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Six Social Media ROI Models

Marketers should approach social media marketing the same way they approach other channels - expect an ROI and make investments to measure it.

This presentation explores six social media ROI models. Learn new methods to measure social ROI and tactics for mapping your social campaigns to core business metrics.

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Six Social Media ROI Models

  1. 1. Six Social Media ROI Models We’ll begin show shortly…
  2. 2. Who’s presenting? Tom Webster Jim Tobin VP, Marketing Edison Research @webby2001 Founder, President Ignite Social Media @jtobin #igniteroi
  3. 3. Details • • • • Jim & Tom will lead Q&A at the end of the call. Tag your tweets with #igniteroi We’re recording the show. We’ll send an email follow up to everyone. #igniteroi
  4. 4. Download the White Paper http://bit.ly/ignite-roi
  5. 5. We’ve come a long way.
  6. 6. The Models 1. 2. 3. 4. 5. 6. Amplification Value of Social Traffic vs Display Quality of Visitors From Social Revenue From Facebook Fans Revenue From Social Media Marketing Social Promotions Sales ROI #igniteroi
  7. 7. None of the models are perfect.
  8. 8. All of the models are better than nothing.
  9. 9. Model 1: Amplification
  10. 10. Amplification Step By Step Calculate social impressions, actions Facebook impressions and clicks, Twitter impressions and clicks, YouTube views, Online mentions, etc. Sum value of impressions, actions Assign value to impressions and actions, weighting actions more heavily that impressions. Compare to total social media spend Map social impressions and actions to paid marketing value equivalency. #igniteroi
  11. 11. Amplification Model Example Social Impressions, Actions Paid Advertising Equivalent Value 2,000 Facebook impressions $10 CPM $20 100 Facebook clicks $0.50 per click $50 100 YouTube Views $0.20 per view $20 Total Value: $90 Social Budget: $30 Social ROI: 300% #igniteroi
  12. 12. Likely Questions & Considerations • Most of the social data inputs are available for free. • The model is complex. It requires proxy values for social actions based on non-social comps. • The model aggregates cross-channel social data and maps it to familiar marketing metrics. • The output is a relative comparison, not an actual sales return on investment. #igniteroi
  13. 13. Model 2: Value of Social Traffic versus Display
  14. 14. Example Traffic Comparison Description Display Social Delta Net New Visitors 30,000 170,000 Social drove 5.67X more visitors Cost $150,000 $130,000 Social cost only 86.7% of display Cost per visitor $5.00 $0.76 Social generated a 6.5X better return Above baseline This data reflects actual performance from an Ignite Social Media client. #igniteroi
  15. 15. Likely Questions & Considerations • This approach is less complicated than others, it requires fairly simple inputs. • The model works well if you have an active display advertising campaign as a basis for comparison. • The model doesn’t incorporate impression value, only traffic value. • The channels are the variable, so try to keep other variables constant. #igniteroi
  16. 16. Model 3: Quality of Visitors From Social Media
  17. 17. Example Traffic Quality Comparison Description Display Social Delta Pages per Visit 1.57 2.84 Social drove 1.8X more pages per visit. Time on Site 0:40 2:18 Social visitors spend 3.45X time on site. Bounce Rate 81.40% 45.46% Social visitors had a 44% lower bounce rate. Social drove 4X conversions. This data reflects actual performance from an Ignite Social Media client. Goal Conversions 3,098 12,603 #igniteroi
  18. 18. Likely Questions & Considerations • You can compare social traffic against other channels or “average” site traffic. • Choose the most meaningful metrics, don’t worry about comparing all of them. • Factor in all costs related to social and other channels for a final calcuation. #igniteroi
  19. 19. Model 4: Revenue From Facebook Fans
  20. 20. The Facebook Factor Brand Purchase in Last 12 Months Likely Consider Likely Recommend Fan Non-Fan Fan Non-Fan Fan Non-Fan Bust Buy 79% 41% 78% 47% 74% 38% Coca-Cola 95% 71% 85% 58% 83% 47% Blackberry 55% 10% 69% 17% 62% 16% Walmart 94% 74% 85% 56% 77% 39% Source: Forrester Research, The Facebook Factor, April 2012 #igniteroi
  21. 21. Example Calculation 283,786 For a year. % Likely to Consider, Fan 69% Blackberry is closest comp brand in this example case. % More Likely to Purchase Since Becoming a Fan 16% Conservative estimate from 2011 Chadwick Martin Bailey data. Price of Product $250 Fictitious. Purchases per Year 0.33 Fictitious. 31,330 New Fans X % Likely to Purchase X % More Likely Since Becoming Fan $2,584,723 New Fans Who Are New Customers X Product Price X Yearly Purchases Net New Facebook Fans # of New Fans Who Are New Customers Total Estimated Revenue #igniteroi
  22. 22. Likely Questions & Considerations • This is an admittedly rough estimate. • Additional data from comScore further indicates that Facebook influences purchase behavior. #igniteroi
  23. 23. Model 5: Revenue From Social Media Marketing
  24. 24. Example Calculation 4,830,827 For a given time period 345,324 For the same time period Goal Pages per Sale 13.989 For the same time period Social Traffic to Goal Pages 27,716 Visitors from social who landed on a goal page during time period Social “Sales” 1,981 Social traffic to goal pages / (goal pages / sale) Avg Transaction Value $135 Revenue from period / transactions during period $267,435 Social transactions X Avg transaction value Visitors to Goal Pages Products Sold Social Revenue #igniteroi
  25. 25. Calculation Continued Social Revenue Social Marketing Cost ROI $267,435 From previous slide $97,500 For the same time period $1.74 (Revenue – Cost) / (Cost) #igniteroi
  26. 26. Likely Questions & Considerations • This is (also) an admittedly rough estimate. • For considered, offline purchases, digital marketers have limited visibility to impact. • This model becomes more valuable the more you know about your buyers’ aggregate web behavior. #igniteroi
  27. 27. Model 6: Social Promotions Sales ROI
  28. 28. Example Calculation $195,404 Including ads # Goal Page Completions 34,812 Use actual if possible Goal Pages per Sale 13.989 From model 2,489 Goal page completions / goal pages per sale $336,015 Social sales X average transaction value $0.72 (Revenue – Cost) / (Cost) Total Cost of Promotion Social “Sales” Social “Sales” Revenue ROI #igniteroi
  29. 29. Likely Questions & Considerations • This model works well when you want to map a specific promotion to purchase intent. • Remember that you’re comparing the effectiveness of marginal marketing spend – a “low” ROI might not be a bad thing. #igniteroi
  30. 30. BONUS MODEL 7: Show Me Yours
  31. 31. Thanks for attending! Tweet your questions @ignitesocialmedia. We’ll email you the slides, the whitepaper, and the presentation recording.

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  • jomingo

    Nov. 21, 2013
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    Aug. 29, 2014
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    Sep. 28, 2014

Marketers should approach social media marketing the same way they approach other channels - expect an ROI and make investments to measure it. This presentation explores six social media ROI models. Learn new methods to measure social ROI and tactics for mapping your social campaigns to core business metrics.

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