The ROI of Social Media seems to be something many people want, but few know how to calculate. As a specialty, in this presentation I look at why there hasn't been more focus on this topic and why its time for people to learn how to do this. I distinguish the difference between metrics and ROI. ROI is looking at the actual value of the social media program vs the cost to deliver it. And I address why might happen if we as a industry don't focus on this more!
Pivot Conference: Show Me the Money: ROI of Social Meddia & The Third Phase of Social Media
Transforming Social Media into Enterprise Social Business: <br />Numbers into Business Insights <br />By Dr. Natalie Petouhoff<br />Author of Like My Stuff!<br />Scan this QR Code for this preso + more good stuff!<br />www.drnatalienews.com<br />Learn Share Grow!<br />Slide 1 -<br />@drnatalie #pivotcon<br />
Where are we in social media?<br />*Adopted from: Crossing the Chasm” by Geoffrey A. Moore,<br />Roger’s Diffusion of Innovations 1962 and Gabriel Tarde 1890<br />Social Media Adoption Curve*<br />Phase 1 | Phase 2 | Phase 3| Phase 4 | Phase 5<br />As an industry, we are in Phase 3.<br />www.drnatalienews.com<br />Learn Share Grow!<br />Slide 2 --<br />@drnatalie #pivotcon<br />
What does being in Social Media Phase 3 mean?<br />Social Media Adoption Curve<br />Phase 1| Phase 2 | Phase 3 | Phase 4| Phase 5<br /><ul><li> If you are a vendor, it’s the largest market.
If you are in an org or selling to an brand,</li></ul> you’ll have to convince this large group, the<br />early majority, why they should do social media<br />www.drnatalienews.com<br />Learn Share Grow!<br />Slide 3 --<br />@drnatalie #pivotcon<br />
If social media is an business changing paradigm, as a company you’ll have to get the<br />early majority to buy-in<br />The Social Media Adoption Chasm<br />How can you get the early majority to believe?<br />5<br />
Don’t Fall Into the Chasm<br />Geoffrey Moore on technology adoption:<br /><ul><li>Technologies or products that cannot cross this chasm will die or remain niche.
If successful, a vendor can create a bandwagon effect in which the momentum builds and the product becomes ubiquitous.</li></ul>Learn Share Grow!<br />@drnatalie #pivotcon<br />
The Social Media Chasm Potential<br />Dr Natalie says – about social media adoption:<br /><ul><li>If we cannot help the early majority understand the business value for social media, i.e., cross this chasm, social media initiatives die or remain niche.
We will continue to see interdepartmental fighting to control social media initiatives, which results in fractured brand equity and confused social consumers
Companies who are successful, will create momentum and fuel the fire and social media will becomes ubiquitous
When the majority of the organization is collaboratively engaging in social media, employees and customers win
When employees and customers win, so will the company.</li></ul>www.drnatalienews.com<br />Learn Share Grow!<br />@drnatalie #pivotcon<br />
Innovators and Early Adopters <br />are the people who camp over nite <br />at the Apple store to get the newest tech…<br />5<br />
Pragmatists are SHOW ME THE MONEY people!<br />Early Majority are:<br /><ul><li> Pragmatists
Create and sustain a world-class social enterprise brand…?</li></li></ul><li>Why haven’t we been totally focused on ROI?<br /><ul><li>In the beginning, few asked for it…
Many innovators didn’t ask for budget, they just started doing social media
Early adopters had a gut feel that this would be important…
We’re trying to figure out what this all means…</li></ul>www.drnatalienews.com<br />Learn Share Grow!<br />Learn Share Grow!<br />Slide 11 --<br />@drnatalie #pivotcon<br />
Social Media Industry Phases & ROI<br />Social Media Adoption Curve<br />Phase 1 | Phase 2 | Phase 3 | Phase 4 | Phase 5<br />www.drnatalienews.com<br />Learn Share Grow!<br />Learn Share Grow!<br />Slide 12 --<br />@drnatalie #pivotcon<br />
ROI Myths<br />You can’t calculate social media ROI<br />You can, but it requires learning some new things<br />It requires complexity thinking… that you understand:<br />Traditional metrics and ROI calculations<br />Social media metrics and ROI calculations<br />The affect social media has on business and what increases /decreases<br />It’s hard to attribute what came from social media and what came from traditional venues<br />It requires learning to how to assign attribution <br />Metrics give you ROI<br />You have to take the metrics and use them to calculate business value<br />
Metrics that get you to ROI… but aren’t ROI…<br />Number of… <br />Blog Posts<br />Video Posts<br /> Podcasts<br /> News Releases<br />Media Interviews<br />Analyst Interactions<br />Briefings / Inquiries / Consults<br />Events Managed<br />Direct Mail Campaigns<br />Web Site Pages/Edits<br />Web Site Pages/Edits<br />What are you doing? <br />
Metrics that get you to ROI… but aren’t ROI…<br />Number of… <br />Earned Media Placements<br />Print / Online / Broadcast<br />Business / Consumer / Trade<br />Earned Media Impressions<br />Print / Online / Broadcast<br />Business / Consumer / Trade<br />Earned Media Prominence<br />Headline Citations<br />Lead Paragraph Citations<br />Cover/Feature Stories<br />Photo/Graphic Placement<br />Paid Media Impressions<br /># of Event Attendees<br /># of Collateral Downloaded…<br />Who are you <br />taking to?<br />
Metrics that get you to ROI… but aren’t ROI…<br />Number of… <br />Key Message Penetration<br />Earned Media Share<br />Share of Voice compared to competitors<br />Word of Mouth Volume<br />Online Search Rank / Share<br />Click-Through Volume / Rate<br />Qualified Leads<br />Who cares <br />about what you are saying?<br />
Metrics that get you to ROI… but aren’t ROI…<br />Value of… <br /><ul><li>Brand strength
e.g., Fortune Most Admired, Best Place to Work…</li></ul>What value are your bringing?<br />
ROI is… Learning what you got from your investment<br />ROI = Benefit – Investment x 100<br /> Investment<br />ROI = $10,000 – $5,000 x 100<br /> $5,000<br />ROI = $5,000 x 100 = 100%<br /> $5,000<br />
Don’t let how you approach social business stop the progress of your company<br />The chasm is a drastic lull in that occurs after the visionaries and innovators have done as much as they can <br />And the pragmatists will not buy into this new paradigm unless they can reference other pragmatists<br />Which is a catch 22 – because the pragmatists don’t care yet.<br />Pragmatists dependent exclusively on references from others in their own industry and are highly support oriented<br />
5 Steps to Take…<br />Assess your needs<br /><ul><li>As Is, Could Be and Gap</li></ul> <br />2. Create short & long term plan<br /><ul><li> Start by listening
Unify traditional and social</li></ul>3. Create a business case <br />4. Deploy and assess<br />5. Review lessons learned and repeat.<br /> <br /> <br /> <br />
Don’t do the ostrich…<br />Imagine how silly <br />you might look…<br />
… take your <br />head out of the sand… and cross the chasm… learn how to calculate ROI!!!<br />
@drnatalie<br />www.drnatalienews.com<br />310-910-1542<br />Link to the Social Media ROI videos:<br />http://www.drnatalienews.com/blog/did-u-see-the-videos-on-the-roi-of-social-media<br />Thank you!<br />Curious about <br />The ROI of <br />Social Media? <br />Link to white papers on the ROI of Social Media:<br />http://www.drnatalienews.com/blog/roi-of-social-media-white-papers-by-dr-natalie-petouhoff<br />Get the book::<br />
Appendix… <br />Getting Started on Social Media ROI<br />What is Social Media Monitoring?<br />Social media monitoring is a process by which you monitoring the conversations that your stakeholder groups are having. Stakeholder groups can be groups of customers, influencers, brand ambassadors, press, etc… These conversations occur between you and them and the stakeholder groups also talk amongst themselves on social channels. Some of the paid social media monitoring services also include print, radio and TV monitoring and conversations in those mediums.<br />
Appendix… <br />You’ll want to look at how your company or department is collecting real-time feedback on the quantity, quality, tone of the ongoing social interactions. With this information you can several things.<br />One is to avoid risk. There are many cases of social media brand damage- consider Dominos, Nestle, Gap, Motrin, United Breaks Guitars, Southwest Airlines, BP and now Netflix.<br /> If a brand is monitoring for what is being said –to and about your brand or company, you can detect a disaster and take it off line and resolve it before it blows up.<br />
Appendix… <br />You can also use social media monitoring to be proactive in your outreach to various stakeholder groups. <br />You can use monitoring to learn who your superusers are, i.e., the 1% out of your 1-9-90 principle in social media. The 1-9-90 principle is the ratio of people who post about your brand = 1%, the people who respond to those 1% are called the responders and they respond to what the 1% posts. <br />The rest of your stakeholders are in the 90%. This 90% are called lurkers because they mostly read content. They don’t very often post or respond. But they are still important. <br />(The ratio 1-9-90 may very depending on the vertical industry you are in, but it is a good baseline to understand that most of your stakeholder generate and spread and the rest just read it.)<br />
Appendix… <br />Part of social media monitoring is to determine the value of social interactions to the brand and the business. It will be difficult for a company to get a larger share of the total communications expenditure without quantitative means that go well beyond measurement of media outputs. <br />Things that you want to measure are:<br /><ul><li>Sentiment towards your brand
Share of voice of your brand compared to your competitor
What are the top conversations and buzz around your company
Are you interacting with the most important people- the 1 and 9%
Is the content you are creating the type of content your stakeholders are interested in and have you make it social media oriented, meaning is it something they want to share with others?
What channels are you syndicating the content on?
How is the content driving your prospects through your marketing funnel?</li></li></ul><li>Appendix… <br />And you want to monitor and analyze these types of things over a long period of time. <br />This will help you to see if your key marketing messages are getting picked up, if there are issues with your products and services, and can even give you ideas for your product development and roadmap. In the following table are some free tools. <br />There are also paid for services like Radian6 and Sysomos. If you don’t have budget for social media, you might start by using some of the free tools. <br />And once you start to show business value, you can decide if you want to make a proposal for a more advanced tool.<br />
Appendix… <br />Here’s a blog post I did about social media monitoring and the affect it might have had on Netflix and Blockbuster if they had not only been monitoring but also taken the information about their company and integrated it back into the company. <br />That doesn’t happen all that often. It’s a organizational change management issue and something that very skilled leaders are learning how to facilitate. Even in the best of situations, in the current environment, interdepartmental collaboration may be lacking. <br />One of the best techniques to move things forward is to show a pocket of success. You might also take meetings with other like-minded individuals in other departments so that you can hear their point of view and discuss what their views and yours are in the arena of social media and social media monitoring tools.<br /> <br /> <br />Here’s the blog post that might give you some insight into the power of social media monitoring:<br />Could Social Media Monitoring Have Saved Netflix & Blockbuster from Themselves?<br /> <br /> <br />