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Measuring Value from Social Media

          Steve Latham
           Spur Digital
           January 2008
 Industry Trends
 Digital media landscape
 Why Social Media
 Barriers to Online Investment
 ROI analysis
Industry Trends
  Global online ad spend > $80 billion by 2011(1)
      $42 billion to be spent in U.S.
      Online = 11....
Media Consumption is Changing
  Interactive now accounts for >30% of media time (1)
      TV = 35%, Radio = 12%, Print = 9...
Today’s Media Landscape

   TV   Direct Mail        Radio                         Print       Mobile   Digital

Digital Media Landscape
                        Video                     E-Mail
Social Media Has Gone Mainstream
                 Internet Usage Increasingly Favors Social Media
   Watch Internet (strea...
Trust in Peers Trumps All Other Sources
 Online Consumers Turn to Friends or Acquaintances for Information
User Generated Video is Exploding

  User Generated Video
  • User-Generated Video made up
    47% of the total online vid...
So What’s the Problem???
 If Social Media is so great, why aren’t more brands
 and agencies using it?

         (beyond t...
Barriers to Online Investment
 2007 McKinsey study of 410 marketing execs found
 the primary barriers to online investment...
Web 1.0 Metrics (sample dashboard)
What Should We Measure for Web 2.0?
 What are the “right” metrics?
   Exposure to media and/or web site
How Do We Value Engagement?
 Determine how ACTIONS                                INTENT
  Action                  Value
ROI Case Study
 Client: consumer retailer seeking to drive in-
 store purchases

 Insight: target audiences are heavy inte...
ROI Methodology
 Define the metrics that indicate intent

 Project conversion rates and expected value for
 each audience ...
ROI Analysis
Value Impact of Existing Customers
                                                         Est. Conv        ...
Sample ROI Analysis (continued)

Impact of New + Existing Customers
Now What?
 Once you have a ROI model, build the business
   Document the assumptions
   Show the expected economic i...
In Closing…
 We all know the value is there…
 …We just need to be able to show it

 There is no silver bullet to building ...
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How Do We Value Engagement?
Determine how ACTIONS INTENT
Action Value
Visits Shows brand engagment; can adjust based on PVs or Time on Site
Registrants People who join email list. Able to reach in future.
Tell A Friend Actions Recommendations are strongest indication of intent
Coupon downloads Shows interest in a specific offer
Store locator clicks Shows interest in finding a store

Determine how INTENT REVENUE (or value)
Will vary based on the action

Apply formula across each set of actions

Use common sense to normalize results

14 © 2007 Spur Digital LP. All rights reserved.

Published in: Business, News & Politics