How to Get a Grasp on ROI for Social Media

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http://spiral16.com Realizing ROI for social media company initiatives is challenging because there the medium itself isn't purely financial, yet ROI is a financial metric. There is no ROI calculator that works for every company, but this presentation will help you wrap your head around the big picture, and get you thinking clearly about how you can calculate social media ROI for your business.

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How to Get a Grasp on ROI for Social Media

  1. 1. How to Get a Grasp on ROI for Social Media Eric Melin @SceneStealrEric @spiral16
  2. 2. Social Media Isn’t a Fad. • An average of 900,000 blog posts a day • 4-6 million tweets an hour on average • Over 30 billion pieces of content (videos, notes, status updates, pages) shared on Facebook in a month It’s here to stay.
  3. 3. Social Media Is Not An “Add-On.” It should be an integral part of doing business.
  4. 4. Who Owns Social Media? • Public relations? • Marketing? Which parts of your business can benefit from social media? Who should be responsible for social media?
  5. 5. Who Owns Social Media? • Public relations – crisis mgmt • Marketing – brand reputation mgmt • Sales/BizDev – lead generation • Customer service – engagement/retention • Product development – competitive intelligence • IT – deployment/integrating new solutions Everyone.
  6. 6. Social Media Isn’t Free. It takes valuable time. You need human resources for: Planning Creative insight Content creation Product management Measurement …and more.
  7. 7. What Does ROI Mean? ROI = (Gain from Investment) - (Cost of Investment) Cost of Investment Return on investment is a popular metric because of its versatility and simplicity. It is challenging to define gains and costs when measuring ROI for social media efforts.
  8. 8. There is no way to calculate social media ROI with a one-size- fits-all equation. Image from glynndevins.com -- and modified
  9. 9. • ROI deals with money invested and money gained—it’s a financial metric. That financial aspect is not inherent to social media—it’s not built-in. Why it is Difficult
  10. 10. To figure out ROI, you must bring the two together. Make sure your social media initiatives (nonfinancial) are supporting your business goals (financial) Have clearly defined business objectives before you start. THE MOST IMPORTANT THING TO REMEMBER
  11. 11. Are We There Yet? Subjective metrics tell you how the trip is going. Objective metrics tell you when you’re there.
  12. 12. Common Metrics Frequency and volume of: • Twitter followers • Retweets • Facebook likes • Brand mentions • Blog comments • YouTube views Are these things important? Ask yourself which ones that matter to your business.
  13. 13. Fostering Community The US Navy’s Facebook page acts as a bridge between • Active Duty, Reservist, and Navy Civilians • Family and friends of Navy personnel • Veterans and former Navy employees • Potential recruits • Navy enthusiasts Which results in… • 7-20K Facebook interactions • 500-700 Twitter mentions • 2,500-3,000 visits to the NavyLive blog • 10-15K referrals to Navy.mil “Managing Audience Engagement to Gain and Retain Public Involvement” - CDR Scott McIlnay (2010) Per week.
  14. 14. Social Media Challenge: 2 Ways to Implement • Figure out how social media can support existing company initiatives. • Create new social media initiatives that help you reach your business goals and impact your bottom line.
  15. 15. Objective Metrics If your goal is … Driving brand awareness - Look at metrics like share of voice, reach, and volume of engagement. To increase customer satisfaction or improve customer retention - Look at things like sentiment, satisfaction rates in surveys, speed of resolution and percent of queries resolved.
  16. 16. Objective Metrics If your goal is… Creating better products - Focus on top market trends and gauge satisfaction with various competitive products. Growing brand loyalists - Look at who your advocates are, measure their influence, their reach, and their engagement with your product. Discovering new sales leads or new markets - Discover and map the communities that are relevant to your category.
  17. 17. Traditional Metrics Social media shouldn’t be exempt from that. Good news: That online data is already there. Image from JoiningDots.net • Every business is sitting on a wealth of data. • You expect those areas of your business to present that data in a measureable way.
  18. 18. Online Data That Matters • Semantic Results • Sentiment • Volume/Frequency • Where does it live?
  19. 19. What We Know So Far Make sure your social media initiatives are supporting your business goals. Most of the common metrics are a means to an end. The metrics you need are out there—it’s up to you to do define your ROI. Let’s give it a shot.
  20. 20. 1. Establish Benchmarks What was the data like before implementing social media?
  21. 21. 2. Develop Strategy How does social media support my business goals?
  22. 22. 3. Measure Results How results are measured will be different for everybody. This process should be customized for your business. Measure effort and resources against real-world results that affect your bottom line.
  23. 23. 4. Correlate Traditional Metrics with Online Metrics • Actual sales • Retail traffic • # of transactions • New customers • Amount per transaction • Site visitors • Time spent on webpage • Conversion stats • Positive/negative sentiment • Message reach • Volume of conversation • Relevancy • Frequency • Linkages • Comments • Clickthrus These are suggestions. Yours may be different.
  24. 24. Questions to Ask Yourself • Did you see spikes in sales in correlation of your social media efforts? • What other patterns can you find?
  25. 25. Data Without Context is Noise.
  26. 26. More Questions to Ask Yourself Forrester’s Social Media Marketing Scorecard considers metrics from four different perspectives: Financial: Has revenue or profit increased or costs decreased? Brand: Have consumer attitudes about the brand improved? Risk Management: Is the organization better prepared to note and respond to attacks or problems that affect reputation? Digital: Has the company enhanced its owned and earned digital assets?
  27. 27. It’s Not Always Difficult Sometimes just being able to illustrate that you have the ability to create business gains through social media is enough … …to reach your goal.
  28. 28. Case Study Background: 20-year hunting and fishing TV show Needed to expand their brand association with general outdoor adventure to attract large retailers Company Goal: Win Retail Licensing Program
  29. 29. Tactics • Developed an outdoor adventure site to promote outdoor recreation activities • Identified influencers in targeted communities like hiking, mountain biking, snow shoeing, bird watching and sent targeted messages about their brand • Started a blog and included stories about outdoor adventure activities • Began tweeting about specific outdoor recreational activities while shooting TV shows
  30. 30. AO measured word association with their brand and saw the new words such as adventure, outdoor, activities, experts, professional, training show up in their semantic cloud. AO illustrated the overwhelmingly positive sentiment associated with their brand and did competitive research on targeted retail brands to compare their sentiment. AO ultimately shared this data with the retailer and earned a licensed goods program worth several million dollars over three years – identified their overall costs of social media efforts including listening, engaging and measuring as $25,000. Gains
  31. 31. Conclusions • Goal: Understand that social media represents a new set of measurements that can be correlated with your traditional financial metrics. • Challenge: Figure out which social media metrics can support your business objectives and be correlated to increase your ROI.
  32. 32. Thank you from Eric Melin @Spiral16 @SceneStealrEric www.spiral16.com Special thanks to the organizers of PodCamp Topeka and The American Outdoorsman

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