This document discusses the concept of social media return on investment (ROI) and presents various perspectives on calculating and quantifying ROI. It then outlines some assumptions for calculating ROI, including lifting the effectiveness of marketing, impact on search engine optimization, and risk mitigation. Next, it discusses ROI considerations for the market ecosystem, customer/brand ecosystem, and customer mindspace. It provides formulas for calculating awareness value and potential value of risk mitigation. Finally, it presents an example social media strategy with objectives, metrics, targets, and current performance.

1. Social Media ROI?
Ric Dragon @RicDragon

2. What's the ROI of
Trust and what’s
the ROI of Loyalty?
-Ted Rubin

3. Every time I hear
‘social media ROI,’
a kitten dies.
-Scott Stratton

4. Would you
want to know the
ROI of your
mother?”
-Gary Vaynerchuk

5. What’s the
ROI of putting on
your pants
in the morning?
-Scott Monty, Ford
Motor Co.

9. THE
MARKET
ECOSYSTEM
CUSTOMER/
BRAND
ECO-SYSTEM
IN THE
CUSTOMERS
MIND

10. ASSUMPTIONS

11. THE MARKET ECO-SYSTEM
1.Marketing Lift
2.Impact on Search Engine
Optimization
3.Risk Mitigation

12. Customer/Brand System
4.Transaction (the actual
purchase or negotiation)
5.Repeat transactions (TLV)
6.Loyalty – resistance to
change
7.Advocacy

13. The Customer Mindspace
8.Awareness
9.Recognition
10.Associations
11.Perceived Quality
12.Likeability

15. a Force Multiplier

16. Awareness Value =
(Market Size) X
(Awareness Change %)
X (Purchase Intent %) X
(Sales Conversion %) X
(Unit Profits €)

17. Lift
• Could well-executed social media increase the
effectiveness of current advertising spend by 1% If
so, what would that be worth?

18. Frequency
Hermann Ebbinghaus Forgetting Curve

19. Value of Risk Mitigation
Potential Cost X Likelihood of Occurrence X Mitigation Benefits =
value of mitigation

21. Purpose
& Vision
Create
Indelible
Memories
Goal
Be center to
more
storytelling in
social media
Objectives
Metrics
Publish
excellent blog
content at
least six times
/ month
# of blog
posts / month
Increase community
by 50%
# of followers
# of interactions
Increase engagement
by 100%
# of comments on blog
# of mentions
Increase amplification
by 50%
# of shares

22. 3000
Target
1000
NOW
Twitter Retweets

23. What’s the
ROI of
Social Media?

24. Grazie Mille
Ric Dragon,
DragonSearch
dragon@dragonsearch.net
Twitter: @ricdragon