The REAL Costs of Social Media
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The document discusses the real costs of social media and how to measure return on investment. It begins by outlining categories of social media costs like strategy, content creation, and staff time. Budgets can range from 10-12% of overall marketing budgets. The document then discusses how to measure ROI through methods like media equivalent value, data acquisition costs, and average fan lifetime value. It emphasizes that ROI measurements will continue to change and advocates flexible evaluation and adaptation of social media strategies.
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The REAL Costs of Social Media
- 1. The Real Cost of Social Media And why it’s totally worth it Katrina (Scooter) Kokoska Schipul @kkokoska kkokoska@schipul.com#schipulcon
- 2. What?! SMM isn’t free? @kkokoska// #schipulcon http://www.flickr.com/photos/75511860@N00/4353835455/
- 3. What We’ll Cover: 1.) Rethinking social media costs 2.) Budget planning breakdown 3.) Measuring ROI @kkokoska // #schipulcon
- 4. 1.) Rethinking the cost 43% of US companies are successfully finding new business with SMM.(Marketing Profs) A move from tinkering to full deployment In 2011 SMM will account for 10.1% of marketing budgets Up from 7.1% @kkokoska // #schipulcon
- 5. Custom Tabs The Fanpage @kkokoska// #schipulcon
- 6. Hub of your social media presence Home of your promos Gateway to your website SEO @kkokoska // #schipulcon
- 7. The Ticker The Newsfeed @kkokoska// #schipulcon
- 8. Facebook accounts for 90% of time spent social networking The Newsfeed accounts for 4% of ALL time spent online Users are 40-150 times more likely to consume your content in their newsfeed than on your page The average Facebook user has 130 friends (comScore) @kkokoska // #schipulcon
- 9. Sponsored Content @kkokoska// #schipulcon
- 10. Newsfeed is more and more competitive Built-in endorsements Flexible and easy-to-use @kkokoska // #schipulcon
- 11. The Cost of Facebook: Strategy Design Content creation Development/Hosting Third-party apps Research Legal counsel TIME @kkokoska // #schipulcon
- 13. Getting Started @kkokoska// #schipulcon
- 14. A Week of Twitter Content Research – 2 hrs. 3-5 tweets per day – 2 hrs. Monitoring – 2 hrs. Third-party apps – Btwn. $0 and $500/month Evaluation – 1 hr @kkokoska // #schipulcon
- 15. Social Media Toolbox @kkokoska// #schipulcon http://www.flickr.com/photos/95248808@N00/178177044/
- 16. Types of Tools Twitter – Tweetchat, Tweetdeck, Hootsuite Facebook – North Social, Short Stack Listening – Radian 6, Traackr Tracking – Google Analytics, bit.ly Content Creation @kkokoska // #schipulcon
- 17. Folding it in @kkokoska// #schipulcon
- 18. Is this really worth all the trouble? SMM is projected to be $3.08 billion of online marketing spends – 10% (eMarketer) Organizations are increasing aspects of their SMM budget between 18% and 95% (eMarketer) @kkokoska // #schipulcon
- 19. Communicating at Your Audience @kkokoska// #schipulcon http://www.flickr.com/photos/38115734@N00/470341923/
- 21. Communicating with Your Audience @kkokoska// #schipulcon http://www.flickr.com/photos/75511860@N00/4353835455/
- 23. Potential Impressions 621 likes 18 shares 56 comments 9 liked comments 91,650 potential impressions @kkokoska // #schipulcon
- 26. Time spent: 1.5 hours
- 27. Total: $150
- 29. CPM = $.002
- 31. Production Time: 2-4 weeks
- 32. 30-second radio spot: $335
- 33. Total: A LOT
- 35. CPM = $21.89-$36.31 @kkokoska // #schipulcon
- 37. Twitter
- 38. Tools
- 39. IntegrationWhy it’s totally worth it How it stacks up against traditional media @kkokoska // #schipulcon
- 40. 2.) Budget Planning Breakdown @kkokoska// #schipulcon http://www.flickr.com/photos/37108241@N00/61056391/
- 41. We’ll Cover Ways to look at it In plain numbers Things to consider @kkokoska // #schipulcon
- 42. Breakdown: By Category @kkokoska // #schipulcon
- 43. Breakdown: By Platform Facebook Twitter Blogging LinkedIn Google + Yelp @kkokoska // #schipulcon
- 44. In Plain Numbers Calculate 10% and 12% of estimated gross sales Multiply each by the markup (not margin) of your average transaction Subtract rent Take 10% @kkokoska // #schipulcon
- 45. In Plain Numbers (cont.) Gross Sales: $5,000,000 Markup: 100% Rent: $250,000 Marketing Budget: $250,000 (10%) - $350,000(12%) SMM Budget: $25,000 - $35,000 @kkokoska // #schipulcon
- 46. Things to consider: What are your objectives? What is your overall marketing budget? How are your current efforts working? What are your resources? Social media changes – A LOT! @kkokoska // #schipulcon
- 47. 3.) Ways to Measure ROI @kkokoska// #schipulcon http://www.flickr.com/photos/33275659@N02/3863299641/
- 48. A few truths It’s not a thing This will continue to change Fans outspend non-fans by up 5 times @kkokoska // #schipulcon
- 49. Media Equivalent Value Equivalent Targeted CPM Social Media Impressions MEV = X @kkokoska // #schipulcon
- 50. Data Value (Acquisition cost) Data Value Proportional Channel Value Acquired Customer Numbers = X @kkokoska // #schipulcon
- 51. Avg. Fan Value Unlikes – per – Month / Total Likes = Churn % 1 / Churn = Fan Lifetime Length (FLL) FLL x Posts-per-day = Opps-per-Fan (OPF) OPF x CTR = Clicks-per-fan (CPF) CPF x Conversion % = Sales-per-fan (SPF) SPF x Avg. $ per Sale = Avg. Fan Value @kkokoska // #schipulcon Dan Zarrella
- 52. Be Flexible @kkokoska// #schipulcon http://www.flickr.com/photos/33275659@N02/3863299641/
- 53. Takeaways Social Media can be a major investment with a major payoff. Carefully evaluate your brand, resources and budget before getting started. Always Evaluate and Adapt. @kkokoska // #schipulcon Dan Zarrella
- 54. Thanks! Any questions? Katrina (Scooter) Kokoska Schipul – The Web Marketing Company @kkokoska kkokoska@schipul.com @twitter // #schipulcon // http://bit.ly/schipslides
Editor's Notes
- For effective social media marketing, you need to be sure that your networks are easy for your consumer and target market to find. Website integration is a must. No matter who maintains your website, keeping this up-to-date with the most recent open graph implementations, will cost you or your organization a minimum of time.
- YES! Because it works. How do I know if works? According to eMarketer, the longer a brand spends doing SMM, the more money they invest. Breaking down the different aspects of SMM, the major players are increasing budgeting from anywhere between 18% and 95%. This tells me two things:They see the value, and the ROI, and believe it warrants more of their overall budget They are becoming more and more aware that social media DOES come at a cost, and that they just HAVE to adapt.Using social media gives you, as a brand or organization, the unique opportunity to communicate with your fans and potential consumers at a communal level. By virtue of the medium, social media users who are exposed to your brand, will be more receptive and accepting of your messages and impressions on them. What do I mean by communal level?There are a few different take on the relational theories model, first developed by Alan Fiske, but the basic gist is that there are 4 Elementary Forms of Human Relations. To avoid getting into the nitty gritty of the whole model, there are two relationships which apply directly to marketing.1.) Communal Sharing: Where people treat each other as equals. Where they can share comfortably. Examples of these relationships are your friends, family, many of your coworkers, co-members of an organization or the like. I would expect to hear about someone’s personal life, friendships, hopes, dreams, and day-to-day nonesense. In this type of relationship, all of these exchanges are expected and exceptable. Social media lives in this realm. It is a Communal environment because the relationships I have made within it are of the communal sharing nature.2.) Market Pricing (some people refer to this as the Exchange relationship): Here, exchange is expected. In an Exchange relationship, I would expect to be advertised to; I would expect negotiations. I will give you something and you will give me something based on the amount I have given you. This is the type of relationship that brands have with their consumers or potential buyers offline. I expect to be advertised to when I watch TV or drive down the road, listen to the radio or reading the newspaper. I’m OK with that because in those environments, I expect that type of exchange. It’s appropriate, and normal.In social media, these two worlds collide. Brands must tread carefully, but the results can be astounding. Let’s take a closer look.
- Here are some examples of brands actually communicating with their audience. They are behaving in real time with the people who will potentially buy their products, support their organizations, advocate their services. And here’s where the magic happens. On Facebook, everytime a fan communicates with you in any way. Liking your page, commenting or liking a post, tagging themselves in a photo, whatever, it shows up on their wall. This means it can show up in all of their friends’ newsfeed or ticker. Let’s break this down:The average Facebook user has 130 friends.The above Facebook post has 621 likes, 18 shares, and 56 comments. Of the 56 comments, 9 had likes. This is a total of 705 actions taken on one Facebook post. It’s a silly drawing that probably took someone 15 minutes to draw. Each time someone took one of these actions, it showed up on their 130 friends’ pages. This amounts to a total of 91,650 brand impressions. But not just any brand impression. This brand impression has value. Your friend, positively communicating with a brand, knowing you will be exposed to the information, is the closest thing to a word of mouth endorsement that you can get to without someone actually pulling you aside and endorsing a brand. This carries communal weight. While it might not result in a direct sale, it create favorable brand impressions. No one is saying quit traditional advertising, but it would be foolish not to fold this into your marketing mix. Yes, it costs money, but marketing costs money, and social media is the most effective way to reach out to your audience, on their terms, when they are receptive to the message, about what and who you really are. It’s not about crafting the perfect 30 second spot, or the most eye-catching billboard, it’s about listening to your consumers, hearing what they want and being able to give it to them. Behaving communally.Beyond that, this a forum for you to communicate in real time with your fans regarding things that are happening in your organization or brand. If a crisis comes up, something unexpected happens, you are getting unexpected media coverage. You can address it. It costs money but it’s so much cheaper than the alternatives. Talk about he alternatives. Get some stats about TV, radio or print advertising.