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Measuring Value from Social Media

          Steve Latham
           Spur Digital
           January 2008
Outline
 Industry Trends
 Digital media landscape
 Why Social Media
 Barriers to Online Investment
 Metrics
 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
        Opinion...
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
         Impressio...
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
 case
   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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ROI Analysis
Value Impact of Existing Customers
Est. Conv PV per
Existing Customers Total % of Total % Customers customer NPV
Visits 50,000 100% 2.5% 1,250 $ 100 $ 125,000
Registrants 20,000 40% 25.0% 5,000 $ 100 $ 500,000
Tell A Friend Actions 2,500 10% 60.0% 1,500 $ 100 $ 150,000
Coupon downloads 7,500 15% 35.0% 2,625 $ 100 $ 262,500
Store locator clicks 2,500 5% 40.0% 1,000 $ 100 $ 100,000
Average $ 227,500


Value Impact of New Customers
PV per
New Customers Total % of Total Conv % Customers customer PV
Visits 25,000 100% 2.5% 625 $ 500 $ 312,500
Registrants 5,000 20% 20.0% 1,000 $ 500 $ 500,000
Tell A Friend Actions 2,500 10% 30.0% 750 $ 500 $ 375,000
Coupon downloads 2,500 10% 28.0% 700 $ 500 $ 350,000
Store locator clicks 2,500 10% 32.0% 800 $ 500 $ 400,000
Average $ 387,500




17 © 2007 Spur Digital LP. All rights reserved.

Published in: Business, News & Politics
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