campaigns
  7. 7. Social Media ROI OMG! We did all that work and all you can tell me is that we got 12,573• In order to calculate the ROI YouTube visits? of a social media campaign, you have to understand the No wonder I keep concept of Customer Lifetime you in a cubicle. Value (CLV) You are still in a cubicle, aren’t you?• CLV is the amount of revenue a typical customer will generate for your company during his or her engagement with your brand• Barbara, the CEO of Barb’ s Lawn Care, understands this concept• Unfortunately, Bob, of YouTube chart fame, does not
  8. 8. Social Media ROI• Barbara, being the CLV whiz that she is, knows that the average customer spends $80 per month with her company and that they typically stay with them for 3 years• So her Customer Lifetime Value is $2,880. $80 per month x 12 months x 3 years = $2,880• This raises another question -- how many marketing dollars should Barbara spend to acquire a customer that generates $2,880 for her company?• A good starting point is 10% of her CLV• In Barbara’ case, she’d spend $2,880 x 10% = $288 to s acquire a new customer• This $288 is called her Allowable Cost Per Sale (CPS)
  9. 9. Social Media ROI• Barbara’s lawn care company uses direct mail as its primary marketing Damn. Barbara tool hated my YouTube chart. Is it time for• She spends $1.44 on each brunch yet? I need direct mail piece they a drink. send out• Barbara’s conversion rate on her direct mail campaign is 0.5%• So, for every 200 direct mail pieces she sends out, she gets 1 new customer
  10. 10. Social Media ROI • Barbara knows that if she Once again, gets 1 new customer for Bob confused every 200 pieces she YouTube sends out, and each piece visits with actual ROI. costs $1.44 to print and mail, then her Cost Per No wonder he drinks. Sale is $288 • 200 direct mail pieces x $1.44 each = $288 = 1 new customer • That matches her Allowable Cost Per Sale exactly!
  11. 11. Social Media ROI How can I Fortunately, I calculate the know just who ROI of my to turn to for campaign? the answer! • However, in order to accurately calculate the ROI of her social media campaign, Barbara is going to have to find someone who can help her tie it in to her Customer Lifetime Value
  12. 12. Social Media ROI I’m off to re- connect with my old flame, Hmmm. I wonder Stone Steele. what this glowing green goop tastes like. Stone Steele ... the only guy man enough for Barbara’s love
  13. 13. Social Media ROIOnce Barbara is inStone’s lab, she hits Stone, we’re trying tohim up with the calculate the ROI ofbig question... our social media campaign. Will it require a super-human effort to figure that out?
  14. 14. Social Media ROI Calculating the ROI of a social media campaign is easy. But more important, what do you think of my pecks? Can you tell I’ve been working out? • Barbara soon found out that Stone was still the egomaniac he’d always been • Even so, she listened intently as he explained how to calculate the ROI of a social media campaign
  15. 15. Social Media ROI• Barbara’ direct mail budget is s $2.8 million per year. She knows that if she uses that to send out 2,000,000 direct mail pieces, she’ll Even if the social get 10,000 new customers each media campaign year only generated 800 new customers,• If she slices off 10% of that $2.8 that’ okay because s million budget and uses it for a results would social media campaign, the social improve each year media campaign would have to generate 1,000 new customers for it to match the success of the direct mail campaign
  16. 16. Social Media ROI• Stone explained that in order YouTube to track the leads generated from her social media Facebook Twitter campaign, Barbara would have to use the hub-and-spoke system• All of the social media spokes Barb’ s would drive leads to the Lawn Care Email Blog landing page on her website Landing Page• From there, she could track how many prospects converted to actual customers• Bingo. Barbara now had a way SlideShare E-Newsletter to track and measure the ROI of her campaign LinkedIn
  17. 17. She’ probably s wondering ifSocial Media ROI that’ a rabbit s in my pocket. He may be an egomaniac, but he’ s my egomaniac. Now that Barbara had a way to track the ROI of her social media campaign, she could get back to the task at hand - rekindling her love affair with Stone Steele.
  18. 18. Social Media ROI I think Bob’ s YouTube charts are just dreamy.Meanwhile, back at the office And Bob’ pretty s dreamy, too. The end, almost ...
  19. 19. Social Media ROI• Jamie’ book, “How to Make Money s with Social Media” is available at Borders, 800CEORead.com, Amazon and Barnes & Noble• You also can contact him for speaking engagements via his email address at Jamie.Turner@60SecondMarketer.com• You can download this presentation at 60SecondMarketer.com/SocialROI• And, of course, you’ll also want to find out about BKV Digital and Direct Response, which generates a 10:1+ ROI on most campaigns it develops for large brands around the globe
  20. 20. www.60SecondMarketer.com
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