Social Media ROI... does it Exist?


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In the ever growing world of Social Media business is often scared to dabble in the industry. I ask the question about whether or not Social Media can deliver a ROI...

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Social Media ROI... does it Exist?

  1. 1. Social Media ROI... Presentation by Justin Hartman CEO - Afrigator & Social Code ...does it exist?
  2. 2. Who thinks Social Media ROI is about............... Sales
  3. 3. What about............... Leads Sales Measurability Brand Equity Support Communication Cost Savings New Customers One on One conversation Engagement
  4. 4. Profit = R1,000,000 Cost = R200,000 ROI = 400%
  5. 5. "ROI of Social Media is that your business will still exist in 5 years time...." -- by, Very Smart Person
  6. 6. Media Types and their measurability Media Type Measurement Track ROI? Mobile text ads CTR Yes Banner ads CTR Yes Search ads CTR Yes Opt-in email Reads / Opens Yes TV ads Viewership No Radio ads Listenership No Magazine ads Readership No Newspaper ads Readership No Social Media ??? ???
  7. 7. Consumer Trust Levels by Media Type Mobile text ads 18% Banner ads 24% Search ads 37% Ads before movies 53% Opt-in email 55% TV & Radio ads 61% Magazine ads 62% Newspaper ads 66% Brand sites 69% Editorial Content 70% Recommendations from people I know 92% Nielsen Online global survey, April 2009
  8. 8. Consumers consider word-of-mouth as 2X more trustworthy as traditional media when choosing products yet Social Media makes up less than 0.1% of total marketing spend.
  9. 9. Why is this? Does Social Media not work?
  10. 10. @DellOutlet • Sell refurbished equipment exclusively via Twitter using coupon codes. • With 2,500 followers they sold $500k worth of equipment. • In June 2009, with a little over 600k followers they passed the $3 million mark in sales. • Today they have 1.5 million followers and their sales figures for 2010 are unknown.
  11. 11. @Twelpforce • Best Buy encouraged hundreds of employees to engage with customers who have questions about the company and products. • At the end of 2009 Twelpforce answered 19,500 questions and over 2,300 employees are signed up. • They've set themselves apart from competitors by sharing knowledge on demand to anyone. • Through Twitter they have humanised their organisation and exposed their employees to Social Media.
  12. 12. Best Buy Shop • Setup a virtual storefront on Facebook where you can purchase products from within the application. • Customers can search for products or ask friends to review products before they buy them. • Beyond @Twelpforce this drives sales and revenue derived straight from Social Media. • Facebook virtual storefront has over 1.2 million fans....
  13. 13. Better examples of Social Media ROI • Cisco study found that 43% of visits to online support forums are in lieu of opening a support case through standard methods. • Cost per interaction in customer support averages $12 via a call center versus $0.25 via self service options. • Forrester reports that customers report good experiences in forums more than twice as often as they do via calls or mail. • eBay found that participants in online communities spend 54% more than non-community members.
  14. 14. Better examples of Social Media ROI These examples concern far greater sums of money than say the $3 million @DellOutlet generated. • Better customer experiences, • Far lower support costs, and • More buying activity in the long run.
  15. 15. How Cisco saved $100,000 off a Product Launch Launched a new router using social media exclusively. • Second Life • A 3D game • YouTube • Video Conferencing • Mobile • Facebook • Widgets • Blogs • Forums
  16. 16. Social Media Launch Highlights • 9000 people attended the launch event - 90x more than in the past. • Saved 158k litres of fuel. • 3x as many press releases to the normal traditional outlets. • 1,000 blog posts & 40 million online impressions in exposure. • One-sixth the cost of a traditional launch. • Was classified as one of the top 5 launches in company history.
  17. 17. The Real-World Stuff...
  18. 18. Learning Channel • Strategy was to engage target market with LC offering. • Want to sell items from their eshop website • Students kept asking for free learning tools, advice, etc. • Use those students to find more info about them and convert them into a lead with the school they attend.
  19. 19. Using Social Media to build a business • used social media exclusively to promote, engage and grow our product. • Got international coverage in CNN, and top tech blogs in the US. Local press coverage followed. • Ad networked spawned from this and has paid bloggers over R520k this year. • Startups are driving innovation using Social Media because of realtime interaction, low cost marketing and support.
  20. 20. Analysing the case studies SM effort Primary ROI Secondary Rev/Saving Cost saving @DellOutlet Sales $3 million+ & new cust Brand equity @Twelpforce Support $230k & sales Cost saving Best Buy FB Shop Sales $?? million & new cust Cost Brand equity Cisco $100,000+ savings & sales Learning Channel Engagement Leads R??? Product dev, Sales, brand Afrigator R2 million engagement equity, bus
  21. 21. "10 years ago you could not engage with users you had not met yet...." -- by, Another Smart Person
  22. 22. Twitter: @justinhartman