Dialogue Consulting director Hugh Stephens spoke at the 2nd annual Social Media in Government conference on 17th Feb 2014 in Canberra, Australia about how to measure social media return on investment (ROI) and the role of brand activities compared to performance activities.

1. Increasing social media ROI:
Brand vs Performance
Today’s slides are available at:
#AkoSMG14
@HughStephens
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Strategy // Risk // Advisory
About Dialogue Consulting
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Strategy
– Communications
– Social data
– Digital channel integration
Risk
– Active / passive management
– Review
– Analytics
Advisory
– Analytics
• Audits
• Trend analytics
• ROI
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Questions & Tangents always welcome!
Agenda
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ROI review
Brand and performance
Data > tools
What to do about it
– Evaluation periods / Audit
– Interim monitoring
– Make it part of planning
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6. √Σπμ
(!!!11!!1!)

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1 ROI: A rapid
review.
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You can measure anything.
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9. ROI is the balance between costs and revenues
How ROI is defined mathematically
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To increase ROI:
– Decrease costs (!!)
– Increase revenues/return
Or simply:
– Bang for your buck.
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What are your
Value drivers?
Adapted from Larson & Watson, 2011
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You probably don‟t know the true costs of social.
Costs of social
• Social media costs more than most people think.
• Key areas are:
– Staff hours / resources
– Training / education
– Advertising (?pay to play)
– Tools / management platforms
– Technology / devices
– (Evil) consultants
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You can identify the „revenue‟ in many different ways
Revenues of social
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eCommerce would be (is) a great place to be, but government ≠
eCommerce.
Common models
– Business strategy execution („them‟ vs „you‟)
– “Value of a Follower” – net present value through discounting future
returns (via user lifetime value)
– Network analysis („them‟ vs „them‟)
– Opportunity cost valuation
• Compared to display ads?
• Compared to telemarketing?
• Compared to …?
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Number line
$$$$$$
$
0
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2 Brand vs
Performance
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It all starts with strategy.
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It‟s impossible to measure something you don‟t understand
A problem well stated is a
problem half solved.
- Charles Kettering
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Are you focused on „brand‟ or „performance‟? (or „KPI‟?)
Defining ‘brand’ and ‘performance’
• „Brand‟ activities are:
– Usually long(er)-term
– Usually related to equity, but can be internal (risk)
• „Performance‟ metrics are:
– Usually directly related to something
– Often relate to a business strategy
– Can be tangible (sales) or intangible (diversions for
CS)
– Usually easier to measure
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SMROI helps identify where social media generates
value
Quantifying use
•
“Brand”
Financial tangibility –
is the return monetary
(eg sales) or nonmonetary (eg brand
equity)?
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“Performance”
Time – is the return
made in the long or
short term?
p8
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3 Data > tools
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20. “Likes”, “Virality” or “Engagement” is not ROI.
Measuring your ROI
• Most tools simplify things to the point of worthlessness
– “Likes”
}
– “Virality”
} Are these ‘ROI’? No. Do they drive it? Nope.
– “Engagement”
}
• Don‟t create a Klout  small clean data > big dirty data, models
require some expertise
• What are you trying to measure?
– Market research (formal/informal, social/nonsocial)
– Analytics (FB/TW/GA/Omniture)
• Often require planning (URL shortening?)
– Outcome metrics (call volumes/sales/leads)
• Focus on the data, not the tool.
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Identifying what works is harder than just a tool.
There are some handy tools though…
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Data collection
– Volume data is easy to get
– None of the „ready-made‟ tools probably understand your strategy
– Detailed data much harder (Python , R  )
• http://dry-atoll-9855.herokuapp.com/ -- ~40 mins.
Benchmark tools
– NPS
– Consumer surveys
• Yours
• Market
– Competitor analytics
• Be weary of market drivers
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We use proxies when we can‟t measure real numbers
Proxy measurements
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Engagement can be a proxy for?
Clickthroughs can be a proxy for?
Enquiries can be a proxy for?
But proxies have limitations when you
extrapolate.
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4 What to do?
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25. Work out what you can and can‟t measure
Where to get started
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Go back to your strategy – what are you really trying to measure?
– Brand or performance?
– Short or long-term?
Identify what data you have, and what you‟d like to collect.
When can you do what?
– What would you love to have access to if you had the time and budget?
• What is a proxy for ^?
– What is a proxy for ^?
» What is a proxy for ^?
– Rolling analytics are great, but sometimes you have to do a „deep dive‟
ROI your ROI… (#meta)
Focus on the value drivers…
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Dialogue recommends...
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Recommendation 1
Identify and understand your
strategic purposes of maintaining a
social media presence
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Recommendation 2
Social media presences should be
evaluated regularly.
Social media use should be justified,
cost-effective and add value.
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Recommendation 3
SMROI should be evaluated and
help direct improvements to better
extract value from social media.
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Recommendation 4
SMROI should be undertaken
carefully to ensure models, metrics
and calculations are accurate.
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Recommendation 5
To be valid and accurate, ROI models
should remain fluid to reflect changes in
social media platforms, uses and users.
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Questions?
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