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WEBINAR: ROI of Social Media: Myths, Truths and How to Measure

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Wondering if your social media initiative is providing value to your organization? Browse through Salesforce Radian6's March 29, 2012 webinar presentation, featuring Dr. Natalie Petouhoff and learn how to take your social media metrics and turn them into valuable information for your business.

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WEBINAR: ROI of Social Media: Myths, Truths and How to Measure

  1. 1. PRESENTS A WEBINAR WITHDr. Natalie PetouhoffUCLA Director and Professor of the Social EnterpriseExecutive Education Courses and A Consultant/Analyst@drnatalie
  2. 2. ARE YOUR SOCIAL MEDIAEFFORTS WORTH THE MONEY?Justifying the business case forlistening & engaging on social mediais a BIG question.And executives want bottom-linebusiness answers.
  3. 3. BUT IS CALCULATING SOCIALMEDIA ROI EVEN POSSIBLE?Skeptics think social media is too “fluffy” toadequately measure return on investment (ROI) Would you calculate the ROI of a phone? Would you calculate the ROI of your mom? Would you calculate ROI of your pants?
  4. 4. Social Media Myth #1 “Social media ROI cannot be calculated because there are too many unknowns…”
  5. 5. TRUTH IS…Social business is still business……and the business of business isincreasing shareholder value.
  6. 6. WHAT IS ROI? A NUMERICALVIEW OF STRATEGYHigh ROI means executive approval foryour initiative.
  7. 7. DOES YOUR STRATEGY INCLUDE BUSINESS FUNDAMENTALSLIKE COST SAVINGS & REVENUE GENERATION… If your strategy includes… Reaching PR Better Enhanced objectives Consumer Brand faster, better, Insights… protection… cheaper… Increased Reduction in call awareness, center costs/ reach, relevance, increase in engagement… customer revenue Faster lead Decrease in generation/ customer churn/ increased lead inc customer lifetime value conversion ratesSocial media ROI predicts if you’ll reach the goal…
  8. 8. Social Media Myth #2 “Would you calculate the ROI of putting phones on every desk in your company? smROI doesn’t have to calculated! ”
  9. 9. HMMM….Except businesses do…Evaluate productivity benefits vs. costs.And also the systems needed to support thebusiness activities.
  10. 10. TRUTH IS…There was a day when…Secretaries answered the phonesand typed EVERYTHING forworkers.Along came phone switches anddesktop computers…Someone did ROI calculations for:Getting a company-wide phoneswitch and phones on every desktop. (Ask Nortel and Avaya…)And a computer on every desk.And apps to get your work done --like email, word processingprograms.
  11. 11. Social Media Myth #3 Metrics = ROI
  12. 12. KNOW WHAT ROI IS AND ISN’TMany people mistake social media data, metrics andKey Performance Indicators (KPIs) for ROIMetrics are used to measure: Reach, Relevance,Shares, Likes, Engagement, PurchasesBut that’s NOT ROI
  13. 13. COLLECT SOCIAL MEDIA DATA,METRICS & KPISWebsite analytics and marketing automation datahelp provide insight into what you’re doing right &how you can improve.
  14. 14. TRUTH IS…Metrics are the like ingredients in a good recipe.They go into the ROI calculation,but they aren’t the finished dish.
  15. 15. ROI VS. METRICSReturn on Investment • Earned Media Value vs. Marketing Spend • Lead Value vs. Marketing Spend • Brand Equity Growth vs. PR Spend • Focus group vs. Social Media Monitoring or CommunityActivity Metrics Reach Metrics Relevance Metrics# of: # of: # of:News Releases Earned Media Placements Key Message PenetrationMedia Interviews Earned Media Impressions Earned Media ShareAnalyst Briefings Paid Media Impressions Share of ConversationBlogger Engagements News Release Downloads Word of Mouth VolumeBlog Posts Analyst Report Mentions Click-Through Volume / RateVideo PostsPodcastsWeb Site Page Edits
  16. 16. ROI IS LIKE LOOKING ATAN ESCHER DRAWINGIt’s a complexity issue• Traditional business goals & metrics• Social media business goals and metrics• How social media affects traditional business
  17. 17. THE STEPS FOR SocialMedia ROI?1. An equation… ROI = Benefit - Costs x 100 Costs2. Calculate Benefit & Costs. They are NOT metrics.
  18. 18. THERE’S AN ROI OF ANYTHING THAT PROVIDES VALUE And there is an ROI of your mom, a phone and wearing pantshttp://www.flowtown.com/blog/what-is-the-roi-of-your-mom
  19. 19. WHERE ARE WE WITH RESPECT TO BEING ABLETO CALCULATE ROI OF SOCIAL MEDIA?Most marketers indicate social media measurement is a high priority & 48% feel pressure to report qualified outcomes of social media.
  20. 20. MARKETERS ARE UNSURE HOW TO CALCULATE SOCIAL MEDIA ROILess than 20% of marketers can calculate the ROI of Social Media
  21. 21. WHAT’S SHIFTING THE NEED FOR SOCIAL MEDIA ROI?Justifying ROI is becoming more important now that we’re in the “third wave” of social media.The first two phases were driven by the Innovators and Early Adopters; they don’t need business cases to adopt something.
  22. 22. SOCIAL IS JUST IN SOME BRANDS’ BLOOD Some brands forge new ground by actively making social media part of their cultural DNA. OTHERS WANT PROOF BEFORE THEY TAKE THE LEAP
  23. 23. SOCIAL MEDIA ADOPTION HAPPENED QUICKLY Companies jumped into social media without extensive ROI calculations There wasn’t any real business analysis. It happened because the boss said so, or because a social media PR disaster could cost much more. Examples:
  24. 24. ISN’T IT INTERESTING THAT A WHOLE INDUSTRY GREW WITHOUTCLEAR BUSINESS CASES FOR SOCIAL MEDIA?
  25. 25. THE EARLY MAJORITY ARE PRAGMATISTS They need assurances. They dislike unpredictability. They are hard to win over.
  26. 26. PRAGMATISTS OFTEN BECOME EVANGELISTSGet the Early Majority to see what the innovators and Early Adopters saw. Loyal once they become “sold” on an idea. They influence others through WOM channels, especially the Late Majority
  27. 27. HOW DO WE GET STARTED DOWN THE ROAD OF SOCIAL MEDIA ROI? ALIGN BUSINESS GOALS WITH SOCIAL MEDIA STRATEGY To be successful in social, you need to determine why you’re doing it and what strategic objectives you’re trying to reach
  28. 28. HOW DO THOSE GOALS COMPARE TO SOCIAL MEDIA GOALS?Apply SMART methodology to all business objectives: Specific Measurable Actionable Realistic Timed
  29. 29. THE SOCIAL MEDIA ROI EQUATION
  30. 30. A SOCIAL ROI EXAMPLESea World San Antonio launched a social media campaign for their new “Journey to Atlantis” ride: • Identified top roller coaster enthusiast bloggers and forum participants • Shared construction videos & photos from start to finish • Treated them like VIPs, inviting the American Coaster Enthusiasts to be the first to ride the new coaster
  31. 31. THE RESULTING ROI?BENEFIT: Using a survey and formula that applies a value to each visitor to the park,Sea World was able to attribute more than $2.6 million in revenue from people whoheard about the ride through the Internet.COST: The total costs for the campaign, for people, process and technology was $44,000. ROI = 2,600,000 – 44,000 x 100 = 5809% ROI 44,000 For each dollar spent, $58.09 of value was added to the bottom line.
  32. 32. CALCULATING SOCIAL MEDIA ROIIS POSSIBLE!There isn’t one answer for how & what tomeasure in social media – the metrics toevaluate your success in social are asunique as your business.Prove social media efforts are providingvalue to your organization by taking theplunge and start crunching yourown numbers today.Go forth & measure!
  33. 33. ADDITIONAL ROI RESOURCES Video: How To Build a Business Case for Social Media http://www.youtube.com/watch?v=_59iJrYanw0&feature=relmfu Video: How To Calculate the ROI of Social Media http://www.youtube.com/watch?v=UhUO30VRN1M&feature=relmfu Video: How Social Media Benefits the Whole Company http://www.youtube.com/watch?v=e1SfQaMSbH0&feature=relmfu Ebook: ROI of Social Media: Myths, Truths & How To Measure http://www.radian6.com/resources/library/roi-of-social-media-myths-truths-and-how-to-measure/ Infographic: ROI: Are Your Social Media Efforts Worth the Money? http://www.radian6.com/resources/library/roi-of-social-media-infographic/ White paper: Calculating the ROI of Social Mediahttp://www.salesforce.com/social-crm/?lbt=/form/pdf/socialcustservice_roi.jsp&d=70130000000G5cI&lbh=600&lbw=510
  34. 34. PRESENTS A WEBINAR WITHDr. Natalie PetouhoffUCLA Director and Professor of the Social EnterpriseExecutive Education Courses and A Consultant/Analyst@drnatalie

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