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Getting to social roi


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Getting to social roi

  1. 1. Getting to Social ROI Black & White and Lots of Gray #SMWsocialROI September 20, 2011
  2. 2. Why is social ROI needed? Especially what the ROI of the website is (if there is no way to tie back sales) Instead it’s focused on engagement, awareness, retention. 2002… “ Why do I need a website?” “ The internet isn’t going to be around forever.” “ What’s the ROI of my website if I don’t sell any products?” 2011… nobody asks those questions anymore. That said…we’ll try to give some guidance on how to evaluate Social ROI today. Remember
  3. 3. What this presentation isn’t… We aren’t going to give you a $$ for Social Media ROI . Just like a website, the ROI of each marketing initiative is unique to the business and the initiative itself . We are going to share methodology and process for figuring out social ROI. FREE intellectual property. Yep. Why? To advance the industry beyond this question.
  4. 4. Measurement Culture & Governance <ul><li>To get to ROI, an organization must have a certain level of maturity with measurement </li></ul><ul><ul><li>Culture of Advertising = low </li></ul></ul><ul><ul><li>Culture of Research = medium </li></ul></ul><ul><ul><li>Culture of Measurement = high </li></ul></ul><ul><ul><li>Culture of Accountability = very high </li></ul></ul><ul><li>Social Media governance needs participation from leadership & SMEs in PR, Digital Comms, Market Research & Strategy, Product Mgmt, Customer Service, IT and Ops. </li></ul>ROI unlikely likely
  5. 5. Secrets to ROI Success <ul><li>Clearly defined business, marketing and consumer objectives. Yes, this is more difficult than you would believe to get marketers and agencies to take the time to do, and to do right. </li></ul><ul><ul><li>Marketing: Improve usability of home page and navigation to increase clarity of the path into consideration and ultimately conversion </li></ul></ul><ul><ul><li>Consumer: Help me find what ’s new and on sale </li></ul></ul><ul><ul><li>Business: Increase store locator visits from top navigation on non-ecomm sites </li></ul></ul><ul><li>Adoption, Belief, Trust: Deep understanding of objectives, and constant reminder and adherence to the objectives throughout the program by all business and agency stakeholders. </li></ul><ul><li>Targets/Goals: Accountability and incentives to meet defined targets/goals. </li></ul>
  6. 6. Model for Effective Social ROI #SMWsocialROI
  7. 7. Segment and Target Segment and Target
  8. 8. 1. Segment & Target – Know Your Audience <ul><ul><li>Investment decisions, and the potential returns expected, should be based in a clear understanding of the portion of your market that can be effectively engaged through social media </li></ul></ul>Step 1: Develop Social Segments/Personas e.g.,
  9. 9. Level-set Expectations Level-set Expectations
  10. 10. 2. Industry Will Drive ROI Possibilities High = 3, Med = 2, Low = 1 Researched Industry = high price-sensitivity, high commitment, low experience Referred Industry = low price-sensitivity, low commitment, high experience Mortage Air travel Movie Guided by Reference (Social) Guided by Research (SEO/PPC) Mortgage “Reference” Score = 1 out of 9. INDUSTRY PRICE S. LIFETIME COMMITMENT LIFETIME EXP. RESEARCH REFERENCE Mortgage 3 3 2 8 1 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0%
  11. 11. Set “Return” KPIs Set “Return” KPIs
  12. 12. 3. Determine “Return” Measures ONLINE CONVERSIONS ENGAGEMENT/ADVOCACY AWARENESS/AFFINITY (w/SENTIMENT) <ul><li>Register on site. </li></ul><ul><li>Content Likes </li></ul><ul><li>Avg comments/post </li></ul><ul><li>SoV </li></ul><ul><li>Purchase from site. </li></ul><ul><li>Content Shares </li></ul><ul><li>Avg retweet/post </li></ul><ul><li>Volume/Buzz </li></ul><ul><li>Comments </li></ul><ul><li>(Avg likes/post)/total page likes </li></ul><ul><li>Network Footprint (Page Likes, follows) </li></ul><ul><li>@ mentions </li></ul><ul><li>(Avg comments/post)/total </li></ul><ul><li>page likes </li></ul><ul><li>Retweets </li></ul><ul><li>(Avg retweet/post)/followers </li></ul><ul><li>Avg likes/post </li></ul>  Online Sales (3 - 1) Reference Level       Entertainment 3 8   Apparel 3 7   &quot;Hard&quot; & &quot;Soft&quot; Social Media ROI Hotel 3 6   (Revenues, LTV-Affinity & Advocacy) Personal Care 3 6       Air travel 3 5       Furniture 2 4       Bev 1 4       Food 1 4       Appliances 2 3       Auto 2 3       Mortgage 2 2   &quot;Soft&quot; Social Media ROI H/A Insurance 2 2   (LTV-Affinity & Advocacy) Healthcare 1 1  
  13. 13. Social ROI – CM Definitions <ul><li>Investment (cost) comes from: </li></ul><ul><ul><li>Tools </li></ul></ul><ul><ul><li>Staff & Consulting </li></ul></ul><ul><ul><li>Training </li></ul></ul><ul><ul><li>Tech & Creative </li></ul></ul><ul><li>Returns can come via: </li></ul><ul><ul><li>Conversions/Activity </li></ul></ul><ul><ul><li>Engagement/Advocacy </li></ul></ul><ul><ul><li>Awareness/Affinity </li></ul></ul>
  14. 14. Measurement Approaches Measure
  15. 15. 4. Approach #1 Conversion <ul><li>Online conversions example: </li></ul>1,054,000 Direct social media referrals (click-throughs to purchase CTA) 8% Conversion rate $9.99 Per conversion $842,356 Revenue Contributed $250,000 Period Project Cost (Rev Contributed – Cost) / (Cost) 237% Return on Investment
  16. 16. 4. Approach #2 Engagement / Advocacy <ul><li>What constitutes an engaged fan? </li></ul><ul><ul><li>An estimator for referrals and lifetime value of customer. </li></ul></ul><ul><ul><li>Measures “actions” taken around the brand in social networks. </li></ul></ul><ul><ul><ul><li>Comment, Like, @ Mention, Retweet </li></ul></ul></ul><ul><ul><li>Attributes increasing value to “deeper” involvement with content: </li></ul></ul><ul><ul><ul><li>Comment > Like </li></ul></ul></ul><ul><ul><li>Uses ratios to normalize engagement, example (month): </li></ul></ul><ul><ul><ul><li>40 mentions & retweets / 1000 followers = 4% engagement in Twitter </li></ul></ul></ul><ul><ul><ul><li>800 content likes / 24,000 page likes = 3.3% engagement in FB </li></ul></ul></ul>
  17. 17. 4. Approach #2 Engagement / Advocacy <ul><li>Engagement / Advocacy </li></ul>Estimated via consumer insight research (survey) 1,500,000 Current Social Media Reach 45,000 Engaged &quot;fans” (3%) $17.48 1.75 additional purchases at $9.99 each $786,600 Revenue $250,000 Period Project Cost (Revenue – Cost) / (Cost) 215% Return on Investment
  18. 18. 4. Approach #3 Awareness / Affinity <ul><li>Attributing value to sentiment: </li></ul><ul><ul><li>A potential estimator of market share and purchase intent. </li></ul></ul><ul><ul><li>Volume = How much is being said? </li></ul></ul><ul><ul><li>Reach/Footprint = How broadly is it being viewed? </li></ul></ul><ul><ul><li>Sentiment = What is being said? Does it indicate intent to purchase or recommend? </li></ul></ul>Use survey to: <ul><ul><li>Quantify market size of SM-driven consumers, </li></ul></ul><ul><ul><li>Determine social media impact on purchase intent, and </li></ul></ul><ul><ul><li>Correlate opinion impact on purchase intent. </li></ul></ul>Monitor sentiment & tag social media content Primary research: determine impact of SM on PI Estimated Change in PI based on change in content + =
  19. 19. 4. Approach #3 Awareness / Affinity <ul><li>Estimate potential sales through changes in sentiment </li></ul><ul><ul><li>Results from survey/focus group: </li></ul></ul><ul><ul><li>60% of people within reach via social media would buy based on social media. </li></ul></ul><ul><ul><li>74% of those people are currently indifferent between our product and competitors’. </li></ul></ul><ul><ul><li>Among “ indifferents ” perception of increased positive conversation about brand in their networks has the following impact : </li></ul></ul>Example purchase intent, actuals to be calculated by client. If sentiment increases… Likelihood to buy increases… 0% - 2% 0% 3% - 6% 5% 7% - 10% 7% 11% - 20% 12%
  20. 20. 4. Measurement #3 Awareness / Affinity <ul><li>Awareness / Affinity </li></ul>1,500,000 Current Social Media Reach 900,000 Current Social Media Addressable Market (60% - from survey) 666,000 Currently Indifferent (74% of the addressable 60%) 12% Positive Sentiment Increase 79,920 Added potential buyers $798,401 Revenue Increase at $9.99 each $250,000 Period Project Cost (Revenue – Cost) / (Cost) 219% Return on Investment
  21. 21. Optimize Optimize
  22. 22. Optimize <ul><li>Social Media Content & Engagement Approach </li></ul><ul><li>Social + Web Integration points (A/B) </li></ul>If targets were missed: <ul><ul><li>Measurement data is baseline to re-evaluate the “reality” of return expectations, focus on highest-return approaches/channels, and set the associated investment levels </li></ul></ul>If targets were reached: <ul><ul><li>Measurement data sets benchmarks for new objectives, improves on or decommissions lower-return approaches/channels, and guides subsequent investment levels. </li></ul></ul>
  23. 23. Social Media Optimization Process <ul><li>Strategy, Technology, Analysis. </li></ul>Develop <ul><ul><li>Current State Analysis </li></ul></ul><ul><ul><li>Optimization Strategy - Objectives & KPIs </li></ul></ul><ul><ul><li>Test Business Requirements </li></ul></ul><ul><ul><li>Detailed Test Design </li></ul></ul><ul><ul><li>Creative Reviews </li></ul></ul><ul><ul><li>Software integration (Awareness, Optimost, NextStage Evolution, etc) </li></ul></ul><ul><ul><li>Implementation </li></ul></ul><ul><ul><li>Run Test </li></ul></ul><ul><ul><li>Analysis & Recommendations for next test </li></ul></ul>Discovery Design Delivery Definition Team & Program Management
  24. 24. Drumroll… Governance
  25. 25. So is social ROI worth the effort? <ul><li>Points to ponder… </li></ul><ul><li>What is the ROI of figuring out Social ROI ? When does it become diminishing returns? </li></ul><ul><li>( </li></ul><ul><li>Is it best to let the Universities and PhD’s focus on this problem, while instead marketers focus on optimization of content in the space instead with their $? </li></ul><ul><li>Are these models close enough to be indicative of ROI – enough to justify the budget? </li></ul><ul><li>Will you have enough budget to staff a measurement and social media team to ensure you get this ROI? And how do they impact that overall ROI? </li></ul>
  26. 26. Questions @shainaboone @scotwheeler
  27. 27. Thank You