Olivier Blanchard Basics Of Social Media Roi

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The what, why and how of Social Media ROI: Business definitions, methodologies and situational narrative. This presentation's purpose is to clarify what ROI is and isn't within the context of Social …

The what, why and how of Social Media ROI: Business definitions, methodologies and situational narrative. This presentation's purpose is to clarify what ROI is and isn't within the context of Social Media and offers a basic explanation of how to tie Social Media activities to real ROI.

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  • 1. Enough with
    the Social Media BS.
    Give me the realz.
    Social Fresh Conference // 24 August 2009
  • 2. SOCIAL MEDIA IS NOT FREE.
  • 3. 1. It takes people.
  • 4. 2. It takes technology.
  • 5. 3. It takes time.
  • 6. We have… rocks.
    … all of which are limited resources.
  • 7. These resources
    =
    100%
    of your budget
    E-Marketing
    Each resource
    has a specific cost
    Head Count
    Advertising
    I.T.
    Inbound Call Center
    Each resource
    yields specific results
    Marketing
    Sales Dept.
    Accounting
    Public Relations
  • 8. These resources
    generate
    100%
    of your business
    E-Marketing
    Losing even 1%
    of your budget’s efficiency
    could seriously ruin
    your day.
    Head Count
    Advertising
    I.T.
    Inbound Call Center
    Marketing
    Sales Dept.
    Accounting
    Public Relations
  • 9. Okay fine. But if
    I’m going to take a chance
    on this social media thing,
    it had better make good business
    sense! Why should I allocate
    resources to it?
  • 10. Reason #1:
    It will result in a cost reduction.
    Maybe in customer service?
    You mentioned something about
    business intelligence and
    market research?
    Reason #2:
    It will generate more revenue.
    I want more transactions,
    more net new customers,
    more customer loyalty,
    etc.
  • 11. Now go figure out what
    Program you have to cut
    to fund this Social Media thing.
    Remember that our bonuses
    are on the line.
  • 12. 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?
  • 13. SAY HELLO TO:
    Business Justification
    R.O.I.
  • 14. R.O.I.
    RETURN
    ON
    INVESTMENT
  • 15. THE R.O.I. EQUATION
    Investment
    Expectation of return
  • 16. THE R.O.I. EQUATION
    (GAIN FROM INVESTMENT - COST OF INVESTMENT)
    ROI =
    COST OF INVESTMENT
  • 17. 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.
  • 18. Reason #1:
    COST REDUCTION
    Reason #2:
    REVENUE GENERATION
    Remember what Mr. Bossman said…
  • 19. I shrank my PR budget by 20%
    and my outbound call budget by 40%.
    Now I can afford a team of social media
    Rock stars. Can I get a hellz yeah?
    Okay, hotshot,
    You have your Social Media doohickey.
    Now I’d better see some real results!
    Or else…
  • 20. Woohoo!
    I have a job!!!
  • 21. Dudes, we are
    ON THIS!!!
    Let’s start engagin’!!!
    I call dibs on the
    Corporate blog.
  • 22. Cool.
    ACCOUNTING
    One Month Later…
  • 23. What about our
    Twitternets?
    Oh my! Look at all the new
    visitors to our website!
    and all of our FaceBook friends!
    Hot Damn, we even have
    comments on the blog!
  • 24. This rocks!
    I never had it so
    good!!!
  • 25. Cool.
    ACCOUNTING
    Three Months Later…
  • 26. Yeah but…
    What about
    the P&L?
    Monitoring to base…
    Monitoring to base…
    Our Google Analytics are through
    the roof! Even our social mentions
    are wicked good!
    We have liftoff!
  • 27. Measuring media
    really rocks my
    world.
  • 28. Nope.
    Anything?
    Nada.
    ACCOUNTING
    Six Months Later…
  • 29. What kind of mood is
    The old man in today?
    Not good.
    He doesn’t care how many visitors
    the website gets, or how many
    eyeballs we estimate we’ve reached unless it means we’re selling
    more stuff.
  • 30. But why?
    Our website is getting
    mad hits, Jack!
    And we have 3,000 followers
    on Twitter now!
    I’m sorry, son.
    If your Social Media program
    is generating revenue, we aren’t
    seeing it. We need to allocate
    resources where we can
    make money.
    It’s just business.
  • 31. Darn it.
    This media measurement
    stuff isn’t working.
    We need to start
    tying this stuff to actual
    Business performance.
    Where to start?
    Let’s see…
    At the beginning?
  • 32. Things happen in sequence.
  • 33. Non-financial impact is not ROI (yet).
  • 34. 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
  • 35. Non-financial impact = potential.
  • 36. ROI = actualized potential.
  • 37. Reason #1:
    COST REDUCTION
    Reason #2:
    REVENUE GENERATION
    Remember what Mr. Bossman said…
  • 38. I need proof that
    what we’re doing
    is actually working.
    Start with proof of concept.
  • 39. Step 1: Establish a baseline
    8% YoY Growth
  • 40. Baselines illustrate deltas (changes)
    Is something happening here?
  • 41. Step 2: Create Activity Timelines
  • 42. Step 2: Create Activity Timelines
  • 43. Step 2: Create Activity Timelines
  • 44. Step 3: Look at Sales Revenue
  • 45. Step 3: Also look at # of transactions
  • 46. Step 3: Also measure net new customers
  • 47. 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)
  • 48. The latest numbers indicate
    that our YoY sales $ are up 60%.
    Our individual transactions have doubled,
    as have our transacting customers.
    Something’s working!
    Groovy!
    Let’s figure out what.
  • 49. Step 4: Measure transactional precursors
  • 50. Step 4: Measure transactional precursors
  • 51. Step 4: Measure transactional precursors
  • 52. We overlaid all of our timelines
    and noticed that since our social media
    activities began, our website visits are up,
    our social mentions are also up, and
    everyone seems to love us.
    So is there a
    discernable pattern
    in this?
  • 53. Step 5: Overlay all timelines
    activities
    social data
    web data
    transactions
    loyalty metrics
    etc.
  • 54. Step 6: Look for patterns
    Impact
    Uncertain Impact
    Impact
    Impact
    No Impact
    Before
    After
  • 55. Step 7: Prove relationships
    How was this group
    Touched by SM?
    Before
    After
  • 56. 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.
  • 57. THE R.O.I. EQUATION
    (GAIN FROM INVESTMENT - COST OF INVESTMENT)
    ROI =
    COST OF INVESTMENT
  • 58. THE R.O.I. EQUATION
    Investment
    Expectation of return
  • 59. Oh wow.
    This R.O.I. thing
    wasn’t at all about
    measuring media,
    impressions and
    eyeballs!
  • 60. All things remaining the same…
    We may have
    proof of
    concept.
    Hot damn!
    ACCOUNTING
    First things first: Prove that Social Media works
  • 61. So it turns out that our
    Social Media program is impacting
    every aspect of our business except
    traffic in our brick and mortar stores.
    Can you get on that? Yeah. We need
    to find out why we aren’t having
    an effect there. Kthxbye.
    Then use what you know to make it work better.
  • 62. More store traffic.
    Roger that.
    Dudes, we are
    ON THIS!!!
    Let’s start engagin’!!!
    I’ll start crafting some
    wicked blog posts.
  • 63. Finally, someone with some
    real metrics for me to sink my teeth into!
    Good job, Sparky! You done gewd!
  • 64. So I guess Social Media
    is going to stick around a little while
    longer after all, isn’t it?
    Yessir.
    Looks like our budget
    is safe for now.
  • 65. Drinks for
    Everybody!
  • 66. Olivier Blanchard
    Principal, BrandBuilder Marketing
    864.630.7398
    www.thebrandbuildermarketing.com
    @thebrandbuilder(on Twitter)
    www.smroi.net
  • 67. Slideography
    Slide # Source
    3, 9, 10, 11, 18-31,
    37, 38, 48, 52, 56,
    59-65
    4
    6
    UFO (TV series)
    http://ufoseries.com/
    http://www.minnpost.com/stories/2008/06/18/2282/this_doesnt_compute_as_more_women_enter_scientific_fields_their_numbers_in_computer_science_are_declining
    Kim Jong Il puppet, from “Team America”
    http://blogs.rockymountainnews.com/bridget/kimjongil.jpg