The Power of Social Media: An Opportunity to Build Better Businesses
Social Media ROI
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
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3. Over seven years of social media experience
June 2009 Altimeter
March 2008 recognized Dell Dell
February 2007 Accepted Solutions Global Twitter with “Open named
February 2006 IdeaStorm launched launched on Community revenues of Leadership Award the No.
A voting based site allowing $6.5 M for Innovation and
Michael 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 social
bloggers 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 Facebook
August 2006 helpful tips and tricks. Eventually
launched within each of
expanding this into the YouTube April 2008
Blog outreach The first investor the new Dell
channel making sharing easier. Inside IT launched June 2010
expanded beyond relations blog by a Blog focused on business Business units
public company. CAP Days launched
tech Support customers, and Cloud In-person events for vocal
Computing. online customers
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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
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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
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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
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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
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8. 8 Global Marketing
Natalie 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.
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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
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Natalie Kortum & Brian Melinat
11. Question Remains: “How does this impact my P&L?”
“So What?”
11 Global Marketing
Natalie 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…
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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
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14. Direct Attribution has a big downfall
• Direct = All or Nothing
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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
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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
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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 Attribution
Natalie 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 figures
Natalie 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
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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
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Natalie 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
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25. Questions?
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26. Introducing SNAP
Social Net Advocacy Pulse
Drill-down and
Aggregated Targeted
Uncover
Metric Listening
insights
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27. Thank You
Natalie Kortum - marketingmathgirl.com
Brian 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