Transcript of "What's it worth: Starting the conversation on monetizing social media"
What’s It Worth Starting the conversation on monetizing social media
Stating the Obvious <ul><li>The problem with trying to determine ROI for social media is that you are trying to put numeric quantities around human interactions and conversations, which are not quantifiable. </li></ul>What Is The ROI For Social Media? Jason Falls, http://www.socialmediaexplorer.com/2008/10/28/what-is-the-roi-for-social-media/
What is ROI? <ul><li>ROI = </li></ul>Total End Value - Cost Costs X 100%
Why Use the PR Model? <ul><li>Let’s face it – people would rather get the information they need from each other than get it from businesses. PR has long used a minimum 2.5x multiplier to quantify the value of earned versus paid media, recognizing that consumers value the information they get from other channels more than what they receive from your company. Making matters worse, consumers have been handed plenty of reasons not to trust business anyway. </li></ul>
Four PR ROI Approaches <ul><li>Return on impressions </li></ul><ul><li>Return on media impact (akin to market mix modeling) </li></ul><ul><li>Return on target influence </li></ul><ul><li>Return on earned media </li></ul>
Return on Impressions <ul><li>Behavior change is expressed in dollars or gross sales, revenue provide a commensurate measure against the costs of the impressions. </li></ul><ul><ul><li>Assumes that all impressions are equal. </li></ul></ul><ul><ul><li>Assumes that there is a singular point of influence. </li></ul></ul>
Return on Media Impact <ul><li>This model analyzes key independent variables, which include media placements (quantity and quality), advertising sales promotions, price, weather and anything else that could affect sales. </li></ul><ul><ul><li>Assumes that every variable that affects sales can be defined </li></ul></ul><ul><ul><li>Difficulty to isolate other influences such as advertising </li></ul></ul>
Return on Target Influence <ul><li>Surveys can be used to show how varying levels of desired outcomes, such as awareness, attitude or behavior change, are influenced by media relations publicity. </li></ul><ul><ul><li>Survey respondents don’t always know the source. </li></ul></ul><ul><ul><li>Survey respondents may not differentiate between media and advertising. </li></ul></ul>
Return on Earned Media <ul><li>Earned media (advertising value equivalent) is converted to paid media based on what it would cost to purchase the same amount of space in that same media outlet. </li></ul><ul><ul><li>Measure cost-effectiveness rather than ROI </li></ul></ul><ul><ul><li>Difficult to determine the multiplier for delivering the right message to the right people </li></ul></ul>
What’s the Best Model? What Should Be Measured? What is the Influence Multiplier? www.drop.io/socialmediameasurement Glennette Clark Interactive Strategy Consultant LazySmart Consulting [email_address]
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