The power to define and control a brand is slipping out of the hands of corporations and institutions and into the hands of individuals and communities online.The conversations are not limited to Facebook and Twitter either.They can be had using:News and BookmarkingBlogsVideo SharingPhoto SharingMessage BoardsWikisSocial GamingPodcastsRSS Feeds
Is there an ROI from SM? Many would say no and they are not necessarily wrong. Here is why:The “investment” of ROI refers to assets purchased and placed on your balance sheet. All the brick and mortar stuff. It is often something you can sell later if you no longer need it. Marketing activity is not seen as an investment, but an expense entered into your Profit and Loss statement.Why do so many use ROI and Marketing together?
Maybe we’re not asking the right question. Instead of trying to calculate ROI, we should think about the value of social media.
During this process you can keep track and learn form what people are saying about you, create buzz, increase your brand’s exposure, identify and recruit influencers to help spread your message to their communities, improve your search engine visibility, gain competitive intelligence, keep fresh and relevant by getting your messages out fast, build customer loyalty by building relationships, and emerge an industry leader, NOT a follower.
Let’s take a look for a moment at the components of implementation
What is your ratio of cost to gain?This is something you can measure.It can be a lot of work, but it is up to you to figure out if time and money spent on Social Media are worth it.
We are still in the early days of understanding how advertising and engaging on Facebook can result in positive, measurable returns.A survey by David Berkowitz, media director at 360i, and BarnRaisersllc.com founder Rob Petersen, compiled 100 case studies to prove social media ROI.By engaging customers through its Twitter customer service center, Comcast changed sentiment about the company through quality of attention and dialogue.Livestrong’s fundraiser succeeded in 2009 during the deep recession that was especially hard on nonprofits.
Berkowitz and Petersen concluded that low out-of-pocket investments in SM lead to high ROI when organizations do certain things.ROE = Return on EngagementEstablish goals and conversion funnels in GA
They reexamined the traditional definition of “investment.”
Remember when George Will said “nothing lasts”? Suddenly the SM asset can go on the balance sheet
intangible investment with tangible results
Refer to handout
One of NSI’s clients has a particular interest in messaging about Life Cycle Assessment — that a building material’s environmental and energy impact must be measured throughout its entire life cycle.
a cold-war incident in which President Johnson’s Secretary of Commerce, Sandy Trowbridge, apparently was so obsessed about bugs in his Intourist Hotel that he rolled back the carpet and clipped all the wires leading to a suspicious metal cap bolted into the floor—only to find out the next morning that the chandelier of the room immediately below had crashed onto the bed of the unsuspecting occupant.
Facebook analytics allow you to calculate the cost of adding a fan.Above example: Expenditure ($92.08) divided by Connections (new “likes”--35) = Cost Per Like of $2.63.
A more cost-effective campaign, where ads were tested and best performing ads kept, shows a better ROI. Expenditure ($17.73) divided by Connections (new “likes”--22) = Cost Per Like of $0.80.
Define Your Conversion Funnels or Goals ViaPurchases Link ConversionsRSS Feed SubscriptionsWhite Paper DownloadsSocial Profile Click-ThroughsEtc.
What is your social media ROI abridged
What is YourSocial Media ROI?Date: March 26, 2012Time: 3:15 – 4:30 pmHub Tag: #ideas12 LM8 Tom McClintock
A Presentation By: Tom McClintockColorado Springs, CO · Richmond, VA
Agenda Social Media (SM)’s Latest Triumphs ROI Opposite CornersNew Math, Cases and Available Tools
Viewpoint #1You can’t—and shouldn’t try to—calculate the ROI of social media.
VIEW 1: No ROI from SM Having thousands of followers doesn’t necessarily translate into SM marketing success You can easily measure only some things • Coupons • Contests • Clicked links • Signups Much of SM’s benefit is indirect or intangible—notan asset purchased and placed onbalance sheet
VIEW 1: No ROI from SM SM is an investment in a relationship with your audience that converts them into advocates. Value is derived from qualitative benefits.
VIEW 1: No ROI from SMQualitative Benefits In Each Stage of Your MarketingCampaigns: Research Strategic Planning Implementation Evaluation Source: Synovate Research, Alexa Global Traffic Ranking, Morgan Stanley Research
VIEW 1: No ROI from SMImplementation Driving traffic to your website Branding Risk management Conversions based on goals http://annualreport.pg.com/annualreport2011/innovating/oldspice.shtml
VIEW 1: No ROI from SM If you need to calculate ROI, think of it as activity-based, not medium-based—i.e., Focus on the relationship between the activity and the outcome.Social Media is a tool, just like a telephone, email or computer.
Viewpoint #2You can—and must—calculate the ROI of SM.
VIEW 2: Calculating ROI from SMComcast Starbucks LivestrongTwitter customer Goes to customers Raised $10.8 millionservice center attracted through SM for new with Livestrong2,700 followers. Many product ideas. Now Challenge through SMcritics of the company when it launches a new channels with blog asconverted to raving product, it already has hub.fans. millions of fans. Source: Petersen, Rob. 34 cases that prove social media ROI, http://barnraisersllc.com/2010/10/33-13-social-media-case-studies-prove-roi
VIEW 2: Calculating ROI from SMLow investment in SM leads to high ROI whenorganizations: Have a clear business strategy Aren’t afraid to jump in Make imaginative use of social channels, customer engagement and brand relationship Source: Petersen, Rob. 34 cases that prove social media ROI, http://barnraisersllc.com/2010/10/33-13-social-media-case-studies-prove-roi/
VIEW 2: Calculating ROI from SM So how did BarnRaisers find an ROI when so many others couldn’t? Let’s take another look at the formula that the naysayers cite: (Return – Investment) Investment
Must all SM ROI Be Sales-Based? If your goal is sales, you can measure ROI using the standard financial formula: (Return – Investment) Investment But what if you’re, say, an Association…with returns less tangible, e.g., raising consumer awareness about your industry?
New Math BarnRaisers and others realize that social has not only decentralized and disaggregated, but it’s also dematerialized —things are less tangible Less Tangible Today • Publishing • Hollywood Studios • Content • Trade Shows • Workplace • Friendships • Corporate Structure • Business Contacts • Pricing (Freemium Model) • Assets, too! Great Idea #1: social redefines how we generate and value returns in a less tangible world
New Math Great Idea #2: Untethered, ROI metrics can now go beyond sales dollars to include Retention, Research and Sentiment values as major currencies to track your messaging
Don’t Base ROI on Sales If Sales isn’t Your GoalGreat Idea #3: when sales aren’t the goal, calculate the ROIReturn using the Persuasion IndexDefined by 5 levels of agreement: • Strongly agrees (5) • Partially agrees (4) • Neither agrees nor disagrees (3) • Partially disagrees (2) • Strongly disagrees (1)
Five Steps to Calculate SM ROI Step 1: Identify Objective sales, retention, market research—or for most associations—sentiment Step 2: Define Metrics • sales: thank-you page visits from tweeted landing page • retention: repeat customers/Facebook posts • market research: likes to announcement of potential new product/number of Facebook fans • sentiment: shift in percentage of conversation participants who agree vs disagree to message point over time Step 3: Estimate SM campaign costs labor + ad spend + premium value Step 4: Estimate SM Return against Objective via Metrics Step 5: Measure and report regularly
Measure ROI to Improve ROI Great Idea #4: Measure SM ROI with an eye to improving it by: • Increasing campaign impact • Reducing campaign costs
Measure ROI to Improve ROIIncrease campaign impact Define goals Empower users through transparency Research offers Employ relevant premiums Utilize split-tested landing pages Develop relationships Promote synergistic third party offerings Establish social partnerships
Measure ROI to Improve ROIReduce campaign implementation costs Leverage SM team Establish SM culture Employ Twitter client Utilize SM browser Repurpose content Establish social partnerships
NSI CASE 1: Sentiment Measurement for American Chemistry Council ROI: Message Point Delivery Problem: Regulators can’t keep up with the latest in materials science, like Life Cycle Assessment (LCA)—a methodology to measure a building’s lifetime environmental impact Objective: Raise Sentiment for LCA Across Target
NSI CASE 1: Sentiment Measurement for American Chemistry Council Messaging • LCA reviews building materials through all phases, from manufacture through recycling • LCA contrasts with single-attribute assessment, such as whether the product is made from recycled material or whether it emits VOCs
NSI CASE 1: Sentiment Measurement for American Chemistry Council Goals: Increase web traffic by 10% by December 2011 (+60%) Create regular weekly blog content on highest visibility sites Use Social Media to reach public and key Building & Construction audiences
NSI CASE 1: Sentiment Measurement for American Chemistry Council Methodology: 4-Phase Strategy PHASE 1: PHASE 2: PHASE 3: PHASE 4: Listening Strategy via Increase Change Blog and ReputationConnect™ Social Voice Sentiment Twitter Listening Platform Outreach
ROI Measurement Tools Google Analytics Track Goals via Conversion Funnels • SM Traffic Only • Review Correlations Between SM Referral Traffic and Goal Conversions Utilize a Variety of Tools Define, Track, Measure, Change, Repeat Source: Lane, Brett, Engine-ius Marketing, CEO Workshop 2011, Colorado Springs Marketing Group
ROI Measurement Tools Google Webmaster Tools Source: Lane, Brett, Engine-ius Marketing, CEO Workshop 2011, Colorado Springs Marketing Group
ROI Measurement Tools Facebook Google Analytics Tracker Source: Lane, Brett, Engine-ius Marketing, CEO Workshop 2011, Colorado Springs Marketing Group
ROI Measurement Tools Involver’s Static HTML for Pages Source: Lane, Brett, Engine-ius Marketing, CEO Workshop 2011, Colorado Springs Marketing Group
ROI Measurement Tools AddThis Source: Lane, Brett, Engine-ius Marketing, CEO Workshop 2011, Colorado Springs Marketing Group
ROI Measurement Tools PowerReviews Source: Lane, Brett, Engine-ius Marketing, CEO Workshop 2011, Colorado Springs Marketing Group
Contact Information Tom McClintock NSI Partners 719.328.0042 x801 tom@NSIpartners.com www.NSIpartners.com