Six Social Media ROI Models     We’ll begin show shortly…
Who’s presenting?Jim Tobin                          Tom WebsterFounder, President                   VP, MarketingIgnite So...
Details•   Jim & Tom will lead Q&A at the end of the call.•   Tag your tweets with #igniteroi•   We’re recording the show....
Download the White Paperhttp://bit.ly/ignite-roi
We’ve come a long way.
The Models1.   Amplification2.   Value of Social Traffic vs Display3.   Quality of Visitors From Social4.   Revenue From F...
None of themodels are perfect.
All of the models are better than     nothing.
Model 1: Amplification
Amplification Step By Step                       Facebook impressions and clicks, Twitter  Calculate social               ...
Amplification Model ExampleSocial Impressions, Actions   Paid Advertising Equivalent   Value2,000 Facebook impressions    ...
Likely Questions & Considerations• Most of the social data inputs are available for free.• The model is complex. It requir...
Model 2: Value ofSocial Traffic versus      Display
Example Traffic ComparisonDescription               Display             Social             DeltaNet New Visitors          ...
Likely Questions & Considerations• This approach is less complicated than others, it  requires fairly simple inputs.• The ...
Model 3: Quality ofVisitors From Social        Media
Example Traffic Quality               ComparisonDescription             Display             Social             DeltaPages ...
Likely Questions & Considerations• You can compare social traffic against other  channels or “average” site traffic.• Choo...
Model 4: RevenueFrom Facebook Fans
The Facebook Factor  Brand      Purchase in Last      Likely Consider      Likely Recommend                12 Months      ...
Example CalculationNet New Facebook Fans         283,786                                 For a year.% Likely to Consider, ...
Likely Questions & Considerations• This is an admittedly rough estimate.• Additional data from comScore further  indicates...
Model 5: RevenueFrom Social Media    Marketing
Example CalculationVisitors to Goal Pages         4,830,827                    For a given time periodProducts Sold       ...
Calculation ContinuedSocial Revenue          $267,435            From previous slideSocial Marketing Cost    $97,500      ...
Likely Questions & Considerations• This is (also) an admittedly rough estimate.• For considered, offline purchases, digita...
Model 6: SocialPromotions Sales ROI
Example CalculationTotal Cost of Promotion   $195,404                             Including ads# Goal Page Completions    ...
Likely Questions & Considerations• This model works well when you want to map  a specific promotion to purchase intent.• R...
BONUS MODEL 7: Show Me Yours
Thanks for attending!          Tweet your questions           @ignitesocialmedia.We’ll email you the slides, the whitepape...
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6 Models for Measuring Social Media ROI - Ignite Social Media

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http://www.ignitesocialmedia.com/resources/whitepaper-measuring-roi/ Slides from a webinar with Tom Webster (http://www.twitter.com/webby2001) and Jim Tobin (http://www.twitter.com/jtobin) discussing 6 models anyone can use to measure the return on investment from social media marketing.

They include:
1) The Amplification Model;
2) Value of Social Media Traffic vs. Display Advertising Traffic
3) Quality of Visitors from Social Media Traffic vs. Display Advertising
4) Calculating Revenue from Facebook Fans
5) Calculating Revenue from Social Media Marketing
6) Social Media Promotions Sales ROI

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  • Models are much more sophisticated that previous methods…but still not perfect.We would encourage you to do two things: 1)  Analyze your own business performance in new ways to plug in as many metrics as you can that are specific to your brand(s); and 2)  Question these models. Ask the tough questions. Let us know what you learn as you apply them. We consider these very much a work in progress, and your comments on our blog will help us immensely as we work toward version 2.0 and beyond.
  • Social media marketing, however, is the application of a complicated mix of tactics, including content marketing, influencer outreach, owned channel management and much more. And these tactics are then applied to solve a wide array of marketing issues, from brand awareness to improved SEO to brand loyalty to ecommerce traffic. Models continue to evolve…Models are not plug and play…
  • Social media marketing, however, is the application of a complicated mix of tactics, including content marketing, influencer outreach, owned channel management and much more. And these tactics are then applied to solve a wide array of marketing issues, from brand awareness to improved SEO to brand loyalty to ecommerce traffic. Models continue to evolve…Models are not plug and play…
  • Our Amplification Model can also be called a Purchase Equivalency Calculator in that it measures and quantifies the value of social impressions and social actions and compares them to the cost of buying that same level of activity through traditional advertising means. With social media, we have channels that are largely opt- in (like Facebook and Twitter), and we can often use those to reach friends of fans. We know from lots of research that fans and friends of fans are more likely to buy, so reaching these folks is every bit as valuable as advertising. If anything, it’s even more targeted.
  • Calculating:Impression data is available in social platform analytics.Valuing:Impressions:For a highly targeted online media buy, you could easily spend $10 CPM, so for Facebook and Twitter impressions (highly, highly targeted) we use a $10 CPM. Other brands might use different numbers, such as $8 or $12 for a highly targeted buy.Clicks:We can already measure the value of a click, since many of us spend thousands of dollars on Google pay-per-click advertising, trying to get our prospects to click over to our site. Of course, keywords vary dramatically in price, so use a simple average by taking the total you spend in a period on all keywords and dividing by the number of clicks. YouTube views: YouTube. You can use what you pay for Promoted Videos, or use our average estimate of $0.20 per view. Blog views and mentions: We built on the work done by Tourism Ireland in its Social Equivalent Ad Model paper. In that, Henry and Harte argue that these activities are deeper interactions than page views. While they can’t be directly quantified, Henry and Harte argue that they are at least as valuable as a click on a Google CPC ad in terms of involvement with a brand. Comparing:By aggregating impressions and actions and then assigning a value and then summing – you’ve calculated a paid marketing value equivalency.Compare this paid marketing equivalency to your social budget to back into an ROI.
  • 6 Models for Measuring Social Media ROI - Ignite Social Media

    1. 1. Six Social Media ROI Models We’ll begin show shortly…
    2. 2. Who’s presenting?Jim Tobin Tom WebsterFounder, President VP, MarketingIgnite Social Media Edison Research@jtobin @webby2001 #igniteroi
    3. 3. Details• Jim & Tom will lead Q&A at the end of the call.• Tag your tweets with #igniteroi• We’re recording the show.• We’ll send an email follow up to everyone. #igniteroi
    4. 4. Download the White Paperhttp://bit.ly/ignite-roi
    5. 5. We’ve come a long way.
    6. 6. The Models1. Amplification2. Value of Social Traffic vs Display3. Quality of Visitors From Social4. Revenue From Facebook Fans5. Revenue From Social Media Marketing6. Social Promotions Sales ROI #igniteroi
    7. 7. None of themodels are perfect.
    8. 8. All of the models are better than nothing.
    9. 9. Model 1: Amplification
    10. 10. Amplification Step By Step Facebook impressions and clicks, Twitter Calculate social impressions and clicks, YouTubeimpressions, actions views, Online mentions, etc. Assign value to impressions and actions, Sum value of weighting actions more heavily thatimpressions, actions impressions. Compare to total Map social impressions and actions tosocial media spend paid marketing value equivalency. #igniteroi
    11. 11. Amplification Model ExampleSocial Impressions, Actions Paid Advertising Equivalent Value2,000 Facebook impressions $10 CPM $20100 Facebook clicks $0.50 per click $50100 YouTube Views $0.20 per view $20 Total Value: $90 Social Budget: $30 Social ROI: 300% #igniteroi
    12. 12. Likely Questions & Considerations• Most of the social data inputs are available for free.• The model is complex. It requires proxy values for social actions based on non-social comps.• The model aggregates cross-channel social data and maps it to familiar marketing metrics.• The output is a relative comparison, not an actual sales return on investment. #igniteroi
    13. 13. Model 2: Value ofSocial Traffic versus Display
    14. 14. Example Traffic ComparisonDescription Display Social DeltaNet New Visitors 30,000 170,000 Social drove 5.67XAbove baseline more visitorsCost $150,000 $130,000 Social cost only 86.7% of displayCost per visitor $5.00 $0.76 Social generated a 6.5X better return This data reflects actual performance from an Ignite Social Media client. #igniteroi
    15. 15. Likely Questions & Considerations• This approach is less complicated than others, it requires fairly simple inputs.• The model works well if you have an active display advertising campaign as a basis for comparison.• The model doesn’t incorporate impression value, only traffic value.• The channels are the variable, so try to keep other variables constant. #igniteroi
    16. 16. Model 3: Quality ofVisitors From Social Media
    17. 17. Example Traffic Quality ComparisonDescription Display Social DeltaPages per Visit 1.57 2.84 Social drove 1.8X more pages per visit.Time on Site 0:40 2:18 Social visitors spend 3.45X time on site.Bounce Rate 81.40% 45.46% Social visitors had a 44% lower bounce rate.Goal Conversions 3,098 12,603 Social drove 4X conversions. This data reflects actual performance from an Ignite Social Media client. #igniteroi
    18. 18. Likely Questions & Considerations• You can compare social traffic against other channels or “average” site traffic.• Choose the most meaningful metrics, don’t worry about comparing all of them.• Factor in all costs related to social and other channels for a final calcuation. #igniteroi
    19. 19. Model 4: RevenueFrom Facebook Fans
    20. 20. The Facebook Factor Brand Purchase in Last Likely Consider Likely Recommend 12 Months Fan Non-Fan Fan Non-Fan Fan Non-FanBust Buy 79% 41% 78% 47% 74% 38%Coca-Cola 95% 71% 85% 58% 83% 47%Blackberry 55% 10% 69% 17% 62% 16%Walmart 94% 74% 85% 56% 77% 39% Source: Forrester Research, The Facebook Factor, April 2012 #igniteroi
    21. 21. Example CalculationNet New Facebook Fans 283,786 For a year.% Likely to Consider, Fan 69% Blackberry is closest comp brand in this example case.% More Likely to Purchase 16% Conservative estimate from 2011Since Becoming a Fan Chadwick Martin Bailey data.Price of Product $250 Fictitious.Purchases per Year 0.33 Fictitious.# of New Fans Who Are 31,330 New Fans X % Likely to Purchase X %New Customers More Likely Since Becoming FanTotal Estimated Revenue $2,584,723 New Fans Who Are New Customers X Product Price X Yearly Purchases #igniteroi
    22. 22. Likely Questions & Considerations• This is an admittedly rough estimate.• Additional data from comScore further indicates that Facebook influences purchase behavior. #igniteroi
    23. 23. Model 5: RevenueFrom Social Media Marketing
    24. 24. Example CalculationVisitors to Goal Pages 4,830,827 For a given time periodProducts Sold 345,324 For the same time periodGoal Pages per Sale 13.989 For the same time periodSocial Traffic to Goal Pages 27,716 Visitors from social who landed on a goal page during time periodSocial “Sales” 1,981 Social traffic to goal pages / (goal pages / sale)Avg Transaction Value $135 Revenue from period / transactions during periodSocial Revenue $267,435 Social transactions X Avg transaction value #igniteroi
    25. 25. Calculation ContinuedSocial Revenue $267,435 From previous slideSocial Marketing Cost $97,500 For the same time periodROI $1.74 (Revenue – Cost) / (Cost) #igniteroi
    26. 26. Likely Questions & Considerations• This is (also) an admittedly rough estimate.• For considered, offline purchases, digital marketers have limited visibility to impact.• This model becomes more valuable the more you know about your buyers’ aggregate web behavior. #igniteroi
    27. 27. Model 6: SocialPromotions Sales ROI
    28. 28. Example CalculationTotal Cost of Promotion $195,404 Including ads# Goal Page Completions 34,812 Use actual if possibleGoal Pages per Sale 13.989 From modelSocial “Sales” 2,489 Goal page completions / goal pages per saleSocial “Sales” Revenue $336,015 Social sales X average transaction valueROI $0.72 (Revenue – Cost) / (Cost) #igniteroi
    29. 29. Likely Questions & Considerations• This model works well when you want to map a specific promotion to purchase intent.• Remember that you’re comparing the effectiveness of marginal marketing spend – a “low” ROI might not be a bad thing. #igniteroi
    30. 30. BONUS MODEL 7: Show Me Yours
    31. 31. Thanks for attending! Tweet your questions @ignitesocialmedia.We’ll email you the slides, the whitepaper, and the presentation recording.

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