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

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