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Defining Social Media ROINew Comm ForumApril 2010Katie Delahaye PaineCEOkdpaine@kdpaine.comwww.kdpaine.comhttp:/kdpaine.bl...
Social Media renders everything you know aboutmeasurement obsoleteOld School Communications                               ...
Signs that it’s the end of measurement as we know it1.  The Army did more recruitment via a video game than they did thru ...
A measurement timeline       MSM        Online      Social                              Media        Eyeball    HITS    En...
The shifting sands of marketing         From                               ToTraditional advertising               PR     ...
It’s not just about marketing anymore                     ConversationsCustomer   Marketing &   Competitive    Business   ...
Old School Metrics                      AVEs                      Eyeballs                      HITS (How Idiots Track    ...
New School Metrics    Influence = The power or ability to affect someone’s   actions.    Engagement= Some action beyond ze...
The Engagement Decision TreeAwareness   Consideration   Preference       Trial       Purchase              Observe/      P...
Measurable Goals for Marketing Today1. Marketing/leads/sales/2. Mission/safety/civic engagement3. Relationship/reputation/...
Goals drive metrics, metrics drive results            Reputation/                                 Sales                   ...
Goals, Actions and Metrics      Goal            Action          Output Metric          Outtake Metric             Outcome ...
Conversation Type by Message Saturation                                                                  Expressing suppor...
Moving conversation from observation to support
Media Engagement & Online Giving                                     35,152,789 OTS                                       ...
The 7 steps to the perfect 21st Century Measurement Program  1.   Define the “R” – Define the expected results?  2.   Defi...
Step 1: Define the “R”  What return is expected? – Define in terms of the business or  mission.  What problems are you try...
Reach & Influence are not ROI!  Revenue minus cost = ROI  Revenue = $$ in or $$ not spent    HSUS                         ...
ROI = revenue or savings.  ROI = cost savings                                     Reach    + Cost of program              ...
How Social Media Impacts Financial Performance  Generates Revenue, Sales, Profit     • Social Media can drive sales, marke...
How Social Media Impacts Internal Costs*      Increases employee satisfaction and engagement, leading to greater efficienc...
How Social Media Affects Public Policy Creates public awareness, understanding, and support forlegislation, regulation, an...
Step 2: Define the “I”  Social Media is not “FREE”    Ning    Facebook    Promoted Tweets  What is the investment?    Pers...
Step 3: Define your audiences and how you impact them  There is no “audience.” There are multiple constituencies  Should y...
Step 4: Define your benchmarks  Past Performance  Different programs, different tactics  Think 3      Peer      Underdog n...
Step 5: Define your Key Performance Indicators (KPIs)   The Perfect KPI      Gets you where you want to go (achieves corpo...
Step 5: Define your Key Performance Indicators (KPIs) carefully becauseyou become what you measure  Cost savings          ...
Step 6: Pick a tool1. Content Analysis  • Look at the whole conversation, not just your brand  • Separate out paid content...
Step 6: Selecting a measurement toolObjective                          KPI                                ToolIncrease inq...
1. Content Analysis requires a content source:   Free:    •      Google News/Google Blogs, RSS feeds, Technorati,         ...
Next: A way to analyze content  Automated  Human:     Census vs. random sample     Sentiment vs. Topics     The 80/20 rule...
Why you need a Kick-Butt Index?  You decide what’s important:  Benchmark against peers and/or competitors  Track activitie...
How to calculate your KBI                                                   -10Quality score      +10                     ...
Charting KBI over time between divisions                             Optimum Content Score Relative to Competitors        ...
Trend against competition with KBI                         Optimum Content Score by Company0.900.800.700.600.50           ...
KBI makes it easier to compare value          Launch A   Launch B       Launch C          Launch D      0                 ...
Assessing the Value of Engagement                                       Metrics Level 1   Searchers   % Unique Visitors Le...
10 ways Improved Relationships Affect ROI1.Increases likelihood to purchase / consider your brand(s)2.Minimizes the effect...
Survey tools & tips    SurveyMonkey, Zoomerang, Benchpoint    Segment by:       Media source/type       Demographics      ...
Aspects of relationships     Control mutuality     Trust     Satisfaction     Commitment     Exchange relationship     Com...
Components of a Relationship Index Control mutuality         In dealing with people like me, this organization has a tende...
How to implement relationship metrics    Step 1: Conduct a benchmark relationship study    Step 2: Implement PR program   ...
Step 7: Analysis - -Research without insight is just trivia    Look for failures first    Check to see what the competitio...
Actionable Conclusions             Ask for money         Get Commitment     Manage Timing             Influence decisions ...
Thank You!   For more information on measurement, read my blog: http://kdpaine.blogs.com or subscribe to The Measurement S...
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  1. 1. Defining Social Media ROINew Comm ForumApril 2010Katie Delahaye PaineCEOkdpaine@kdpaine.comwww.kdpaine.comhttp:/kdpaine.blogs.comFounding Fellow, Society for New Communications Research
  2. 2. Social Media renders everything you know aboutmeasurement obsoleteOld School Communications 21st Century Role The definition of timely has changed The definition of reach has changed GRPs & Impressions are irrelevant in social media The definition of success has changed The answer isn’t how many you’ve reached, but how those you’ve reached have responded Page 2
  3. 3. Signs that it’s the end of measurement as we know it1. The Army did more recruitment via a video game than they did thru all their other advertising efforts2. Procter & Gamble is now paying for engagement, not eyeballs3. Sodexo cut $300K out of its recruitment budget using Twitter4. HSUS generated $650,000 in new donations from an on-line photo contest on Flickr5. IBM sells more with a $500 podcast than it does from an ad6. 11 Mom’s turned around Wal-Marts image and delivered measureable increases in sales.7. In a week, the Red Cross raised $35 million for Haiti relief via texting8. Facebook USERS translated the site from English to Spanish via a Wiki in less than 4 weeks and cost Facebook $09. 78% of consumers trust peer recommendations , only 14% trust advertisements10. Only 18% of traditional TV campaigns generate a positive ROI11. More people use Facebook daily than Google12. More companies have a Twitter account than a public facing blog. Twitter sees 300K new registrations per day.
  4. 4. A measurement timeline MSM Online Social Media Eyeball HITS Engagement counting
  5. 5. The shifting sands of marketing From ToTraditional advertising PR Mobile Search IPTV VOD Events Transactional AdsImpressions & EngagementEyeballs Impact-based metrics
  6. 6. It’s not just about marketing anymore ConversationsCustomer Marketing & Competitive Business HR Service Sales Intelligence Analytics
  7. 7. Old School Metrics AVEs Eyeballs HITS (How Idiots Track Success) Couch Potatoes # of Twitter Followers (unless you’re a celebrity) # of Facebook Friends/Fans (unless they donate money) Page 7
  8. 8. New School Metrics Influence = The power or ability to affect someone’s actions. Engagement= Some action beyond zero Advocacy = engagement driven by an agenda Sentiment = contextual expression of opinion – regardless of tone ROI: Return on Investment – no more no less. End of discussion
  9. 9. The Engagement Decision TreeAwareness Consideration Preference Trial Purchase Observe/ Participate Engagement Purchase/ActFind Lurk /Link/WOM
  10. 10. Measurable Goals for Marketing Today1. Marketing/leads/sales/2. Mission/safety/civic engagement3. Relationship/reputation/positioning To fix this Or get to this
  11. 11. Goals drive metrics, metrics drive results Reputation/ Sales Get the word out Goal Relationships Engagement Index Relationship scores % hearing Cost per customer acquisition RecommendationsMetrics % believing Web analytics Positioning Sales leads % acting Marketing Mix Modeling Engagement 11
  12. 12. Goals, Actions and Metrics Goal Action Output Metric Outtake Metric Outcome MetricGet the word out Twitter campaign Number of followers % trusting AAA as a Reduction in safety hazardsabout safety Number of posts reliable source of Reduction in accidentsissues information % increase in tweets and retweetsIncrease in Flickr/Youtube Number of entrants % change in share of Increase in requests forcreative class photo contest “creative/artistic” information for spacevenues positioning in Increase usage of supportdowntown traditional and social materials/ funding mediaAdoption of a Facebook page # of friends, followers % awareness Increased web traffic to infonew product YouTube video that participate in the % preferring brands site conversation Online orders Length of threads Market share % recommending product & visibility 12
  13. 13. Conversation Type by Message Saturation Expressing support 40 221Conversation Type January February MarchMaking an observation 142 152 46 22 24 Making an observationExpressing support 20 40 261 Contains no messageOffering an opinion 18 1 1 5 Asking a question Contains One+ MessageRallying support 4 4 5Advertising something 10 4 Rallying supportAsking a question 1 2 6Distributing media 4 2 0 50 100 150 200 250 300Making a suggestion 2 3 Mentions Conversation Type by ToneGiving a shout-out 1 2 1Calling for action 1 2 Expressing support 178 83Expressing criticism 1 1Disclosing personal information 1 1 Making an observation 12 34Putting out a wanted ad 1Expressing agreement 1 Positive NeutralRecruiting people 1 Asking a question NegativeAnswering a question 1Expressing surprise 1 Rallying supportGrand Total 206 213 321 0 50 100 150 200 250 300 13 Mentions
  14. 14. Moving conversation from observation to support
  15. 15. Media Engagement & Online Giving 35,152,789 OTS Red line indicates media impressions 6,253,852 OTS
  16. 16. The 7 steps to the perfect 21st Century Measurement Program 1. Define the “R” – Define the expected results? 2. Define the “I” -- What’s the investment? 3. Understand your audiences and what motivates them 4. Define the metrics (what you want to become) 5. Determine what you are benchmarking against 6. Pick a tool and undertake research 7. Analyze results and glean insight, take action, measure again
  17. 17. Step 1: Define the “R” What return is expected? – Define in terms of the business or mission. What problems are you trying to solve? What were you hired to do? What difference are you expected to make? If you are celebrating complete 100% success a year from now, what is different about the organization? If your department is eliminated, what would be different? 17
  18. 18. Reach & Influence are not ROI! Revenue minus cost = ROI Revenue = $$ in or $$ not spent HSUS Reach • Flickr Revenue: $650,000 Frequency • Contest Cost $1000 Hits • ROI = $649,000 Friends Followers Sodexho • Twitter costs: $30,000 • Cost savings: $300,000 • Net savings (ROI): $270,000
  19. 19. ROI = revenue or savings. ROI = cost savings Reach + Cost of program Frequency Hits – Cost elimination Friends Followers ROI = greater efficiency +cost of program – cost of doing something “the old way” (cost per percentage point gained) ROI = greater revenue +cost of program –value of leads/sales
  20. 20. How Social Media Impacts Financial Performance Generates Revenue, Sales, Profit • Social Media can drive sales, market share, adoption, preference • Social Media can drive donations & membership Drives Efficiency • Better audience targeting • Reaching more people with a credible message for less money Avoids Catastrophic Cost • Listening + Quality counsel helps to mitigate impacts of crises 20
  21. 21. How Social Media Impacts Internal Costs* Increases employee satisfaction and engagement, leading to greater efficiency, increased retention, lower turnover rates, lower recruitment costs, and higher productivity Provides greater transparency and commitment to and from employees Lowers legal costs by increasing social capital Change employee behaviors such as greater levels of focus on key areas such as safety, quality, call response times Creates a platform should it be necessary to communicate bad news at some stage in the future* Note items here can also refer to other internal publics such as trade association members. 21
  22. 22. How Social Media Affects Public Policy Creates public awareness, understanding, and support forlegislation, regulation, and political candidates Affects voter behavior Helps pass legislation, regulation, and initiatives Affects specific companies and industries throughappropriations, tax impacts, and regulatory changes that canaffect any and all aspects of a business Instigates and perpetuates grassroots campaigns 22
  23. 23. Step 2: Define the “I” Social Media is not “FREE” Ning Facebook Promoted Tweets What is the investment? Personnel Agency compensation Senior Staff time Opportunity cost 23
  24. 24. Step 3: Define your audiences and how you impact them There is no “audience.” There are multiple constituencies Should you blog or Twitter? Don’t ask me, ask your customers Understand your role in getting the audience to do what you want it to do Raise awareness Increase preference Increase engagement 24
  25. 25. Step 4: Define your benchmarks Past Performance Different programs, different tactics Think 3 Peer Underdog nipping at your heels Stretch goal Whatever keeps the C-suite up at night 25
  26. 26. Step 5: Define your Key Performance Indicators (KPIs) The Perfect KPI Gets you where you want to go (achieves corporate goals) Is actionable Continuously improves your processes Is there when you need it KPIs should be developed for: Programs Overall objectives Different tactics 26
  27. 27. Step 5: Define your Key Performance Indicators (KPIs) carefully becauseyou become what you measure Cost savings Trust: Efficiency Improvement in relationship /reputation Cost per message communicated scores with customers and Cost per new lead/customer acquired communities (Loyalty/Retention) Productivity: Thought leadership: Increase in employee engagement/morale Share of quotes Lower turnover/recruitment costs Share of opportunities Engagement: Message penetration Ratio of posts to comments Positioning on key issues % of repeat visitors Improvement in favorable/unfavorable % of 5+min visitors ratio % of registrations Improvement in Optimal Content Score (OCS) 27
  28. 28. Step 6: Pick a tool1. Content Analysis • Look at the whole conversation, not just your brand • Separate out paid content vs. organic2. Analytics • Web Analytics: • Not just visits • Downloads, coupons, registration • Business Intelligence/Analytics3. Surveys • Segmentation, segmentation, segmentation • Get as specific as you can get
  29. 29. Step 6: Selecting a measurement toolObjective KPI ToolIncrease inquiries, web traffic, % increase in traffic Web Analytics:recruitment #s of clickthrus or downloadsIncrease awareness/preference % of audience preferring your Survey: Online -- SurveyMonkey, brand to the competition Zoomerang or MailEngage marketplace Conversation index greater than .8 Web analytics or Content Analysis: Rankings TypePad, Technorati % increase in engagement Omniture, Google AnalyticsCommunicate messages % of articles containing key Media content analysis – messages Total opportunities to see key messages Cost per opportunity to see key messages % aware of or believing in key Survey message 29
  30. 30. 1. Content Analysis requires a content source: Free: • Google News/Google Blogs, RSS feeds, Technorati, Social Mention, Twazzup, Tweetdeck, Seesmic, Hootsuite $500+ • Radian 6, Techrigy, Sysomos, Visible Technologies, Scout Labs, Cyberalert, CustomScoop, e-Watch, Crimson Hexagon $40,000+ • SAS SMA, Cymfony, Biz 360, Nielsen, Attensity 30
  31. 31. Next: A way to analyze content Automated Human: Census vs. random sample Sentiment vs. Topics The 80/20 rule – Measure what matters because 20% of the content influences 80% of the decisions 31
  32. 32. Why you need a Kick-Butt Index? You decide what’s important: Benchmark against peers and/or competitors Track activities against OCS over time Understand the cost of perfection vs good enough 32
  33. 33. How to calculate your KBI -10Quality score +10 0 -10 Score Score ScoreTonality Positive 3 Neutral 0 Negative -3 Positions the competition favorably or positions SargentoPositioning Contains 2 Doesnt contain 0 negatively -2 Does not contain or miscommunicates keyMessaging Contains 3 partially contains 0 message (neg mess) -1Quotes Contains 1 Does not contain -1Competitive Does not mention Competition mentionedmention Competition 1 prominently -3Total Score 10 0 -10Visibility Score +10 0 -10 Score Score Score Contains competitiveBrand Photo Contains 3 Doesnt contain 0 photo -5Dominance Focal point 3 Not a focal point -1Visibility Headline mention 2 Top -20 % of story 0 Minor mention -2Targetpublication Top Tier 2 2nd tier 0 Not on target list -2Total Score 10 0 -10
  34. 34. Charting KBI over time between divisions Optimum Content Score Relative to Competitors The Percent Difference Between Each Business Units Average Optimum Content Score and the Average Optimum Content Score of Tracked Competitors for each Business Unit 500% 400% Patriot (Korea) 300%% Difference SAS ASAT, Patriot FBX-T AESA IDS 200% for F-15E, MALD, Glory APS and IIS DIB DDG-1000 MSE VIIRS vs. APG-63 (v3) RIS JPL MS RISS, GBS 100% 0% ALR-67(V)3 APG-79, APG63 ERGM cancellation VIIRS delays NPOESS; BOE B-52 jammer -100% Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul 2007 2008
  35. 35. Trend against competition with KBI Optimum Content Score by Company0.900.800.700.600.50 Client Company B0.40 Company C Company D0.30 Company E Company F0.200.100.00 Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul 2007 2008
  36. 36. KBI makes it easier to compare value Launch A Launch B Launch C Launch D 0 $45,000 1 $40,000 2 $35,000 3 $30,000 4 $25,000 5 $20,000 6 $15,000 7 $10,000 8 OCS Score Cost $5,000 9 $0
  37. 37. Assessing the Value of Engagement Metrics Level 1 Searchers % Unique Visitors Level 2 Lurkers % Repeat visitors > 3-5/month Level 3 Casuals % Comments, friends, followers % repeat comments, retweets, participation in Level 4 Actives threads Level 5 % Advocating, recommending, defending the Defenders brand
  38. 38. 10 ways Improved Relationships Affect ROI1.Increases likelihood to purchase / consider your brand(s)2.Minimizes the effects of a crisis3.Reinforces communication of organizational values4.Rebuilds trust after a crisis5.Establishes credibility of new products / companies; ease of marketentry6.Commanding higher prices, lower costs, premium on stock price7.Enhances recommendations / word of mouth leading to faster adoption8.Increases customer loyalty / renewals / satisfaction9.Improves the attracting / retaining of talent10.Lowers legal costs 38
  39. 39. Survey tools & tips SurveyMonkey, Zoomerang, Benchpoint Segment by: Media source/type Demographics Pychographics A/B testing is critical
  40. 40. Aspects of relationships Control mutuality Trust Satisfaction Commitment Exchange relationship Communal relationship 40
  41. 41. Components of a Relationship Index Control mutuality In dealing with people like me, this organization has a tendency to throw its weight around. (Reversed) This organization really listens to what people like me have to say. Trust This organization can be relied on to keep its promises. This organization has the ability to accomplish what it says it will do. Satisfaction Generally speaking, I am pleased with the relationship this organization has established with people like me. Most people enjoy dealing with this organization. Commitment There is a long-lasting bond between this organization and people like me. Compared to other organizations, I value my relationship with this organization more Exchange relationship Even though people like me have had a relationship with this organization for a long time; it still expects something in return whenever it offers us a favor. This organization will compromise with people like me when it knows that it will gain something. This organization takes care of people who are likely to reward the organization. Communal relationship This organization is very concerned about the welfare of people like me. I think that this organization succeeds by stepping on other people. (Reversed)
  42. 42. How to implement relationship metrics Step 1: Conduct a benchmark relationship study Step 2: Implement PR program Step 3: Conduct a follow up relationship study Step 4: Look at what’s changed
  43. 43. Step 7: Analysis - -Research without insight is just trivia Look for failures first Check to see what the competition is doing Then look for exceptional success Compare to last month, last quarter, 13-month average Figure out what worked and what didn’t work Move resources from what isn’t working to what is 43
  44. 44. Actionable Conclusions Ask for money Get Commitment Manage Timing Influence decisions Get Outside help Just Say No 44
  45. 45. Thank You! For more information on measurement, read my blog: http://kdpaine.blogs.com or subscribe to The Measurement Standard: www.kdpaine.blogs.com/themeasurementstandard For a copy of this presentation go to: http://www.kdpaine.com Follow me on Twitter: KDPaine Friend me on Facebook: Katie Paine Or call me at 1-603-682-0735
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