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SMiB09 Olivier Alain Blanchard
 

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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    SMiB09 Olivier Alain Blanchard SMiB09 Olivier Alain Blanchard Presentation Transcript

    • Social Media R.O.I.
      olivier alainblanchard
      @thebrandbuilder
      SMiB Conference
      London, UK
      23 October 2009
      #SMiB
    • “Social Media R.O.I.
      is overrated.”
      “Social Media is about sharing things we are passionate about.”
    • Translation:
      “We have no @#$*& clue
      What R.O.I. actually is.”
    • R.O.I.
      RETURN
      ON
      INVESTMENT
    • THE R.O.I. EQUATION
      Investment
      Expectation of return
    • THE R.O.I. EQUATION
      (GAIN FROM INVESTMENT - COST OF INVESTMENT)
      ROI =
      COST OF INVESTMENT
    • 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.
    • Why is this important?
    • 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
    • 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?
    • R.O.I.
      Business Justification
    • How much is this
      going to cost me?
      What will this do for us?
      Mr. Bossman has simple questions.
    • “Social Media R.O.I.
      is overrated.”
      (Not knowing what you’re talking about has exactly zero value.)
    • SOCIAL MEDIA IS NOT FREE.
    • 1. It takes skilled people.
    • 2. It takes technology.
    • 3. It takes time and effort.
    • We have… rocks.
      … all of which are limited resources.
    • Reason #1:
      COST REDUCTION
      Reason #2:
      REVENUE GENERATION
    • 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.)
    • Stop the nonsense.
      Just Stop it.
    • Financial vs. Non-financial Impact
      Non-Financial
      Financial
    • 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
    • Things happen in sequence.
    • Non-financial impact is not ROI (yet).
      Too many agencies only measure here.
    • Non-financial impact = potential.
    • ROI = actualized potential.
    • Reason #1:
      COST REDUCTION
      Reason #2:
      REVENUE GENERATION
      Mr. Bossman doesn’t care about web traffic.
    • Measuring transactional precursors
    • Non-Financial Impact as transactional precursors
    • Measuring transactional precursors
    • Meauring Sales Revenue
    • If you can, also look at # of transactions
    • Also measure net new customers
      NNC is a measure of effective reach,
      not just media reach.
    • 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)
    • Overlay your data as a timeline
      activities
      social data
      web data
      transactions
      loyalty metrics
      etc.
    • Look for patterns
      Impact
      Uncertain Impact
      Impact
      Impact
      No Impact
      Before
      After
    • Prove & disprove relationships
      How was this group
      Touched by SM?
      Before
      After
    • Prove & disprove relationships
      How are these elements
      Connected to each other?
      Before
      After
    • Prove & disprove relationships
      Is one of these elements
      A financial metric?
      Before
      After
    • Prove & disprove relationships
      How do the non-financial and the financial elements connected?
      Before
      After
    • 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.
    • Oh wow.
      This R.O.I. thing
      wasn’t at all about
      measuring media,
      impressions and
      eyeballs!
    • Finally, someone with some
      real metrics for me to sink my teeth into!
      Good job, Sparky! You done gewd!
    • Drinks for
      Everybody!
    • Ask away.
      www.SMROI.net
      Olivier Blanchard
      864.630.7398
      www.thebrandbuildermarketing.com
      @thebrandbuilder(on Twitter)