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Social Media ROI

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Presented at eMetrics Conference, Toronto, March 2012

Presented at eMetrics Conference, Toronto, March 2012


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  • 1. Social Media ROI Measurement “The Good, the Bad & the Ugly”• eMetrics Conference - Toronto• March 2012 Natalie Kortum - marketingmathgirl.com Brian Melinat - @BrianMelinat
  • 2. Dell’s Online Heritage: Critical Enabler Leader in online First company to frictionless First to sell complex hit $1M a day in commerce from configurable items online revenue order to delivery One of the first One of the first companies to Early adopter of to launch online launch online social media discussion forums support 2Natalie Kortum & Brian Melinat 2
  • 3. Over seven years of social media experience June 2009 Altimeter March 2008 recognized Dell Dell February 2007 Accepted Solutions Global Twitter with “Open namedFebruary 2006 IdeaStorm launched launched on Community revenues of Leadership Award the No. A voting based site allowing $6.5 M for Innovation andMichael Dell asked customers and others to Dell France begins Online May 2008 1 most Community Outreach Execution”Why don’t we reach out and help submit ideas for Dell. Dell Outlet achieved socialbloggers with tech support issues? October 2007 $0.5M in sales via Twitter brand Michael Dell quoted in Business March December 2006 Week 2010 Ratings and In response to Jeff Jarvis question around Dell whether companies want to be part of the January 2009 joins reviews launched online conversation: ”My argument is you December 2010 Dell Organizes June 2009 Sina on Dell.com absolutely do. You can learn from them. You Social Media can improve your reaction time. And you can into four $2M+ Sales Weibo Listening be a better company by listening and being customer via Twitter in Command involved in that conversation.” focused China Center launched business units 2006 2007 2008 2009 2010 2011 2012 Social Media & July 2006 Community June 2007 2009 University (SMaC U) Direct2Dell launched Today Direct2Dell exists in Dell joined Twitter June 2008 Dell TechCenter launched English, Spanish, Norwegian, Channel 5,000 team EmployeeStorm January Spring 2009 members trained by 6 Awards for the Japanese and Chinese. blog December launched 2008 Members of end of year Social Media Listening launched 2009 Internal Blogs Launched Dell aligns Community Command Center Huffington January 2007 for Employees. organization and Post Blog StudioDell launched November 2007 for success Conversations B2B pages on Dell’s video and podcast site, with DellShares deployed FacebookAugust 2006 helpful tips and tricks. Eventually launched within each of expanding this into the YouTube April 2008Blog outreach The first investor the new Dell channel making sharing easier. Inside IT launched June 2010expanded beyond relations blog by a Blog focused on business Business units public company. CAP Days launchedtech Support customers, and Cloud In-person events for vocal Computing. online customers 3 Global MarketingNatalie Kortum & Brian Melinat 3
  • 4. Easier Advanced KPIs/ Direct Neural Net Dashboards Attribution Modeling • Scorecarding/ • Comparison of • Strategic tracking Social Social Media to Modeling to Media progression non-Social Media understand customers Revenue impacts The Good The Bad The Ugly 4Natalie Kortum & Brian Melinat
  • 5. Social Media Analytics usually start with basic tracking metrics Social Media Analytics Phase I • Convincing the business that Social Media participation is “valuable” or worthwhile • Answering Exec question: “Why should we be investing in Social Media?” • Intuitively, we know there is Business Value in: – Engaging customers to develop relationships – Providing service/support via social channels – Listening to social for issue early detection – And more… • As analysts, we need to provide quantified insights http://trackandfieldathletesassociation.org/blog/wp-content/uploads/2012/05/Track-Starting-Blocks.jpg 5 Global MarketingNatalie Kortum & Brian Melinat
  • 6. These core Social Media metrics often provide the foundation in Social Media analytics Number of Fans and Engagement Followers Traffic Delivered to Company Conversation Volume Website Reach Share of Voice Sentiment Trends Over Time 6 Global MarketingNatalie Kortum & Brian Melinat
  • 7. Most companies today recognize the value of Social Media and are familiar with (and likely track) the core metrics Number of Number of Corporate Facebook Pages Corporate Twitter Accounts Companies Companies % % by Industry* by Industry* w/Twitter w/Facebook Pages Accounts Aerospace and Defense 10/14 71% Aerospace and Defense 12/14 86% Chemicals 9/17 53% Chemicals 13/17 76% Commercial Banks 14/20 70% Commercial Banks 15/20 75% Food Consumer Products 12/14 86% Food Consumer Products 13/14 93% Insurance: Property and Casualty (Stock) 11/16 69% Insurance: Property and Casualty (Stock) 13/16 81% Motor Vehicles and Parts 7/16 44% Motor Vehicles and Parts 7/16 44% Specialty Retailers 25/28 89% Specialty Retailers 24/28 86% Telecommunications 12/15 80% Telecommunications 12/15 80% Utilities: Gas and Electric 11/22 50% Utilities: Gas and Electric 16/22 73% Fortune 500 332/500 66% Fortune 500 365/500 73% *Umass Dartmouth Study: http://www.business2community.com/social-media/fortune-500-companies-increase-social-media-use-0275757 7 Global MarketingNatalie Kortum & Brian Melinat
  • 8. 8 Global MarketingNatalie Kortum & Brian Melinat http://www.mining-technology.com/projects/platmin/platmin2.html
  • 9. Scorecard Example – Tracking Your Social Media Efforts Consolidating data on various core Social Media metrics in a regularly reported “Scorecard” can help a company monitor/track its Social Media activity. 9 Global MarketingNatalie Kortum & Brian Melinat
  • 10. Easier Advanced KPIs/ Direct Neural Net Dashboards Attribution Modeling • Scorecarding/ • Comparison of Social • Strategic Modeling tracking Social Media Media to non-Social to understand progression Media customers Revenue impacts The • Easy, fast and inexpensive Good • Customer-centric • Difficult to compare The Bad with non-Social Media activity The • Not tied to P&L Ugly metrics Not tied to P&L 10Natalie Kortum & Brian Melinat
  • 11. Question Remains: “How does this impact my P&L?” “So What?” 11 Global MarketingNatalie Kortum & Brian Melinat http://www.kpua.net/images/2006hoolaulea/crowd2_full.jpg
  • 12. Comparing Social Media Customers with Non-Social Media Customer Can Help Quantify Social Media Value “Traditional” Business KPIs Conversion Rate Cost of Acquisition Spend Social vs Non-Social Margin % Customers CLV (Customer Lifetime Value) Etc… 12 Global MarketingNatalie Kortum & Brian Melinat
  • 13. Example of measuring the value of a Facebook Fan Company’s Customers Facebook Fan Not Facebook Fan $1111 -$888 $223 Incremental Value of Facebook Fan* Annual Spend $1111 $888 *Numbers for illustrative purposes; not actual Dell figures 13 Global MarketingNatalie Kortum & Brian Melinat
  • 14. Direct Attribution has a big downfall • Direct = All or Nothing 14 14 Global MarketingNatalie Kortum & Brian Melinat
  • 15. Direct Attribution has a big downfall • Direct = All or Nothing Traditionally Understated Traditionally Overstated Social Media Coupons Brand Campaigns Online Promotion/Referral Events Sales Corporate Social Responsibility Transactional Actions 15 Global MarketingNatalie Kortum & Brian Melinat 15
  • 16. Easier Advanced KPIs/ Direct Neural Net Dashboards Attribution Modeling • Scorecarding/ • Comparison of Social • Strategic Modeling tracking Social Media Media to non-Social to understand progression Media customers Revenue impacts The • Easy, fast and • Dollarize impact inexpensive • Easy to explain Good • Customer-centric • Difficult to compare • Overstates and The Bad with non-Social Media activity Understates certain levers The • Not tied to P&L • Misrepresentation Ugly metrics sometimes occurs Not tied to P&L Easy to Explain 16Natalie Kortum & Brian Melinat
  • 17. Introducing Neural Net Modeling 17Natalie Kortum & Brian Melinat
  • 18. Social Media is only one of 400 variables considered. Global MarketingNatalie Kortum & Brian Melinat 18
  • 19. Human Brain Network Global MarketingNatalie Kortum & Brian Melinat 19
  • 20. Direct Attribution understates the value of Social Media $600 Revenue impact per fan per year • Includes “word of $500 mouth” influence • More than twice as $400 large as direction $300 attribution $565 $200 *Numbers for illustrative purposes; not actual Dell figures $100 $223 $0 Neural Net Direct AttributionNatalie Kortum & Brian Melinat 20
  • 21. How does social media compare to other investment options? If $1 M additional were available to invest, what’s the marginal ROI? Marketing Marketing Sales Pricing Social Media Demand Gen Brand Marginal Return 4.1 X on Investment 0.9 X 1.3 X 0.4 X 2.2 X *Numbers for illustrative purposes; not actual Dell figuresNatalie Kortum & Brian Melinat 21
  • 22. Neural Net: Want to calculate your program’s ROI? Ensure you are setup to have data that can last 2+ years. • Data retention plan • Categorization that will last over the long-term • Ensure Model-ready data. (Ask your Decisions Sciences org.) • Collect costs associated with your project 22 Confidential 3/25/2013 Global MarketingNatalie Kortum & Brian Melinat 22
  • 23. Easier Advanced KPIs/ Direct Neural Net Dashboards Attribution Modeling • Scorecarding/ • Comparison of Social • Strategic Modeling tracking Social Media Media to non-Social to understand progression Media customers Revenue impacts • Considers full The • Easy, fast and • Dollarize impact impact (“assists”). inexpensive • Easy to explain • Comparison against Good • Customer-centric other investments • Difficult to compare • Overstates and • Requires over two The Bad with non-Social Media activity Understates certain levers years of data. • Difficult to explain The • Not tied to P&L • Misrepresentation • Very time- consuming and Ugly metrics sometimes occurs costly Not tied to P&L Easy to Explain Costly 23Natalie Kortum & Brian Melinat
  • 24. Easier Advanced KPIs/ Direct Neural Net Dashboards Attribution Modeling • Scorecarding/ • Comparison of Social • Strategic Modeling tracking Social Media Media to non-Social to understand progression Media customers Revenue impacts • Considers full The • Easy, fast and • Dollarize impact impact (“assists”). inexpensive • Easy to explain • Comparison against Good • Customer-centric other investments • Difficult to compare • Overstates and • Requires over two The Bad with non-Social Media activity Understates certain levers years of data. • Difficult to explain The • Not tied to P&L • Misrepresentation • Very time- consuming and Ugly metrics sometimes occurs costly Not tied to P&L Easy to Explain Costly 24Natalie Kortum & Brian Melinat
  • 25. Questions? 25 Confidential 3/25/2013 25 Global MarketingNatalie Kortum & Brian Melinat
  • 26. Introducing SNAP Social Net Advocacy Pulse Drill-down and Aggregated Targeted Uncover Metric Listening insights 26 Global MarketingNatalie Kortum & Brian Melinat
  • 27. Thank YouNatalie Kortum - marketingmathgirl.comBrian Melinat - @BrianMelinat For more information on Dell’s Social Media Services: Please visit: www.dell.com/socialmediaservices Or email: Eric_Nystrom@dell.com (Dir. Social Services Sales) and/or SMServices@Dell.com