Measuring ROI for Social Media

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A short(er) version of a talk I recently gave at SMAZ -- Social Media for Business in Arizona. The house was packed, even though others were talking about the ROI of social media.

I made sure mine had teeth and didn't dance around the issue of ROI. ROI means what ROI means. And CFOs don't care about alternative descriptions for it. They care about money out and want to see money in.

Is that easy? Nope. But it's doable. For some. I give props inside this preso to Olivier Blanchard for the concept that I expand upon. Hope you enjoy it.

E.

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Measuring ROI for Social Media

  1. 1. Measuring ROI for Social Media Yes , yo u shou ld. Yes, yo u can . Evo Terra ASimplerWay.com
  2. 2. Measuring ROI for Social Media Evo Terra Shaking Hands with Fellow Graduates by boxercab ASimplerWay.com
  3. 3. Measuring ROI for Social Media Evo Terra adding machine (d) by Aaron Kyle ASimplerWay.com
  4. 4. Measuring ROI for Social Media • ROI = Return on Investment – not “interest” – not “interaction” – not “engagement” Evo Terra ASimplerWay.com
  5. 5. Measuring ROI for Social Media • ROI = Return on Investment – not “interest” – not “interaction” – not “engagement” Benefit - Cost ROI = Cost Evo Terra ASimplerWay.com
  6. 6. Evo Terra balance sheet ok by Philippe Put ASimplerWay.com
  7. 7. Evo Terra Social Media ROI by Intersection Consulting ASimplerWay.com
  8. 8. Evo Terra Social Media ROI by Intersection Consulting ASimplerWay.com
  9. 9. Evo Terra Social Media ROI by Intersection Consulting ASimplerWay.com
  10. 10. Head in the sand by jvh33 Evo Terra ASimplerWay.com
  11. 11. Head in the sand by jvh33 That gulping sound is coming from your yard by Daniel Greene Evo Terra ASimplerWay.com
  12. 12. Head in the sand by jvh33 That gulping sound is coming from your yard by Daniel Greene Evo Terra Rob Cottinghams Notes from My Metrics Session by cambodia4kidsorg ASimplerWay.com
  13. 13. Benefit - Cost ROI = Cost Evo Terra ASimplerWay.com
  14. 14. Your social media plan isn’t Evo Terra Social Media Plan by javiberm ASimplerWay.com
  15. 15. Your Social Media Investment… leads to an Action, that creates a Reaction, which delivers a Non-Financial Impact, that may ultimately cause a Financial Impact. Evo Terra Stolen from The Definitive Social Media ROI Presentation by Olivier Blanchard | http://smroi.net ASimplerWay.com
  16. 16. Evo Terra Not the best hockey game ever by Evo Terra ASimplerWay.com
  17. 17. Evo Terra Stand out from the Crowd by Paul likes pics ASimplerWay.com
  18. 18. HOW TO measure ROI • Showstoppers – Limited access to metrics – Execution roadblocks Evo Terra ASimplerWay.com
  19. 19. HOW TO measure ROI 1. Know your client’s goals – Selling stuff – Increase sales of XYZ by 10% in Q2 Evo Terra ASimplerWay.com
  20. 20. HOW TO measure ROI 1. Know your client’s goals – Financial Impact • Replacing expensive customer focus groups • Reduce inbound sales calls • Reduce inbound service requests • Reduce advertising expenses • Increased transactions • Higher GP sales • Increased sales efficiency Evo Terra ASimplerWay.com
  21. 21. HOW TO measure ROI 1. Know your client’s goals – Non-Financial Impact • Increased PageRank™ • Reduced infrastructure cost • Increased store traffic • Increased site traffic • Improved sentiment • Relevant Fans & Followers Evo Terra ASimplerWay.com
  22. 22. Measurement RULE If you aren’t influencing it, don’t measure it. Evo Terra ASimplerWay.com
  23. 23. HOW TO measure ROI 2. Record every Action – Date & action • Blog posts • Outbound comment • Guest post • Interviewed on podcast • eBook published • Event promoted • Campaign flight • Press release • Influential re-Tweet Evo Terra ASimplerWay.com
  24. 24. HOW TO measure ROI 3. Overlay with business metrics Total Revenues Site traffic is flat. Site Traffic Gross Profit % Revenues are up! Twitterers FB Fans Conversions per customer Evo Terra ASimplerWay.com
  25. 25. HOW TO measure ROI 3. Overlay with business metrics Total Revenues Site traffic is flat. Site Traffic Gross Profit % Revenues are up! Twitterers FB Fans Conversions per customer No more conversions, either. Evo Terra ASimplerWay.com
  26. 26. HOW TO measure ROI 3. Overlay with business metrics Total Revenues Site traffic is flat. Site Traffic And sales were already going up. You’re fired. Gross Profit % Revenues are up! Twitterers FB Fans Conversions per customer No more conversions, either. Evo Terra ASimplerWay.com
  27. 27. HOW TO measure ROI 3. Overlay with business metrics Total Revenues Site Traffic Gross Profit % Twitterers Mix of key financial and non- financial goals impacted FB Fans Conversions per customer Evo Terra ASimplerWay.com
  28. 28. HOW TO measure ROI 3. Overlay with business metrics SM Campaign launches 10/30 - Mashable.com guest blogging 9/1 - Influential tweet Total Revenues 7/20 - New product push Site Traffic Gross Profit % Twitterers FB Fans Conversions per customer Evo Terra ASimplerWay.com
  29. 29. Measurement RULE But you aren’t done! Calculate the ROI. Evo Terra ASimplerWay.com
  30. 30. Week GP Twitter Revenue Gross Profit $ Net Profit $ Baseine (net profit $) SM Fees Net net net 20 51.06% 2389 $ 99,500.67 $ 50,802.97 $ 12,700.74 $13,000.00 $1,000.00 ($1,299.26) 21 51.31% 2401 $ 99,789.89 $ 51,206.57 $ 12,801.64 ($1,198.36) 22 51.57% 2413 $ 99,987.98 $ 51,564.65 $ 12,891.16 ($1,108.84) 23 51.76% 2498 $ 101,689.45 $ 52,637.71 $ 13,159.43 ($840.57) 24 51.83% 2501 $ 100,432.89 $ 52,051.67 $ 13,012.92 ($987.08) 25 51.98% 2500 $ 101,678.34 $ 52,849.27 $ 13,212.32 ($787.68) 26 51.66% 2502 $ 100,456.89 $ 51,892.35 $ 12,973.09 ($1,026.91) 27 51.12% 2499 $ 100,069.87 $ 51,157.75 $ 12,789.44 7/20 - New product ($1,210.56) 28 51.31% 2501 $ 125,876.56 $ 64,592.78 $ 16,148.20 $2,148.20 29 51.57% 2525 $ 125,987.67 $ 64,972.91 $ 16,243.23 push $2,243.23 30 51.76% 2567 $ 126,123.09 $ 65,285.34 $ 16,321.34 $2,321.34 31 51.83% 2701 $ 102,452.98 $ 53,098.63 $ 13,274.66 ($725.34) 32 51.98% 2746 $ 99,876.54 $ 51,912.75 $ 12,978.19 ($1,021.81) 33 52.49% 2767 $ 99,333.76 $ 52,140.14 $ 13,035.03 ($964.97) 34 52.96% 2790 $ 97,911.67 $ 51,854.05 $ 12,963.51 9/1 - Influential ($1,036.49) 35 53.45% 2804 $ 96,898.99 $ 51,794.05 $ 12,948.51 ($1,051.49) 36 53.49% 2825 $ 111,522.87 $ 59,658.42 $ 14,914.60 tweet $914.60 37 53.52% 2832 $ 124,488.77 $ 66,621.05 $ 16,655.26 $2,655.26 38 53.45% 2850 $ 136,445.37 $ 72,932.22 $ 18,233.06 $4,233.06 39 53.49% 2988 $ 145,998.03 $ 78,100.68 $ 19,525.17 $5,525.17 40 53.64% 3104 $ 156,887.33 $ 84,160.55 $ 21,040.14 $7,040.14 41 54.50% 3115 $ 160,984.23 $ 87,734.51 $ 21,933.63 $7,933.63 42 55.59% 3148 $ 159,845.44 $ 88,856.16 $ 22,214.04 10/30 - $8,214.04 43 56.53% 3156 $ 161,334.87 $ 91,201.27 $ 22,800.32 Mashable.com $8,800.32 44 57.49% 3178 $ 155,989.44 $ 89,679.76 $ 22,419.94 guest blogging $8,419.94 45 58.99% 3188 $ 162,889.44 $ 96,083.53 $ 24,020.88 $10,020.88 46 60.29% 3203 $ 169,556.76 $ 102,226.89 $ 25,556.72 $11,556.72 47 61.23% 3267 $ 178,943.00 $ 109,568.65 $ 27,392.16 $13,392.16 48 62.47% 3409 $ 176,789.44 $ 110,441.45 $ 27,610.36 $13,610.36 49 64.07% 3687 $ 180,333.88 $ 115,546.26 $ 28,886.57 $14,886.57 50 66.38% 3898 $ 179,445.98 $ 119,119.30 $ 29,779.83 $15,779.83 51 68.35% 4120 $ 181,445.00 $ 124,013.92 $ 31,003.48 $17,003.48 52 70.70% 4467 $ 183,876.04 $ 129,998.28 $ 32,499.57 $18,499.57 $ 4,404,843.13 $ 2,495,756.49 $ 623,939.12 $161,939.12 Evo Terra ASimplerWay.com
  31. 31. Week GP Twitter Revenue Gross Profit $ Net Profit $ Baseine (net profit $) SM Fees Net net net 20 51.06% 2389 $ 99,500.67 $ 50,802.97 $ 12,700.74 $13,000.00 $1,000.00 ($1,299.26) 21 51.31% 2401 $ 99,789.89 $ 51,206.57 $ 12,801.64 ($1,198.36) 22 51.57% 2413 $ 99,987.98 $ 51,564.65 $ 12,891.16 ($1,108.84) 23 51.76% 2498 $ 101,689.45 $ 52,637.71 $ 13,159.43 ($840.57) 24 51.83% 2501 $ 100,432.89 $ 52,051.67 $ 13,012.92 ($987.08) 25 51.98% 2500 $ 101,678.34 $ 52,849.27 $ 13,212.32 ($787.68) 26 51.66% 2502 $ 100,456.89 $ 51,892.35 $ 12,973.09 ($1,026.91) 27 51.12% 2499 $ 100,069.87 $ 51,157.75 $ 12,789.44 7/20 - New product ($1,210.56) 28 51.31% 2501 $ 125,876.56 $ 64,592.78 $ 16,148.20 $2,148.20 29 51.57% 2525 $ 125,987.67 $ 64,972.91 $ 16,243.23 push $2,243.23 30 51.76% 2567 $ 126,123.09 $ 65,285.34 $ 16,321.34 $2,321.34 31 51.83% 2701 $ 102,452.98 $ 53,098.63 $ 13,274.66 ($725.34) 32 51.98% 2746 $ 99,876.54 $ 51,912.75 $ 12,978.19 ($1,021.81) 33 52.49% 2767 $ 99,333.76 $ 52,140.14 $ 13,035.03 ($964.97) 34 52.96% 2790 $ 97,911.67 $ 51,854.05 $ 12,963.51 9/1 - Influential ($1,036.49) 35 53.45% 2804 $ 96,898.99 $ 51,794.05 $ 12,948.51 ($1,051.49) 36 53.49% 2825 $ 111,522.87 $ 59,658.42 $ 14,914.60 tweet $914.60 37 53.52% 2832 $ 124,488.77 $ 66,621.05 $ 16,655.26 $2,655.26 38 53.45% 2850 $ 136,445.37 $ 72,932.22 $ 18,233.06 $4,233.06 39 53.49% 2988 $ 145,998.03 $ 78,100.68 $ 19,525.17 $5,525.17 40 53.64% 3104 $ 156,887.33 $ 84,160.55 $ 21,040.14 $7,040.14 41 54.50% 3115 $ 160,984.23 $ 87,734.51 $ 21,933.63 $7,933.63 42 55.59% 3148 $ 159,845.44 $ 88,856.16 $ 22,214.04 10/30 - $8,214.04 43 56.53% 3156 $ 161,334.87 $ 91,201.27 $ 22,800.32 Mashable.com $8,800.32 44 57.49% 3178 $ 155,989.44 $ 89,679.76 $ 22,419.94 guest blogging $8,419.94 45 58.99% 3188 $ 162,889.44 $ 96,083.53 $ 24,020.88 $10,020.88 46 60.29% 3203 $ 169,556.76 $ 102,226.89 $ 25,556.72 $11,556.72 47 61.23% 3267 $ 178,943.00 $ 109,568.65 $ 27,392.16 $13,392.16 48 62.47% 3409 $ 176,789.44 $ 110,441.45 $ 27,610.36 $13,610.36 49 64.07% 3687 $ 180,333.88 $ 115,546.26 $ 28,886.57 $14,886.57 50 66.38% 3898 $ 179,445.98 $ 119,119.30 $ 29,779.83 $15,779.83 51 68.35% 4120 $ 181,445.00 $ 124,013.92 $ 31,003.48 $17,003.48 52 70.70% 4467 $ 183,876.04 $ 129,998.28 $ 32,499.57 $18,499.57 $ 4,404,843.13 $ 2,495,756.49 $ 623,939.12 $161,939.12 Evo Terra ASimplerWay.com
  32. 32. Benefit - Cost ROI = Cost Evo Terra ASimplerWay.com
  33. 33. Benefit - Cost ROI = Cost Benefit: $623,939.12 in net profit dollars, less $429,000 as baseline Cost : $1000 for 33 weeks = $33,000 $194,939.12 - $33,000 4.91 = ROI $33,000 Evo Terra ASimplerWay.com
  34. 34. What if… You don’t win? Then you don’t win. Evo Terra ASimplerWay.com
  35. 35. Evo Terra ASimplerWay.com
  36. 36. Measuring ROI for Social Media Yes, you should. Yes, you can. Evo Terra ASimplerWay.com

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