Tom McClintock gave a presentation on calculating the return on investment (ROI) of social media. He discussed two viewpoints - that ROI from social media cannot be calculated since much of its value is indirect, and that ROI can and must be calculated. He provided examples of companies that successfully measured ROI. McClintock also outlined new approaches to calculating ROI from social media, such as measuring retention, research, and sentiment. He concluded by discussing tools and case studies for measuring social media ROI.

1. What is Your
Social Media ROI?
Date: March 26, 2012
Time: 3:15 – 4:30 pm
Hub Tag: #ideas12 LM8
Tom McClintock

2. A Presentation By:
Tom McClintock
Colorado Springs, CO · Richmond, VA

4. Agenda
Social Media (SM)’s
Latest Triumphs
ROI Opposite Corners
New Math, Cases and
Available Tools

5. Source: Three Ships Media

6. Viewpoint #1
You can’t—and shouldn’t try to—calculate the ROI
of social media.

7. VIEW 1: No ROI from SM
 Having thousands of followers doesn’t necessarily translate into SM
marketing success
 You can easily measure only some things
• Coupons
• Contests
• Clicked links
• Signups
 Much of SM’s benefit is indirect or intangible—not
an asset purchased and placed on
balance sheet

8. VIEW 1: No ROI from SM
 SM is an investment in a
relationship with your audience
that converts them into advocates.
 Value is derived from qualitative
benefits.

9. VIEW 1: No ROI from SM
Qualitative Benefits In Each Stage of Your Marketing
Campaigns:
 Research
 Strategic Planning
 Implementation
 Evaluation
Source: Synovate Research, Alexa Global Traffic Ranking,
Morgan Stanley Research

10. VIEW 1: No ROI from SM
Implementation
 Driving traffic to your website
 Branding
 Risk management
 Conversions based on goals
http://annualreport.pg.com/annualreport2011/innovating/oldspice.shtml

11. VIEW 1: No ROI from SM
If you need to calculate ROI, think of it as activity-based, not
medium-based—i.e., Focus on the relationship between the
activity and the outcome.
Social Media is a tool, just like a telephone, email or computer.

12. Viewpoint #2
You can—and must—calculate the ROI of SM.

13. VIEW 2: Calculating ROI from SM
Comcast Starbucks Livestrong
Twitter customer Goes to customers Raised $10.8 million
service center attracted through SM for new with Livestrong
2,700 followers. Many product ideas. Now Challenge through SM
critics of the company when it launches a new channels with blog as
converted to raving product, it already has hub.
fans. millions of fans.
Source: Petersen, Rob. 34 cases that prove social media ROI,
http://barnraisersllc.com/2010/10/33-13-social-media-case-studies-prove-roi

14. VIEW 2: Calculating ROI from SM
Low investment in SM leads to high ROI when
organizations:
 Have a clear business strategy
 Aren’t afraid to jump in
 Make imaginative use of social
channels, customer engagement and
brand relationship
Source: Petersen, Rob. 34 cases that prove social media ROI,
http://barnraisersllc.com/2010/10/33-13-social-media-case-studies-prove-roi/

15. VIEW 2: Calculating ROI from SM
So how did BarnRaisers find an ROI when so many others couldn’t?
Let’s take another look at the formula that the naysayers cite:
(Return – Investment)
Investment

16. Must all SM ROI Be Sales-Based?
If your goal is sales, you can
measure ROI using the standard
financial formula:
(Return – Investment)
Investment
But what if you’re, say, an
Association…with returns less
tangible, e.g., raising consumer
awareness about your industry?

17. New Math
BarnRaisers and others realize that social has not only
decentralized and disaggregated, but it’s also dematerialized
—things are less tangible
Less Tangible Today
• Publishing • Hollywood Studios
• Content • Trade Shows
• Workplace • Friendships
• Corporate Structure • Business Contacts
• Pricing (Freemium Model) • Assets, too!
 Great Idea #1: social redefines how we generate and
value returns in a less tangible world

18. New Math
 Great Idea #2: Untethered, ROI metrics can now go beyond
sales dollars to include Retention, Research and Sentiment
values as major currencies to track your messaging

19. Don’t Base ROI on Sales
If Sales isn’t Your Goal
Great Idea #3: when sales aren’t the goal, calculate the ROI
Return using the Persuasion Index
Defined by 5 levels of agreement:
• Strongly agrees (5)
• Partially agrees (4)
• Neither agrees nor disagrees (3)
• Partially disagrees (2)
• Strongly disagrees (1)

20. Five Steps to Calculate SM ROI
 Step 1: Identify Objective sales, retention, market research—or
for most associations—sentiment
 Step 2: Define Metrics
• sales: thank-you page visits from tweeted landing page
• retention: repeat customers/Facebook posts
• market research: likes to announcement of potential new
product/number of Facebook fans
• sentiment: shift in percentage of conversation participants who agree
vs disagree to message point over time
 Step 3: Estimate SM campaign costs labor + ad spend +
premium value
 Step 4: Estimate SM Return against Objective via Metrics
 Step 5: Measure and report regularly

21. Measure ROI to Improve ROI
 Great Idea #4: Measure SM ROI with an eye
to improving it by:
• Increasing campaign impact
• Reducing campaign costs

22. Measure ROI to Improve ROI
Increase campaign impact
 Define goals
 Empower users through transparency
 Research offers
 Employ relevant premiums
 Utilize split-tested landing
pages
 Develop relationships
 Promote synergistic third party
offerings
 Establish social partnerships

23. Measure ROI to Improve ROI
Reduce campaign implementation costs
 Leverage SM team
 Establish SM culture
 Employ Twitter client
 Utilize SM browser
 Repurpose content
 Establish social partnerships

24. NSI CASE 1: Sentiment Measurement for
American Chemistry Council
 ROI: Message Point Delivery
 Problem: Regulators can’t keep up with
the latest in materials science, like Life
Cycle Assessment (LCA)—a methodology to
measure a building’s lifetime
environmental impact
 Objective: Raise Sentiment for LCA
Across Target

25. NSI CASE 1: Sentiment Measurement for
American Chemistry Council
 Messaging
• LCA reviews building materials through
all phases, from manufacture through
recycling
• LCA contrasts with single-attribute
assessment, such as whether the
product is made from recycled
material or whether it emits VOCs

26. NSI CASE 1: Sentiment Measurement for
American Chemistry Council
 Goals:
 Increase web traffic by 10% by December 2011 (+60%)
 Create regular weekly blog content on highest visibility sites
 Use Social Media to reach public and key Building & Construction
audiences

27. NSI CASE 1: Sentiment Measurement for
American Chemistry Council
 Methodology: 4-Phase Strategy
PHASE 1: PHASE 2: PHASE 3: PHASE 4:
Listening Strategy via Increase Change Blog and
ReputationConnect™ Social Voice Sentiment Twitter
Listening Platform Outreach

28. Data Assumptions and Tools

29. ROI Measurement Tools
Facebook Insights

30. ROI Measurement Tools
Facebook Insights

31. ROI Measurement Tools
Google Analytics
 Track Goals via
Conversion Funnels
• SM Traffic Only
• Review Correlations
Between SM Referral
Traffic and Goal
Conversions
 Utilize a Variety of Tools
 Define, Track, Measure,
Change, Repeat
Source: Lane, Brett, Engine-ius Marketing,
CEO Workshop 2011, Colorado Springs Marketing Group

32. ROI Measurement Tools
 Google Webmaster Tools
Source: Lane, Brett, Engine-ius Marketing,
CEO Workshop 2011, Colorado Springs Marketing Group

33. ROI Measurement Tools
 Facebook Google Analytics Tracker
Source: Lane, Brett, Engine-ius Marketing,
CEO Workshop 2011, Colorado Springs Marketing Group

34. ROI Measurement Tools
 Involver’s Static HTML for Pages
Source: Lane, Brett, Engine-ius Marketing,
CEO Workshop 2011, Colorado Springs Marketing Group

35. ROI Measurement Tools
 AddThis
Source: Lane, Brett, Engine-ius Marketing,
CEO Workshop 2011, Colorado Springs Marketing Group

36. ROI Measurement Tools
 PowerReviews
Source: Lane, Brett, Engine-ius Marketing,
CEO Workshop 2011, Colorado Springs Marketing Group

37. Contact Information
Tom McClintock
NSI Partners
719.328.0042 x801
tom@NSIpartners.com
www.NSIpartners.com