ROI in Social Media

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How can you measure value in Social Media?

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ROI in Social Media

  1. 1. ROI i inSocial Media
  2. 2. Social Media M di is not free
  3. 3. Normal distribution of technology adoption
  4. 4. Early adoption
  5. 5. Half the money I spendon advertising i wasted; d ti i is t dthe trouble is I don’t knowwhich half!John Wanamaker
  6. 6. Three reasons why there’s no ROI on Social MediaFirst,First too many metrics; andROI is based in project finance; soWhat is the value of a …Source: Forbes Magazine, August 2012
  7. 7. The ROI Calculation ROI=(G-C)/C G = Gain from Investment C = Cost of Investment
  8. 8. Bonobos exclusiveTwitter onlysale created ROI of 1200% Source: Bonobos/Twitter 2011
  9. 9. ROI is fluid ROI
  10. 10. YouTube channel drove 700%increase in sales
  11. 11. Customer community400% i improvement in NPS ti$4m reduction inservice costs
  12. 12. The Social Media ROI Calculation ROI=((G+E)-C)/C G = Tangible Gain from Investment E = Estimated Intangible Gains C = Cost of Investment
  13. 13. Econometric modellingEconometric models how the variance orfluctuations seen in any given output aredue to hd t changes i certain i in t i input variables. t i bl If we do X what happens to Y?
  14. 14. Econometric modelling of media performanceIdentify and quantify impact factors such as media, priceand promotional reach, as well as less controllablefactors, such as market conditions and competitor activity.Determine an optimal media strategy to achieve a fixedtarget (i.e. volume or value) or maximum returns for afixed budget budget.Identify baseline sales that would naturally occur withoutmedia spend then calculate the business’ true incrementalreturn on media investment.Source: www.quantium.com.au/econometric-modelling
  15. 15. Appropriate use of Econometric ModellingMass Media Digital Direct MarketingTVC Search marketing Direct mailOut of Home Banner advertising g Telemarketing gSponsorship Social media eDM Test/Control MeasurementEconometric Modelling Econometrics Online impact on offline sales O li i t ffli l Test/Control Accurate reach, CTR and A t h dSource: www.profit-tech.com referral rates
  16. 16. Social Media Return on Investment Investment Action Attraction Engagement g g Key input factors y p Referral Return Key outcome Adapted from: Social Media is Dead, Long Live Social Media ROI, Stefanos Karagos, March 2011
  17. 17. Social Media Return on Investment Investment $25,000 invested in social media Action LinkedIn Company Page and Group launched Attraction 5,500 5 500 people join G l j i Group, 49% growth rate th t Engagement g g 1.57% engagement rate Referral 37 referrals to website Return $150,000 in consultancy services attained Adapted from: Social Media is Dead, Long Live Social Media ROI, Stefanos Karagos, March 2011
  18. 18. Social Media Return on Investment Investment Action Attraction Engagement g g Referral Return Adapted from: Social Media is Dead, Long Live Social Media ROI, Stefanos Karagos, March 2011
  19. 19. If you don’tknow where you re you’regoing,going you mightnot get there there.Yogi Berra
  20. 20. Social Media strategy
  21. 21. Relative page size95% of pages have more than 10 fans65% of pages have more than 100 fans23% of pages have more than 1,000 fans4% of pages have more than 10,000 fans0.76% of pages have more than 100,000 fans0.047% of pages have more than 1 million fans Source: Facebook, global data
  22. 22. Engagement benchmarkEngagement rate benchmarkTop 32 Pages in 10 countries 0.06%By fan baseUp to 10,000 0.96%Up to 20,000 0.29%Up to 50,000 0.21%Up to 100,000 0.19%Up to 200,000 0.16%Up to 500 000 500,000 0.13% 0 13%Up to 1 million 0.11%Over 1 million 0.09%Source: Michael Leander
  23. 23. Calculating engagement rate ((L+C+S)/W)/T T = Total fans on a given day L = Likes on a given day C = Comments on a given day S = Shares on a given day W = Admin Wall Posts on a given day
  24. 24. Earned media on Facebook Buying concentration Buying concentration All buyers Facebook Fan Base Source: Ehrenburg-Bass
  25. 25. DefineStrategySt t
  26. 26. Establish E t bli h your baselineand benchmarks
  27. 27. SetRealisticR li tiObjectives
  28. 28. Measurewhatmatters

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