ROI of Social Media

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ROI of Social Media

  1. 1. MEASURING THEROI OF SOCIAL MEDIA
  2. 2. Agenda•  Why should we care about ROI?•  Social Media ROI today•  Better ways to measure ROI?•  Class Exercise
  3. 3. Why is ROI important? •  If you can’t measure it, you can’t manage it. •  “82% of marketers say their executive management expects every campaign to be measured.” (source: ifbyphone 2011 State of Marketing Measurement Report) •  Marketing budgets are correlated to ROI.
  4. 4. Social Media ROI Today:What’s so hard about it? “ROI intrinsically implies that you want to take out more than you put in. Social Media is about freely sharing with no strings attached. It’s a paradoxical relationship...”! " " " "- Rob Kozinets, Jan 11, 2012! ROI = company gets more than company gives ≠ sharing freely = Social Media
  5. 5. Social Media ROI Today:The Stats•  Measuring ROI was the leading challenge for Social Media Marketers in 2010 & 2011.
  6. 6. Social Media ROI Today:Quotable Notables
  7. 7. Social Media ROI Today:Current Metrics Source: The ROI of Social Media, MDG Advertising
  8. 8. Social Media ROI Today:The big “But” Bu!. . . •  Short term vs. long term •  Quantitative benefits vs. qualitative benefits
  9. 9. Turn your thinking upside down Traditional ROI= (new sales) or (cost savings) ROI= (new fans) x (leap of faith) investment investment Problem: short term & incomplete. Problem: blatant ignoranceFodor, 2010 Hoffman & Company Returns = Customer Investments (behaviors + $) Customer Behaviors  Key Marketing Objectives Key Marketing Objectives  1) Awareness, 2) Engagement, 3) WOM
  10. 10. Determine your Objectives•  Know what you want out of a campaign before you try to measure it.
  11. 11. Key Marketing Objectives
  12. 12. From Fuzzy to Quantifiable Metrics•  Measure early•  Measure often•  Measure everything Source: Hoffman & Fodor, 2010
  13. 13. Measurement Tools Available
  14. 14. Estimating Metric Values•  Primary research (consumer panels, surveys)•  Traditional media benchmarks•  Historical performance
  15. 15. Case: Danone Facebook Campaign•  What was the marketing objective?•  What metrics would you use to measure it?•  How would you try to measure ROI? http://www.youtube.com/watch?v=R7F4zQWWaVs
  16. 16. Appendices
  17. 17. Relevant Metrics – Hoffman & Fodor

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