Roi On Social Media

What Is The ROI On Social Media? Jay Deragon Social Media Strategist [email_address] David Bullock Management Consultant [email_address]

Sponsored by Organized by GACConsultants

Where is the money going?
How do brands measure ROI on social media?
Ten things you can measure
What are the inputs to create an ROI?
What are the metrics of measurement?
How important is ROI on Social Media?
Best in Class Behavior
What are the arguments?
ROI is the output, what are the inputs?
Agenda of This Presentation

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What Produces an ROI?

Growth in Use of Social Media

Budgets for Social Media

Spending Increases in Social Media

How Much Are You Spending?

How Effective Will The Spending Be?

How Effective Will Your Methods Be?

What Should We Measure?

Measuring The Effects of Social Media Top Ten Measures
Traffic
This is one of the more obvious ways of measuring social media.
Remember that quality often beats quantity , though not always
(as many CPM-focused publishers will surely testify).

2. Interaction Participation is a valuable indicator for many publishers (and brands). It says something about the kind of traffic you are attracting. Remember that an engaged customer is a highly valuable one . Interaction can be anything from leaving comments, to participating in support forums, to leaving customer reviews and ratings. It can happen on your website and on other websites. Keep your eyes and ears open! Measuring The Effects of Social Media Top Ten Measures

3. Sales Many organizations are tracking sales from organic Google referrals and also paid search. It didn’t seem like much of a leap to track other channels, such as Twitter. Try it. Dell did, and discovered that it made $1m from Twitter in 18 months . Blendtec’s ‘Will It Blend?’ campaign on YouTube helped to drive “a five-fold increase in sales”. Measuring The Effects of Social Media Top Ten Measures

4. Leads Some companies simply cannot process sales online, because their products or services do not allow for it. For example, the automotive industry, which tends to measure the effects of its online ad campaigns by the amount of brochures requests, or test drives booked in (as opposed to car sales, which is, in marketing terms, an altogether more macro effort). B2B operators are in a similar position. If you are a consultant and spend time interacting on LinkedIn Answers then there’s a way of tracking that activity to enquiries about your services. The same applies across the spectrum of social media sites. Measuring The Effects of Social Media Top Ten Measures

5. Search marketing The SEO factor cannot be understated. Social media can be far more powerful in this regard than you might initially imagine. For example, a well-placed story / video / image on a site like Digg will generate a lot of traffic and a nice link from Digg itself, but the real win here is that it will generate a lot more interest beyond Digg . Bloggers and major publishers are following Digg’s Upcoming channel to unearth new and interesting stories (Sky News now has a Twitter correspondent). One link and 20,000 referrals from Digg might lead on to 40,000 referrals and 100 links from other sites Measuring The Effects of Social Media Top Ten Measures

6. Brand metrics Word of mouth and the viral factor (inherent in sites like Twitter, Facebook and Digg) can help shift the key brand metrics, both negatively and positively. These include brand favorability, brand awareness, brand recall, propensity to buy, etc. Expensive TV ads are measured in this way, so if these metrics are good enough for TV then they’re surely good enough for the internet? Measuring The Effects of Social Media Top Ten Measures

7. PR The nature of public relations has changed, forever. The last five years have been largely about the traditional PR folks not really being able to figure out the blogosphere. But if PRs cannot control the bloggers, then how on earth will they handle consumers? The distinct worlds of PR, customer service, and marketing are fusing. Twitter means everybody has a blog these days, and somewhere to shout about things to their friends (and beyond). Social media sites are the biggest echo chambers in the world! In any event, if you can measure PR (beyond adding up column inches and applying a random multiple to the equivalent size on the rate card!), then you can measure social media. Measuring The Effects of Social Media Top Ten Measures

8. Customer engagement Given the prevalence of choice, and the ease with which consumers can switch from one brand to another, customer engagement is one of the most important of all metrics in today’s business environment. Engagement can take place offline and online, both on your website and on other sites, particularly social media sites. Customer engagement is key to improving satisfaction and loyalty rates, and revenue . By listening to customers, and letting them know that you are listening, you can improve your business, your products, and your levels of service. The alternative is to ignore customers, which sends out a terrible message. Our research found that an engaged customer will recommend your brand, convert more readily and purchase more often. Measuring The Effects of Social Media Top Ten Measures

9. Retention A positive side effect of increased customer engagement - assuming certain other factors in play work in your favour - is an increase in customer retention. This is going to be a crucial factor in the success of your business in the years to come. Make no bones about it: we are moving into an age of optimization and retention . Watch your retention rates as you start participating in social media. Over time, all things remaining equal, they should rise. Zappos, which is a case study in how-to-do-Twitter (and active on MySpace, Facebook and Youtube), is closing in on $1bn of sales this year, and “75% of its orders are from repeat customers” . Go figure, as they say. Measuring The Effects of Social Media Top Ten Measures

10. Profits If you can reduce customer churn, and engage customers more often, the result will surely be that you’ll generate more business from your existing customer base (who in turn will recommend your business to their network of friends, family, and social media contacts). This reduces your reliance on vast customer acquisition budgets to maintain or grow profits. It makes for a far more profitable and more efficient organization. Too many acquisition strategies appear to be ill-conceived, are not joined up (both in terms of marketing and also operations), and as such are ripe for optimization. Plug the leaky bucket and you won’t need to turn the tap so hard to top it up. And remember that old adage about it being cheaper to keep existing customers than to seek out new ones. Measuring The Effects of Social Media Top Ten Measures

Best In Class Practices & Results

Best In Class Elements of Measure
Return on Marketing Investment (ROMI):
Likelihood to Recommend
Customer Acquisition
These performance criteria speak not only to
Some of the most compelling benefits of social
media marketing but to some of the key value
drivers of practically any company competing
in today’s business environment

Table 1: Top Performers Earn Best-In-Class Status Aberdeen Group Aberdeen Group ROI On Social Media

ROI On Social Media

“ Social Media marketing is going
To blow the shingles off the
roof once people really figure
out how to use it”
Megan O’Connor, Senior
Manager of Internet Marketing.
Levi Strauss & Company
ROI On Social Media

ROI On Social Media

“ Social Media adds value since
it lets a customer determine
How they want to interact with
your brand. It also provides a
platform for peer-to-peer
sharing of information that
allows your brand to reach new
audiences”
Emily Pelosi, Director of
Online Marketing. Office Depot

ROI On Social Media

ROI On Conversations World Wide Web(1. 4 Billion) Find Your Market Getting Your Markets Attention Creating Relationship Attraction Building An Affinity Serving Your Audience Earning A Transaction

ROI On Social Media

Doing things right and Doing the right things Will improve your ROI Q&A What Is Your ROI? :

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Roi On Social Media

by Jay Deragon on Mar 31, 2009

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Roi On Social Media — Presentation Transcript