Social Media Measurement and ROI
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Social Media Measurement and ROI

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Sara Meaney of Hanson Dodge Creative presented insights on how to calculate the ROI of social media and the thinking behind what to measure and how to measure the right marketing objectives to derive ...

Sara Meaney of Hanson Dodge Creative presented insights on how to calculate the ROI of social media and the thinking behind what to measure and how to measure the right marketing objectives to derive value from your efforts.

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    Social Media Measurement and ROI Social Media Measurement and ROI Presentation Transcript

    • HDC / Making the world more SOCIAL MEDIA + PR active. Social Media Measurement and the Real Meaning of ROI©Copyright Hanson Dodge Creative. All Rights Reserved. 1
    • HDC / Making the world more SOCIAL MEDIA + PR active. Sara Meaney Hanson Dodge Creative Partner | VP Social Media + PR October 11, 2011 @SaraMeaney©Copyright Hanson Dodge Creative. All Rights Reserved. 2
    • HDC / Making the world more SOCIAL MEDIA + PR active. Overview •Defining ROI •Define objectives •Measure them •Case studies •Tools •Q&A©Copyright Hanson Dodge Creative. All Rights Reserved. 3
    • HDC / Making the world more SOCIAL MEDIA + PR active. Defining ROI©Copyright Hanson Dodge Creative. All Rights Reserved. 4
    • HDC / Making the world more SOCIAL MEDIA + PR active. What ROI is NOT •# Fans •# ReTweets •Total Impressions •# Post views, clicks, likes, comments or burps •These are key METRICS. But they are not ROI.©Copyright Hanson Dodge Creative. All Rights Reserved. 5
    • HDC / Making the world more SOCIAL MEDIA + PR active. What did you invest?©Copyright Hanson Dodge Creative. All Rights Reserved. 6
    • HDC / Making the world more SOCIAL MEDIA + PR active. What did you get in return?©Copyright Hanson Dodge Creative. All Rights Reserved. 7
    • HDC / Making the world more SOCIAL MEDIA + PR active. What will your !"#$%&#$&(#%)#*+,# "-#%.(#/("0.&1#2)3.&4# answer be? %.56#"-#$%.0%#7"8# (9)&:;#©Copyright Hanson Dodge Creative. All Rights Reserved. 8
    • HDC / Making the world more SOCIAL MEDIA + PR active. We don’t work in a vacuum©Copyright Hanson Dodge Creative. All Rights Reserved. 9
    • HDC / Making the world more SOCIAL MEDIA + PR active. Purchase decisions are complex©Copyright Hanson Dodge Creative. All Rights Reserved. 10
    • HDC / Making the world more SOCIAL MEDIA + PR active. Decision funnel (old)©Copyright Hanson Dodge Creative. All Rights Reserved. 11
    • HDC / Making the world more SOCIAL MEDIA + PR active. Decision funnel (new)©Copyright Hanson Dodge Creative. All Rights Reserved. 12
    • HDC / Making the world more SOCIAL MEDIA + PR active. Defining objectives©Copyright Hanson Dodge Creative. All Rights Reserved. 13
    • HDC / Making the world more SOCIAL MEDIA + PR active. What’s the point? How will you know if you succeeded? What are you trying to do? How will you measure it? You can’t do everything. Focus.©Copyright Hanson Dodge Creative. All Rights Reserved. 14
    • HDC / Making the world more SOCIAL MEDIA + PR active. Defining social media objectives Augie Ray Forrester Research©Copyright Hanson Dodge Creative. All Rights Reserved. 15
    • HDC / Making the world more SOCIAL MEDIA + PR active. Financial objectives Revenue Cost©Copyright Hanson Dodge Creative. All Rights Reserved. 16
    • HDC / Making the world more SOCIAL MEDIA + PR active. Increase Revenue •Increased product sales •Increased ancillary service sales©Copyright Hanson Dodge Creative. All Rights Reserved. 17
    • HDC / Making the world more SOCIAL MEDIA + PR active. Decrease •Reduction in customer acquisition costs cost •Reduction in customer service cost •Reduction in cost to innovate •Reduction in returns©Copyright Hanson Dodge Creative. All Rights Reserved. 18
    • HDC / Making the world more SOCIAL MEDIA + PR active. Brand objectives •Awareness •Sentiment •Word of mouth •Loyalty •Recruitment / Talent retention©Copyright Hanson Dodge Creative. All Rights Reserved. 19
    • HDC / Making the world more SOCIAL MEDIA + PR active. Risk management objectives •Reduction in exposure to risk •Improvement in response effectiveness •Speed of response©Copyright Hanson Dodge Creative. All Rights Reserved. 20
    • HDC / Making the world more SOCIAL MEDIA + PR active. Digital objectives •Enhanced owned and earned assets •Search / findability©Copyright Hanson Dodge Creative. All Rights Reserved. 21
    • HDC / Making the world more SOCIAL MEDIA + PR active. Measurement©Copyright Hanson Dodge Creative. All Rights Reserved. 22
    • HDC / Making the world more SOCIAL MEDIA + PR active. What’s everyone else measuring?©Copyright Hanson Dodge Creative. All Rights Reserved. 23
    • HDC / Making the world more SOCIAL MEDIA + PR active. Measurement models •PR / Advertising model •CLV (Customer Lifetime Value) •SEO model •Customer service / satisfaction©Copyright Hanson Dodge Creative. All Rights Reserved. 24
    • HDC / Making the world more SOCIAL MEDIA + PR active. Pick an objective. Measure it. •Identify / agree on key success metrics for this objective •Establish baseline levels •Track change •Ensure comprehensive measurement from all available data points©Copyright Hanson Dodge Creative. All Rights Reserved. 25
    • HDC / Making the world more SOCIAL MEDIA + PR active. “Can we literally sell our product or service via social media Objective: channels?” Sell more product / service YES NO Integrate purchase functionality into your social Maybe your budget or channels: technology does not allow. F-Commerce module, mobile storefront application, tracking codes, e-commerce, cookies, etc. So what CAN you do to influence purchasing Measure sales volume and behavior? calculate ROI based on cost to sell.©Copyright Hanson Dodge Creative. All Rights Reserved. 26
    • HDC / Making the world more SOCIAL MEDIA + PR active. Identify success metrics •Let’s pick “Increase Product Awareness” •What data points would indicate success on this objective? ✓Shares of product assets (images, video, etc.) ✓Online customer reviews of product ✓Traffic to product information page ✓Social comments, likes about product ✓Product mentions in third party media©Copyright Hanson Dodge Creative. All Rights Reserved. 27
    • HDC / Making the world more SOCIAL MEDIA + PR active. Measure it • What were the baselines before social media initiatives? • Have there been other additions to the marketing mix? • What other factors could contribute to potential increases or decreases?©Copyright Hanson Dodge Creative. All Rights Reserved. 28
    • HDC / Making the world more SOCIAL MEDIA + PR active. r ________ ) CLV: CLV = GC x ( Customer 1+d-r Lifetime Value GC: Gross contribution per customer r: annual retention rate (as a percentage) d: Discount rate, or cost of capital for the future value of a customer. Often roughly estimated w/ current interest rate. *This equation is a good estimate but doesn’t take into consideration costs to maintain a customer and assumes constant values for each variable. More complex CLV equations are required.©Copyright Hanson Dodge Creative. All Rights Reserved. 29
    • HDC / Making the world more SOCIAL MEDIA + PR active. r ________ ) CLV: CLV = GC x ( Customer 1+d-r Lifetime Value GC = $50 per widget r = 80% d = 2.75% Then CLV = $175.82 You spent $100,000 to acquire 2,500 new customers through traditional channels. Cost per acquisition = $40 Customer acquisition ROI = ($175.82 - $40)/$40 = 339.5%©Copyright Hanson Dodge Creative. All Rights Reserved. 30
    • HDC / Making the world more SOCIAL MEDIA + PR active. r ________ ) CLV: CLV = GC x ( Customer 1+d-r Lifetime Value GC = $50 per widget r = 80% d = 2.75% Then CLV = $175.82 You spent $75,000 to acquire 2,500 new customers through social media channels. Cost per acquisition = $30 Customer acquisition ROI = (175.82 – 30)/30 = 486.1%©Copyright Hanson Dodge Creative. All Rights Reserved. 31
    • HDC / Making the world more SOCIAL MEDIA + PR active. Simple calculation©Copyright Hanson Dodge Creative. All Rights Reserved. 32
    • HDC / Making the world more SOCIAL MEDIA + PR active. Simple calculation (Sales – Investment) ÷ Investment = %ROI Sales = $ sold via that channel or due to that channel Investment = all $ costs related to acquiring the sale: development + design of platform, time to manage or staff it, maintenance costs, advertising to drive awareness of channel, etc.©Copyright Hanson Dodge Creative. All Rights Reserved. 33
    • HDC / Making the world more SOCIAL MEDIA + PR active. Complex calculation©Copyright Hanson Dodge Creative. All Rights Reserved. 34
    • HDC / Making the world more SOCIAL MEDIA + PR active. Complex calculation (Revenue – Investment) ÷ Investment = %ROI Revenue = $ attributed to sales from leads through or assisted by social media Investment = all $ costs related to acquiring the sale: assign relevant costs to each level of lead nurturing required to close sale. Must include additional marketing, CRM, proposal development, presentation time, customer service activities, etc.©Copyright Hanson Dodge Creative. All Rights Reserved. 35
    • HDC / Making the world more SOCIAL MEDIA + PR active. Case Studies©Copyright Hanson Dodge Creative. All Rights Reserved. 36
    • HDC / Making the world more SOCIAL MEDIA + PR active. Customer service • Used Helpstream (defunct) as CS portal • Before: 1 rep to 55 customers, 77% satisfaction rating • After: 1 rep to 172 customers, 87% satisfaction rating • Cost reduction: $millions • Satisfaction rating: up 13%©Copyright Hanson Dodge Creative. All Rights Reserved. 37
    • HDC / Making the world more SOCIAL MEDIA + PR active. Cisco social product launch •Comprehensive launch program for a new router -Second Life -Facebook -3D gaming -Social news releases -YouTube -Blog -Video conference -Tech Community -Mobile datasheet©Copyright Hanson Dodge Creative. All Rights Reserved. 38
    • HDC / Making the world more SOCIAL MEDIA + PR active. Launch costs • 9,000 people attended virtually – 90x more attendees than in the past • Saved 42,000 gallons of gas • 300% more media coverage than traditional outreach methods • More than 1,000 blog posts and 40 million online impressions • 1/6 the cost of a traditional launch • Saved $100,000©Copyright Hanson Dodge Creative. All Rights Reserved. 39
    • HDC / Making the world more SOCIAL MEDIA + PR active. Objective: Increase brand awareness for Wilson Basketball and its NCAA Brand Tournament affiliation awareness Success Metrics: Impressions Engagement Community Growth Conversion to website©Copyright Hanson Dodge Creative. All Rights Reserved. 40
    • HDC / Making the world more SOCIAL MEDIA + PR active. Success Metrics: Impressions Engagement Community Growth Conversion to website Brand Outcomes: awareness -50 million Facebook Impressions in 24 days. -Product page website traffic up 44% over previous month and 77% over March 2010. -Facebook became #2 source of all traffic to Wilson.com/ Basketball, after Wilson.com -Community grew from 0 to 23,200 in 24 days. -Feedback avg of .45% outpaced Facebook average .29% by 150% )2/(((% Visits to Wilson.com/Basketball (all traffic 2011 vs. 2010) )/(((% )(/(((% 4/(((% !"#"$#%&%())*%+,-*%./01% !"#"$#%&%()(% !"#"$#%&%())% 3/(((% 2/(((% /(((% (% 567% 8,9% :6;% <-;% :6=% 5>7% 5>?% <>@% +,-% AB$% CDE% F,B%©Copyright Hanson Dodge Creative. All Rights Reserved. 41
    • HDC / Making the world more SOCIAL MEDIA + PR active. Tools©Copyright Hanson Dodge Creative. All Rights Reserved. 42
    • HDC / Making the world more SOCIAL MEDIA + PR active. Aggregated metrics • Most tools make gathering and processing easier • Some include distribution • Some include analysis • Some make pretty pictures • They (nearly) all cost money©Copyright Hanson Dodge Creative. All Rights Reserved. 43
    • HDC / Making the world more SOCIAL MEDIA + PR active. Want vs. need • Search / Aggregate mentions • Moderate conversation • Schedule / Publish content • Engagement management • Measure / Analyze • Language / Translation • Gamification / sweepstakes tools • Pricing model©Copyright Hanson Dodge Creative. All Rights Reserved. 44
    • HDC / Making the world more SOCIAL MEDIA + PR active. Want vs. need©Copyright Hanson Dodge Creative. All Rights Reserved. 45
    • HDC / Making the world more SOCIAL MEDIA + PR active. No one-button solution©Copyright Hanson Dodge Creative. All Rights Reserved. 46
    • HDC / Making the world more SOCIAL MEDIA + PR active. Constant change©Copyright Hanson Dodge Creative. All Rights Reserved. 47
    • HDC / Making the world more SOCIAL MEDIA + PR active. 10 Metrics to watch 1.Leads generated 2.Website bounce rate 3.Website behavior 4.Growth of active network / engaged base 5.Brand mentions across social platforms 6.Website visitors and sources of traffic 7.Conversion: subscriptions, email lists, etc. 8.Time spent engaging: apps, time on site, etc. 9.Engagement ratio: active network / total network 10.Viral engagement: sharing, “people talking”©Copyright Hanson Dodge Creative. All Rights Reserved. 48
    • HDC / Making the world more SOCIAL MEDIA + PR active. MAKING THE WORLD MORE ACTIVE. ™ Hanson Dodge Creative is relentless about pushing the boundaries of engagement to deliver integrated solutions that work. Contact: Sara Meaney Partner | VP Social Media + PR©Copyright Hanson Dodge Creative. All Rights Reserved. Twitter: @sarameaney