The ROI of Social Media

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A closer look at the Returns and Investments of Social Media. Facebook, Twitter, Blogs, Slideshare do not automatically equal profit. They do however equate to inputs for investments. In this presentation we look at ROI, Share of Voice (SOV), Customer Satisfaction (CSAT), and Justin Bieber via Case Study.

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  • I fixed the Bieber issue yesterday late...

    The problem with Social Media is that Dollars are not early indicators. Using some of these other segmented matrixes there can be a clean plug in to existing ROI calculations. Search changed the advertising game in direct dollar to dollar correlations. Currently Social is more like other iterations of creative. Most of social results are indirect sales measures.
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  • Nice case study on @JasonBieber (or @JasonBeiber - the slides actually have it both ways!), but IMHO ROI is measured in dollars, nothing else. Love to connect on some of he work we've done!
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The ROI of Social Media

  1. 1. ::Presents::
  2. 2. Social Media ROI A closer look at Returns and Investments
  3. 3. Investments What are the Investments in social media?
  4. 4. Some Expect Social Media To Work Like This
  5. 5. Reality Social media happens over time and the networks only drive profit when other resources are invested first
  6. 6. Problem: Social Networks aren’t investments <ul><li>ROI = Return on Investment </li></ul><ul><li>Investment ≠ Setting up Social Networks </li></ul><ul><li>Investment = Allocating a resource at a cost with the expectation of a return </li></ul><ul><li>Social Media ROI should look more like this… </li></ul>
  7. 7. Sample of Possible Social Media Investments
  8. 8. Hierarchy of Social Media Investments
  9. 9. In Social Cash Is Not King <ul><li>Cash investments help other allocations </li></ul><ul><li>The right people with time freedom can beat dollars </li></ul><ul><li>Time and ability are the key to Social Success </li></ul><ul><li>Dumping money into Facebook with no engagement plan is a waste </li></ul>
  10. 10. The Returns What can come of investments
  11. 11. Primary Returns
  12. 12. Secondary Return example
  13. 13. Returns in Social <ul><li>Social Media covers a wide range of issues </li></ul><ul><li>Solves product development issues </li></ul><ul><li>Increases Customer Retention </li></ul><ul><li>Fosters long term brand relationships </li></ul><ul><li>Provides opportunity for primary research </li></ul><ul><li>*Predictive indicator of sales </li></ul><ul><li>*Several factors effect sales beyond the scope of Social Media </li></ul>
  14. 14. The New Sales Funnel
  15. 15. Macro Measures of Success <ul><li>The old rule stands “Happy Customers are Returning Customers” </li></ul><ul><li>Customer satisfaction (CSAT) increases the volume and frequency of sales </li></ul><ul><li>Customer Awareness of brands increase potential reach </li></ul>
  16. 16. Pulling It Together Measurement
  17. 17. Follower Growth… <ul><li>Growth begets growth </li></ul><ul><li>Different brands Grow at different rates </li></ul><ul><li>General awareness helps organic growth </li></ul><ul><li>Without members in a community there is no return </li></ul><ul><li>Followers are a matrix… and probably not the best matrix </li></ul>
  18. 18. Organic Growth… Followers
  19. 19. Share of Voice… A Better Number <ul><li>Share of Voice (SOV)= Conversations about your brand vs. another (or several others) </li></ul><ul><li>Targets consumer needs </li></ul><ul><li>Requires active community Management </li></ul><ul><li>Places the brand in context </li></ul><ul><li>Should be cross referenced with Market share </li></ul>
  20. 20. Share of Voice (SOV)…
  21. 21. Engagement… How SOV is Won <ul><li>SOV doesn’t just happen </li></ul><ul><li>An engaged user base sparks conversations </li></ul><ul><li>Conversations create more conversations </li></ul><ul><li>SOV will drive followers </li></ul><ul><li>Followers will drive primary and secondary returns which will drive sales… </li></ul>
  22. 22. Stages of Engagement
  23. 23. Engagement: What to Track <ul><li>Comments </li></ul><ul><li>Likes </li></ul><ul><li>Feedback of any kind </li></ul><ul><li>Mentions </li></ul><ul><li>User generated content </li></ul>
  24. 24. Social Media… <ul><li>Takes time </li></ul><ul><li>Is ineffective without community management </li></ul><ul><li>Dies without content </li></ul><ul><li>Is a long term (life of the brand) commitment </li></ul><ul><li>Currently underleveraged </li></ul>
  25. 25. The Bieber A Case Study
  26. 26. The Bieber <ul><li>Posted his 1 st YouTube Video 4 Years Ago </li></ul><ul><li>Amazing content </li></ul><ul><li>Shareable </li></ul><ul><li>1 st Video 70k views in 9 months </li></ul><ul><li>Fans Asked for more content </li></ul><ul><li>More videos were posted </li></ul>
  27. 27. The Bieber <ul><li>Engages with fans 1 to 1 on Twitter </li></ul><ul><li>Sold more records with less promo dollars than any other artist </li></ul><ul><li>Started small… worked big </li></ul><ul><li>Now has a powerful worldwide ‘army’ </li></ul><ul><li>Social Media has an ROI better than any other </li></ul><ul><li>media modality… However it doesn’t happen instantly </li></ul>
  28. 28. Credits: Contributors Community Manager @UserVoice in San Francisco, singer in the band @KickingTuesday. Love food, music, friends, sunlight, beer, bicycles. http://www.evanhamilton.com On Twitter @Evanhamilton digital advertising, enterprise 2.0 solutions, social media and a bona fide sneaker addict http://facebook.com/robert.andrade On Twitter @Cram1975 Social junkie, creative thinker, numbers ninja and coffee addict. Love exploring all things social media and how it moves and shakes marketing. http://www.nathanjokers.com On Twitter @nathanjokers #Cmgr 4 MSW@USC - @2tor. Co-Founder of @CmgrChat, @TheCMgr, @EatYourSerial. Tech, Sports, Cuse, Travel, Korea, Music, & Apple sum me up. http://www.jennpedde.com On Twitter @jpedde Head of Community and Ops for @Livefyre. Happiest on my bike, snowboard, or behind a camera. Event junkie. Continually learning. Outdoors whenever possible. http://jennalanger.com On Twitter @jennalanger
  29. 29. Project Lead and Partners Mike Handy ::Project Lead:: On Twitter @mhandy1 On Tumblr www.mhandy1.tumblr.com I help Community Managers w Strat, Social Media Guy, Data analyst, Generally Awesome A chat for Community Managers Wednesdays at 2pm (EST)… follow hashtag #CMGRCHAT www.thecommunitymanager.com The main source for all community management-related information, including the latest news, case studies and reports.
  30. 30. About us:: The objective of The COLLABs is to create a space for groups of people to discuss and tackle difficult issues around Social Media. The team works in a Google doc with lead in questions All members are encouraged to upload the final product to their own social channels.

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