Agenda• Why should we care about ROI?• Social Media ROI today• Better ways to measure ROI?• Class Exercise
Why is ROI important? • If you can’t measure it, you can’t manage it. • “82% of marketers say their executive management expects every campaign to be measured.” (source: ifbyphone 2011 State of Marketing Measurement Report) • Marketing budgets are correlated to ROI.
Social Media ROI Today:What’s so hard about it? “ROI intrinsically implies that you want to take out more than you put in. Social Media is about freely sharing with no strings attached. It’s a paradoxical relationship...”! " " " "- Rob Kozinets, Jan 11, 2012! ROI = company gets more than company gives ≠ sharing freely = Social Media
Social Media ROI Today:The Stats• Measuring ROI was the leading challenge for Social Media Marketers in 2010 & 2011.
Social Media ROI Today:Quotable Notables
Social Media ROI Today:Current Metrics Source: The ROI of Social Media, MDG Advertising
Social Media ROI Today:The big “But” Bu!. . . • Short term vs. long term • Quantitative benefits vs. qualitative benefits
Turn your thinking upside down Traditional ROI= (new sales) or (cost savings) ROI= (new fans) x (leap of faith) investment investment Problem: short term & incomplete. Problem: blatant ignoranceFodor, 2010 Hoffman & Company Returns = Customer Investments (behaviors + $) Customer Behaviors Key Marketing Objectives Key Marketing Objectives 1) Awareness, 2) Engagement, 3) WOM
Determine your Objectives• Know what you want out of a campaign before you try to measure it.
Key Marketing Objectives
From Fuzzy to Quantifiable Metrics• Measure early• Measure often• Measure everything Source: Hoffman & Fodor, 2010
Measurement Tools Available
Estimating Metric Values• Primary research (consumer panels, surveys)• Traditional media benchmarks• Historical performance
Case: Danone Facebook Campaign• What was the marketing objective?• What metrics would you use to measure it?• How would you try to measure ROI? http://www.youtube.com/watch?v=R7F4zQWWaVs