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SMiB09 Olivier Alain Blanchard

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Financial vs. Non Financial Measurement ...

Financial vs. Non Financial Measurement
Oliver Blanchard (Brandbuilder Marketing) - Outlining the differences between financial measurement (R.O.I.) and non-financial measurement, then explaining why understanding that distinction is important to organizations.

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  • 1. Social Media R.O.I.
    olivier alainblanchard
    @thebrandbuilder
    SMiB Conference
    London, UK
    23 October 2009
    #SMiB
  • 2. “Social Media R.O.I.
    is overrated.”
    “Social Media is about sharing things we are passionate about.”
  • 3. Translation:
    “We have no @#$*& clue
    What R.O.I. actually is.”
  • 4. R.O.I.
    RETURN
    ON
    INVESTMENT
  • 5. THE R.O.I. EQUATION
    Investment
    Expectation of return
  • 6. THE R.O.I. EQUATION
    (GAIN FROM INVESTMENT - COST OF INVESTMENT)
    ROI =
    COST OF INVESTMENT
  • 7. Truth about R.O.I.
    ROI is a business metric,
    not a media metric.
    ROI is 100% media-agnostic.
    Only measuring digital or social won’t get you anywhere.
  • 8. Why is this important?
  • 9. These resources
    =
    100%
    of your budget
    These resources
    generate
    100%
    of your business
    E-Marketing
    Head Count
    Advertising
    I.T.
    Inbound Call Center
    Marketing
    Sales Dept.
    Accounting
    Public Relations
  • 10. Understand that a new
    Social Media program’s
    funding doesn’t appear
    out of thin air.:
    Which buckets do we empty
    to fill this new one?
  • 11. R.O.I.
    Business Justification
  • 12. How much is this
    going to cost me?
    What will this do for us?
    Mr. Bossman has simple questions.
  • 13. “Social Media R.O.I.
    is overrated.”
    (Not knowing what you’re talking about has exactly zero value.)
  • 14. SOCIAL MEDIA IS NOT FREE.
  • 15. 1. It takes skilled people.
  • 16. 2. It takes technology.
  • 17. 3. It takes time and effort.
  • 18. We have… rocks.
    … all of which are limited resources.
  • 19. Reason #1:
    COST REDUCTION
    Reason #2:
    REVENUE GENERATION
  • 20. Return On Influence?
    Return On Interest?
    Return On Intuition?
    Return on Inovation?
    Return On Imitation?
    Return on Incompetence?
    Return On Idiocy?
    Return on Incompetence?
    (Not knowing what you’re talking about has exactly zero value.)
  • 21. Stop the nonsense.
    Just Stop it.
  • 22. Financial vs. Non-financial Impact
    Non-Financial
    Financial
  • 23. Types of non-financial impact
    Customer complaints
    Website Visitors
    Impressions
    Positive press
    Click-throughs
    YouTube views
    Retweets
    Coupons distributed
    Visitors to a brick & mortar store
    Positive WOM
    Delivered emails
    Negative press
    Negative WOM
    Employment applications
    Blog comments
    FaceBook friends
    Social mention
    Twitter followers
  • 24. Things happen in sequence.
  • 25. Non-financial impact is not ROI (yet).
    Too many agencies only measure here.
  • 26. Non-financial impact = potential.
  • 27. ROI = actualized potential.
  • 28. Reason #1:
    COST REDUCTION
    Reason #2:
    REVENUE GENERATION
    Mr. Bossman doesn’t care about web traffic.
  • 29. Measuring transactional precursors
  • 30. Non-Financial Impact as transactional precursors
  • 31. Measuring transactional precursors
  • 32. Meauring Sales Revenue
  • 33. If you can, also look at # of transactions
  • 34. Also measure net new customers
    NNC is a measure of effective reach,
    not just media reach.
  • 35. Transaction data should be specific
    F.R.Y.
    FREQUENCY, REACH, YIELD
    How often customers transact. (transactions per month)
    How many customers you are reaching. (net new customers)
    How much they spend. ($ per transaction)
  • 36. Overlay your data as a timeline
    activities
    social data
    web data
    transactions
    loyalty metrics
    etc.
  • 37. Look for patterns
    Impact
    Uncertain Impact
    Impact
    Impact
    No Impact
    Before
    After
  • 38. Prove & disprove relationships
    How was this group
    Touched by SM?
    Before
    After
  • 39. Prove & disprove relationships
    How are these elements
    Connected to each other?
    Before
    After
  • 40. Prove & disprove relationships
    Is one of these elements
    A financial metric?
    Before
    After
  • 41. Prove & disprove relationships
    How do the non-financial and the financial elements connected?
    Before
    After
  • 42. How long
    will all this
    analysis take?
    It’s all a process
    of elimination, really.
    Isolating patterns,
    quantifying deltas,
    proving ad-hocs…
    Then all
    we have to do is
    figure out what the cost
    savings and revenue gains
    are, and plug them
    into the equation.
  • 43. Oh wow.
    This R.O.I. thing
    wasn’t at all about
    measuring media,
    impressions and
    eyeballs!
  • 44. Finally, someone with some
    real metrics for me to sink my teeth into!
    Good job, Sparky! You done gewd!
  • 45. Drinks for
    Everybody!
  • 46. Ask away.
    www.SMROI.net
    Olivier Blanchard
    864.630.7398
    www.thebrandbuildermarketing.com
    @thebrandbuilder(on Twitter)