Measuring Social Media: Where's the ROI?
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Measuring Social Media: Where's the ROI?

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http://www.spiral16.com Social media ROI is tough to calculate because its a financial metric, and social media's value is not inherently financial. But the challenge isn't new -- finding ROI is ...

http://www.spiral16.com Social media ROI is tough to calculate because its a financial metric, and social media's value is not inherently financial. But the challenge isn't new -- finding ROI is difficult in other programs and campaigns as well. This presentation gives you 6 steps you can follow to measure an effective social media program.

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Measuring Social Media: Where's the ROI? Measuring Social Media: Where's the ROI? Presentation Transcript

  • Measuring Social Media: Where’s the ROI?
    Tracy Panko
    @TracyPanko
    @spiral16
  • Social Media is a Game Changer
    It gives people a voice.
    Social media is radically changing
    cultures all over the world.
    *Egypt revolution, TedNguyenUSA.com
  • The Ability to Share Experiences Isn’t Going Away
    An average of 900,000 blog posts a day
    4-6 million tweets an hour on average
    Over 30 billion pieces of content (videos, notes, status updates, pages) shared on Facebook in a month
    * AIGA.org
  • Social Media is Transforming Business Culture & Methodology
    “In the future, there will be two types of companies:
    Those that are agile and adapt to consumers’ changing business behavior …
    and those that go out of business.”
    Of the 500 original companies listed on Standard & Poor’s 500 in 1957, only 17% remained in 2007.
    - Forrester research, CMO Mandate: Adapt or Perish
  • Active Brand Marketing
    “This is the approach that marketers must take to avoid extinction and thrive in the digital age.”
    Active brand marketing-A flexible approach in which marketers respond quickly to their environment to align consumer and brand goals and maximize return on equity.
    - Forrester research, CMO Mandate: Adapt or Perish
  • Adapting is a Challenge …
    64% of marketers experienced problems trying to implement digital marketing initiatives.
    Only 4% of marketing leaders feel that they are prepared to exploit digital marketing opportunities.
    - Accenture Interactive 2010 study
    …but it’s also a huge
    opportunity.
    Photo credit: stasisconsulting.com
  • Build Relationships and Develop Trust with Your Customers
    • People want to participate in conversation.
    • People want to be part of a community.
    • People don’t want to be marketed or broadcast to.
    Photo credit:www.flickr.com/photos/sadaiche/
  • Start With What You Know
    You’ve identified your company’s business goals already.
    Company goals
    Social media campaign
    Success
    Now think about how you can achieve those goals through a social media program
  • Social Media Progam is a Component,
    Use it to support your existing business strategy.
    • Create a structure for your program based on the unique needs of your company.
    • Build it from the ground up.
    • The more customized, the better.
  • Social Media Isn’t Free.
    It takes valuable time.
    You need human resources for:
    Planning
    Creative insight
    Content creation
    Product management
    Measurement
    Monitoring
    …and more.
  • Why Social Media ROI is Tough
    ROI = (Gain from Investment) - (Cost of Investment)
                         Cost of Investment
                                        
     
    Return on investment is a financial metric. 
     
    That financial aspect is not clearly defined in social media—it’s not built-in.
  • But This Challenge Isn’t New
                                        
     
    Calculating ROI for print ads and radio ads has always been difficult.
    Metrics relies on the people influenced by print and radio self-identifying themselves or coupon codes being recorded and collected. 
     
    Calculating ROI for social media is also difficult because it is integrated into your overall strategy—it is hard to separate.
  • There is no way to calculate social media ROI with a one-size-fits-all equation.
                                        
     
    Image from glynndevins.com -- and modified
  • 6 Steps To An Effective Social Media Campaign
                                        
     
    Identify business goals.
    Align goals with social media program.
    Establish benchmarks.
    Set realistic targets.
    Measure KPIs to determine success.
    Look at results, find ways to improve.
  • 1. Identify Business Goals
    Make sure your social media initiatives (nonfinancial)
    are supporting your business goals (financial)
                                        
     
    Think about this:
    Where is the company now?
    Where does it want to be?
    What will it take to get there?
  • What Do You Hope to Gain?
    • Increase Total Sales
    • Reduce Customer Service Expenses
    • Acquire New Customers
    • Reduced Cost Per Transaction
    • Increase in Qualified Leads
    • Higher Value Per Sale
    • Increase in Customer Satisfaction
    • Increase in Reach
    • Introduce New Products/Service Enhancements
    • Attract New Employees
    • Encourage Repeat Purchases/Build Customer Loyalty
     
  • 2. Align Social Media Program with Goals
    Avon tinkered with its well-known door-to-door and catalog-based direct sales model by empowering its salespeople with social selling tools like its FacebookeBoutique and iPhone app.
    Social media platform
    Avon Connects virtually
    attaches consumers to their
    local Avon rep, at which point
    traditional face-to-face
    service begins.
     
  • Tools Are Not Strategies
     
     
     
     
     
    • Twitter
    • Facebook/MySpace
    • Blogs
    • Forums
    • YouTube
    • Foursquare/Gowalla
    • Flickr
    • Webinars
    • Podcasts
    Being active on these platforms is only important
    if
    using them helps you reach your goal.
  • Listening Goals
    Who is saying what, when, and where?
     
     
     
     
     
    • Protect your reputation
    • Facilitate customer support
    • Invite innovation
    • Build trust
    • Market through conversation (promote and sell)
    • Gather business intelligence
    - Jason Falls, Social Media Explorer
  • Measurement Goals
    What are you getting out of it?
     
     
     
     
     
    • Improve branding and awareness
    • Protect and improve reputation
    • Build community or advocacy
    • Increase customer satisfaction
    • Harvest research & development
    • Drive sales or leads
    - - Jason Falls, Social Media Explorer
  • 3. Establish Benchmarks
     
     
     
     
     
    What does your online presence look like before the program?
    There are numerous free and paid tools to determine this:
    • Free monitoring solutions – Google Alerts, Twitter Search, Social Mention, PeopleBrowsr, IceRocket
    • Paid monitoring solutions – Lithium, Radian6, Sysomos, Trackur
    • Online listening & research solutions – Spiral16, Crimson Hexagon, Cymfony, ConsumerBase
    • Influencer tools – Alltop, Klout, mBlast, Postrank
  • Common Metrics
     
     
     
     
     
    Frequency and volume of:
    • Twitter followers
    • Retweets
    • Facebook likes
    • Brand mentions
    • Blog comments
    • YouTube views
    • Number of check-ins
    Are these things important?
    Ask yourself which ones matter to your business.
  • Advanced Metrics
     
     
     
     
     
    • Volume of brand mentions
    • Share of voice
  • Advanced Metrics
     
     
     
     
     
    • Positive/negative sentiment ratios
    • Positive/negative volume over time, correlation
  • Advanced Metrics
     
     
     
     
     
    • Penetration of marketing keywords
    • Create custom data sets to discover trends
  • Advanced Metrics
     
     
     
     
     
    • Identify influencers in your topic or around your brand
    • Discover how brand messages spread across the Web
  • Advanced Metrics
     
     
     
     
     
    • Learn what types of sites are the most relevant
  • 4. Set Realistic Targets
     
     
     
     
     
    Social media campaigns can be some of the least expensive ways to grow sales and awareness.
    Set specific targets based on your company goals:
    Increase total sales by 5%
    Increase cost savings by 15%
    10% increase in qualified leads
    Convert 5% followers and “likes” to transacting customers
    Grow online community to 10,000 members
    20% increase in customer satisfaction
    Increase total transactions by 7%
  • 5. Measure KPIs to Determine Success
    Look only at the metrics that concern your goal.
     
     
     
     
     
    • Website metrics/traffic
    • Social audience metrics
    • Fans/Followers/Friends
    • Conversions
    • User-generated content
    • Comments
    • Ratings/Reviews
    • Downloads
    • Volume of conversation
    • Search metrics
    • Sentiment & tone
    • Backlinks
    • Competition comparison
    • Share metrics
    • Referrals
    • Click throughs
    - Jason Falls, Social Media Explorer
  • Correlate Traditional with Online Metrics
    This process requires detective work.
    It isn’t always obvious.
    Patterns reveal themselves as you sort and filter results.
    • Actual sales
    • Retail traffic
    • # of transactions
    • New customers
    • Amount per transaction
    • Leads
    • Surveys
    - Social Media ROI, Olivier Blanchard
  • Put Results on a Timeline
    Did you see spikes in sales in correlation with your social media efforts?
    What other patterns
    can you identify?
  • Measuring Social Media Programs Can Find Real Savings
     
     
     
     
     
    In 2009, Ford built early awareness for the Fiesta with influential bloggers who tested and wrote about it
    In 2010, Ford launched the Fiesta Project, an effort to capture user-generated video.
    As a result, Ford learned it could reduce cost of subsequent launches by as much as 90%.
    - Forrester research, CMO Mandate: Adapt or Perish
  • 6. Look at Results, Find Ways to Improve
     
     
     
     
     
    The great thing about web measurement is …
    You don’t have to wait for all your results.
    They update as the program continues.
    And you have every opportunity to view those results and make changes to your program along the way.
  • It’s Not Always Difficult
    Sometimes just being able to illustrate that you have the ability to create business gains through social media is enough …
    …to reach your goal.
  • Conclusions
    Goal: Understand that social media represents a new set of measurements that can be correlated with your traditional financial metrics.
    Challenge: Figure out which social media metrics can support your business objectives and be correlated to increase your ROI.
  • Thank you from
    Special thanks to the organizers of
    NAMA
    Tracy Panko
    @Spiral16
    @TracyPanko