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Social Media ROI
Social Media ROI
Social Media ROI
Social Media ROI
Social Media ROI
Social Media ROI
Social Media ROI
Social Media ROI
Social Media ROI
Social Media ROI
Social Media ROI
Social Media ROI
Social Media ROI
Social Media ROI
Social Media ROI
Social Media ROI
Social Media ROI
Social Media ROI
Social Media ROI
Social Media ROI
Social Media ROI
Social Media ROI
Social Media ROI
Social Media ROI
Social Media ROI
Social Media ROI
Social Media ROI
Social Media ROI
Social Media ROI
Social Media ROI
Social Media ROI
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Social Media ROI
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Social Media ROI

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How can we measure the ROI of Social Media? So best practices are suggested in this presentation given to a group of Social Media practitioners in list 2011, Johannesburg, South Africa.

How can we measure the ROI of Social Media? So best practices are suggested in this presentation given to a group of Social Media practitioners in list 2011, Johannesburg, South Africa.

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  • The tough part of social media ROI is to tie a hard-rand value to the social media return.
  • The tough part of social media ROI is to tie a hard-rand value to the social media return.
    you use the ROI number to compare to other social media campaigns and also your TV, print, radio and other campaigns.
  • if you increase your return while keeping your investment the same, then you increase your ROI.
    Measure the financial efficiency of an investment.
    Because the ROI formula uses only two inputs – the return and the investment – the ROI formula is an easy way to measure and compare marketing campaigns.
  • Likes are a vehicle not a destination/goal
  • Likes are a vehicle not a destination/goal
  • Brand awareness and customer insights are softer issues, but can still have rand values attached.
  • *develop this more, either remove roi metrics or expand.
  • look at each type of social media return and develop a method for dollar quantification.
  • a combination of methods could give us a more accurate picture.
  • Plug the numbers into an ROI calculation
  • These numbers look good, so how do we present them to management/cfo to allocate budget to Social Media?
  • CLV on patients
  • CLV on patients
  • CLV on patients
  • Transcript

    • 1. SOCIALMEDIA : ROI
    • 2. Social Media is like teen sex, everyone wants to do it. No one actually knows how. When finally done, there is surprise it's not better. - Avinash Kaushik: Google's analytics evangelist via Twitter 2009 { }
    • 3. • Add Social Media to your existing marketing channels and hope to reach as many people as possible – Wrong! SOCIAL MEDIA MAXIMS • Post, Listen, Reply, Encourage feedback • Search and Social are integrated
    • 4. SOCIALMEDIA THE MODERN ONLINE PRESENCE: SIMPLIFIED THEWEBSITE OPTIMISATION SEARCH ENGINE
    • 5. The Altimeter Group asked 140 corporate social strategists about their 2011 planning 22.0% 24.6% 26.3% 29.7% 32.2% 34.7% 34.7% 37.3% 48.3% 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% Policies and Procedures Resources: Increasing budget/headcount Getting Tools and Technologies in Place Developing a Listening/Monitoring Solution Getting Buy-In from Stakeholders Applying Social Insights to Product Roadmap Determining an Organizational Model Internal Education and Training Creating ROI Measurements Source: Survey of Corporate Social Strategists, Altimeter Group, November 2010
    • 6. WHAT IS SOCIAL MEDIA ROI? ‘Social Media ROI is defined as a measure of the efficiency of a social media marketing campaign’ - DAG HOLMBOE, 2011
    • 7. MILLION DOLLAR QUESTION* *(AND WHY SHOULD WE MEASURE IT?) WHAT IS THE ROI OF SOCIAL MEDIA THE …
    • 8. 1 Compare the efficiency of marketing campaigns; Negotiate budgets with your management;2 Analyze and optimize current and future campaigns; 3 WHY SHOULD WE MEASURE IT? Financial accountability - as social media becomes mainstream, executives are holding them to the same accountability as other business initiatives, demanding financial returns and ROI on social media investments. 4
    • 9. THE FINANCIAL ORIGINS OF ROI ROI = (return – investment) % investment
    • 10. Social Media ROI = (SM return – SM investment) % SM investment LET’S ADAPT IT
    • 11. A WORKING EXAMPLE Last month, we attributed R50,000 in sales to our social media campaign. This is our ‘social media return’. Let’s assume that our investment in our social media campaign was R10,000. Using the ROI formula: Social media ROI = (R50,000 – R10,000) / R10,000 % = 400%
    • 12. SOCIAL MEDIA RETURN? • Sales • Customer Insights • Net New Customers • Brand Awareness • Etc… • *Not Likes • *Not Followers SOCIAL MEDIA RETURN IS THE VALUE THAT YOU DERIVE FROM YOUR SOCIAL MEDIA CAMPAIGN
    • 13. QUANTIFYING SM RETURN • Sales • Net New Customers HOW DO WE QUANTIFY A RETURN ON THE QUALITATIVE? • Brand Awareness • Customer Insights VS
    • 14. { } SM IS A MEANS TO AN END “We often approach social media like it’s the destination rather than the vehicle” - Hal Thomas A ‘like’ or a ‘follower’ can be compared to a business card handed out at an event. It represents potential, but needs to be acted on.
    • 15. SOCIALMEDIA ROI APPROACHING
    • 16. BEFORE TAKE A SNAPSHOT YOU START
    • 17. THE SNAPSHOT (BENCHMARK • Before you start the clock it is a good idea to benchmark where you’re at... • Make a note of the numbers (number of Facebook fans, Twitter followers, referrals from social media sites, plus existing website traffic). • Make a note of the less obvious benchmarks (such as SEO rankings and referrals, customer satisfaction scores and other business data). • Make a note of ROI benchmarks. How much are you paying to acquire customers via other marketing channels? How vast is that advertising budget, and how is it being split up? And what proportion is being directed into channels that you cannot accurately measure?
    • 18. UNDERSTAND THE VALUE OF YOUR CAMPAIGN
    • 19. QUANTITATIVE • Sales, unique visits, page views, followers, demographics, age, bounce rate, length of visit, etc… QUALITATIVE • Metrics that have an emotional component to them. For example, if 75% of the people who mention your product online call it “cheap” and only 25% call it “inexpensive,” that’s a qualitative metric that has an impact on your business. TYPES OF SM ROI MEASUREMENT
    • 20. ESTIMATING SOCIAL MEDIA RETURN HARD NUMBERS ARE NOT ALWAYS AVAILABLE HOW DO WE MEASURE RETURN? Finally, define how you will tie hard Rands to the social media return. THREE STEPS: 2. 1.Define your social media goal. Based on the goal, define your social media return. 3.
    • 21. SOCIAL MEDIA ROI ON SALES THREE STEPS: 1. Define the Goal: We want to increase sales. 2. Define the Sales that can be attributed to the Social Media campaign (Social Media Return) 3. What is the Rand value of those sales?
    • 22. • ANALYTICS • CAMPAIGN ONLY COUPON CODES • FORECASTED VS. ACTUAL SALES FOR THE PERIOD ATTRIBUTING SALES
    • 23. THREE STEPS: 1. Define the goal: Generate a high number of high-quality consumer insights from the social media campaign. 2. Define the social media return as the value of these consumer insights 3. Tie in hard Rands to the return by comparing what it would cost to generate the same quantity and quality of consumer insights using a focus group. SOCIAL MEDIA ROI ON CONSUMER INSIGHTS
    • 24. WE COMPARE… We use consumer insights equivalency. Traditional Focus group cost: R5000 No. consumer insights generated: 20 Ave Cost per consumer insight: R250 Count all consumer insights determined to be of equal or higher quality as the consumer insights from a focus group. Social media ROI = (consumer insights x R250 – cost of SM campaign) cost of SM campaign = ROI % HOW DO WE ATTACH A RAND VALUE TO CONSUMER INSIGHTS
    • 25. WE COMPARE AGAIN… 1. DEFINE THE GOAL 2. DEFINE THE SM RETURN 3. TIE IN A HARD RAND VALUE ALL SUPPORT CENTRES KNOW THE COST OF A SUPPORT CALL Social media ROI = (Support calls x Ave cost p/call – cost of SM campaign) cost of SM campaign = ROI % HOW DO WE ATTACH A RAND VALUE TO CUSTOMER SUPPORT CALLS
    • 26. • Forecast the number of calls without social media with historical data. • Over the period, the number of prevented support calls is the difference between forecasted and actual support calls. This is the social media return. HOW DO WE ATTACH A RAND VALUE TO CUSTOMER SUPPORT CALLS WITHOUT A HARD RAND VALUE
    • 27. CUSTOMER LIFETIME VALUE
    • 28. • Customer Lifetime Value (CLV) is the amount of revenue a customer will bring to a company over the course of their lifetime with the brand. • Eg. If you are an Internet Service Provider (ISP), and you know that the average customer stays with you for 3 years and spends R300 p/month. The CLV is R300 x 12 x 3 = R10 800. EXPLANATION AND CALCULATION
    • 29. • How much are you willing to spend to acquire that customer? • 10% of CLV? • If CLV is R10 800 then the company is willing to spend R1080 to acquire a customer. • So with a budget of R500 000, 463 customers should be acquired, bringing in roughly R10,000 000 over the next 3 years. THE USE OF CLV
    • 30. • The companies current marketing budget is R3,000 000 p/annum. • From current print and online advertising 2 500 new customers are acquired each year. • So for every R1200 spent, the company gets 1 x new customer. • Let’s allocate 10% of the annual marketing budget to social media (R300,000) • To allocate budget to Social Media (away from traditional media), 250+ new customers need to be generated from social media. APPLICATION AND CALCULATION
    • 31. CALCULATIONS TRADITIONAL SOCIAL MEDIA ROI = SM return – investment % investment ROI = SM return – investment % investment Budget = R3,000 000 Value of a Customer = R10 800 CLV Spend = 11% Customer acquisition cost = R1 200 Customers acquired = 2500 Budget = R300 000 Value of a Customer = R10 800 CLV Spend = 10% Customer acquisition cost= R1 080 Customers acquired = 277.77 ROI = 27,000 000 – 3,000 000 % 3,000 000 ROI = 3,000 000 – 300 000 % 300 000 ROI = 800% ROI = 900%
    • 32. • Raise awareness of a recently launched practice. Source: Techcrunch - 2010/07/17 CASE STUDY: DENTISTRY PRACTICE
    • 33. • TOOLS: Facebook, Youtube, Twitter, Groupon • PROBLEM: A new practice in a building that houses hundreds of other dentists that have more established practices. • SOLUTION: 70 facebook fans (@ publication on Techcrunch, July 2010), posting Yelp reviews on the page, posting educational dentistry clips on Youtube, a Groupon deal for patient exam and x-ray that attracted 320 new patients! CASE STUDY: DENTISTRY PRACTICE
    • 34. Facebook as AT NOV 2011 LANDING PAGE CASE STUDY: DENTISTRY PRACTICE
    • 35. CASE STUDY: DENTISTRY PRACTICE Facebook as AT NOV 2011 REVIEWS PAGE
    • 36. CASE STUDY: LOCNVILLE
    • 37. CASE STUDY: LOCNVILLE
    • 38. SOCIAL AND SEARCH • Both Google and Bing have confirmed that their search results are positively affected by social signals, such as tweets, Facebook Like and +1’s • Google is king because it’s algorithm measured which websites were “voting” for others by linking to them. • Enter social media, and search engines have taken what people are saying about brands and companies to heart. If people share your content, it’s probably pretty good.
    • 39. THE LANDING PAGE • A/B Split Testing • Call to Action
    • 40. GREAT TOOLS GOOGLE ANALYTICS • ITS FREE, IT IS A MUST FOR ANY WEBSITE/SOCIAL MEDIA CAMPAIGN HOOTSUITE • BASIC REPORTS FOR FREE; $5.99 FOR A PRO SUBSCRIPTION. • ACCESS TO (INSERT TABLE) SOCIAL MENTION • http://www.socialmention.com/
    • 41. TAKE AWAYS CONCEPTS Social Media Return Social Media ROI Customer Lifetime Value Benchmarking PROCESSES Continuous Improvement (Kaizen) Compare Compare Compare (A/B Split Testing, for landing pages)
    • 42. www.marketsonline.co.za luke@marketsonline.co.za THANK YOU +27 83 301 1408

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