The value of organic social media marketing discusses how marketers can find the right balance between paid, owned, and earned on social. Includes information about the six measurement models of social media ROI.
4. Six models of social media marketing ROI
• The Amplification Model:
– how much would it cost to buy these impressions/social actions through paid media?
• Value of Social Traffic versus Display:
– how much does it cost to get a visitor to your site via social promotions versus display
advertising?
• Quality of Visitors from Social Media:
– how well do the visitors being driven to a site via social media perform?
• Revenue from Facebook Fans Model:
– how much incremental revenue do Facebook fans generate?
• Revenue from Social Media Marketing:
– how many sales can be attributed to your social media marketing programs?
• Social Promotions Sales ROI:
– how many sales can be attributed to a special social media marketing promotion?
5. The Amplification Model
Calculates the value of the following:
In a given time period, we generated:
1)
2)
3)
4)
5)
6)
7)
Facebook Organic Impressions
Clicks on Facebook Links
Twitter Impressions
Clicks on Twitter Links
Organic YouTube Views
Blog Page Views
Online Brand Impressions
1) 75,442,874 Organic Impressions
Using Data from:
On a spend of:
• $1,660,000 (Agency fees and all expenses)
A)
B)
C)
D)
Industry data on CPM for targeted online buys ($8
CPM)
Industry average for cost-per-click advertising
($0.58 per click)
Average cost per view for promoted YouTube videos
($0.20 per view)
Parts of “Social Equivalent Ad Value Model” created
by Tourism Ireland (http://scr.bi/KjPwEd)
(Facebook and Twitter only)
2) 4,849,246 Social Actions (Links clicked, brand
mentions, organic YouTube views, blog page views)
With a value of:
• $2,021,627.27
For a Purchase Equivalency of:
• $1.21 for every $1 spent
6. Value of Social Traffic versus Display
http://www.ignitesocialmedia.com/social-media-stats/social-media-campaigns-vs-banner-ads/
7. Quality of Visitors from Social Media
Description
Pages per Visit
1.57
2.84
Delta
Social = 1.8x more visitors
Time on Site
0:40
2:18
Social = 3.45x more time on site
Bounce Rate
81.40%
45.46%
Social = 44% lower bounce rate
3,098
12,603
Social = 4x more goal conversions
Goal Conversions
Display
Social
8. Revenue from Facebook Fans Model
•
•
Social media is great at driving vast amounts of conversation. Conversation that gets seen.
Facebook fans are better advocates, and better customers, than non-fans.
Description
Net New Facebook Fans
% Likely to Consider, Fan
% More Likely to Purchase
Since Becoming a Fan
Price of Product
Purchases per Year
# of New Facebook Fans Who
Are New Customers
Total Estimated Revenue
(Year)
Number
Notes
283,786 For a year
69% Blackberry is closest analogous brand in
16%
this case
Conservative estimate from the 2011
Chadwick Martin Bailey Consumer Pulse
$250 Fictitious, changed from actual client
0.33
31,330
$2,584,722.89
example
Fictitious, changed from actual client
example
New Fans * % Likely to Purchase * %
More Likely to Purchase Since Becoming
a Fan
New Fans Who Are New Customers *
Price of Product * Purchases per Year
Likely to Buy Same Brand Again
Source: Facebook
60%
50%
40%
55%
53%
36%
37%
30%
Owner + Fan
20%
Owner, Not Fan
10%
0%
Brand A
Brand B
9. Revenue from Social Media Marketing
Visitors to Goal Pages
Products Sold
Number
4,830,827 In a given time period
Notes
345,324 For the same time period
Goal Pages/Sale:
13.989
Social Media Traffic to Goal Pages
27,716 Visitors from social networks, blogs, etc. who landed on one of
the goal pages in the time period
1,981 Social media traffic to goal pages / (goal pages/sale)
Products “Sold” Through Social
Average Sales Price per Product
Revenue from Social “Sales”
Cost of Social Media Marketing
ROI
$135 Revenue during the period / unit sales during the period
$267,435 Products “Sold” x Average Sales Price
$97,500 For the same time period
$1.74 (Revenue – Cost) / Cost
10. Social Promotions Sales ROI
Total Cost of Promotion
# of Goal Page Completions
Goal Pages per Sale
Products “Sold” Through Social
Revenue from Social “Sales”
ROI
Number
$195,404 Including ads
Notes
34,812 Use actual if it can be tracked with tracking links. If not, measure
“above baseline” during tracking period. Counting unique visitors
would be best.
13.989 From model above
2,489 Goal page completions / goal pages per sale
$336,015 Products “Sold” x Average Sales Price of $135
$0.72 (Revenue – Cost) / Cost
12. Balanced Approach
Earned
The social current
that carries the
message
Ignite takes over
Paid
Paid
A driver and
amplifier of growth
and reach
Owned
Amplified
Success
Both a driver and
benefiter of social
efforts
93:1 ROI
There’s a lot of logo’s on this slide, many of whom I’m sure you recognize. But the point is, We work primarily with large, highly visible brands: Companies with significant regional, national and international reach, such as P&G, have needs, concerns, and challenges that differ significantly from small shops and startups. Your actions in social media are under a different magnitude of microscope, and your projects and campaigns are subject to much more extensive internal approval processes and external scrutiny. We understand that, and live it with clients just like you daily.