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Measuring Social Media: Where's the ROI?

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Measuring Social Media: Where's the ROI?

Download to read offline Social media ROI is tough to calculate because its a financial metric, and social media's value is not inherently financial. But the challenge isn't new -- finding ROI is difficult in other programs and campaigns as well. This presentation gives you 6 steps you can follow to measure an effective social media program. Social media ROI is tough to calculate because its a financial metric, and social media's value is not inherently financial. But the challenge isn't new -- finding ROI is difficult in other programs and campaigns as well. This presentation gives you 6 steps you can follow to measure an effective social media program.


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Measuring Social Media: Where's the ROI?

  1. 1. Measuring Social Media: Where’s the ROI?<br />Tracy Panko<br />@TracyPanko<br />@spiral16<br />
  2. 2. Social Media is a Game Changer<br />It gives people a voice.<br />Social media is radically changing <br />cultures all over the world. <br />*Egypt revolution,<br />
  3. 3. The Ability to Share Experiences Isn’t Going Away<br />An average of 900,000 blog posts a day<br />4-6 million tweets an hour on average<br />Over 30 billion pieces of content (videos, notes, status updates, pages) shared on Facebook in a month<br /> *<br />
  4. 4. Social Media is Transforming Business Culture & Methodology<br />“In the future, there will be two types of companies:<br />Those that are agile and adapt to consumers’ changing business behavior …<br /> and those that go out of business.”<br />Of the 500 original companies listed on Standard & Poor’s 500 in 1957, only 17% remained in 2007. <br />- Forrester research, CMO Mandate: Adapt or Perish<br />
  5. 5. Active Brand Marketing<br />“This is the approach that marketers must take to avoid extinction and thrive in the digital age.”<br /> Active brand marketing-A flexible approach in which marketers respond quickly to their environment to align consumer and brand goals and maximize return on equity.<br />- Forrester research, CMO Mandate: Adapt or Perish<br />
  6. 6. Adapting is a Challenge …<br />64% of marketers experienced problems trying to implement digital marketing initiatives. <br />Only 4% of marketing leaders feel that they are prepared to exploit digital marketing opportunities.<br /> - Accenture Interactive 2010 study<br /> …but it’s also a huge <br /> opportunity.<br />Photo credit:<br />
  7. 7. Build Relationships and Develop Trust with Your Customers<br /><ul><li> People want to participate in conversation.
  8. 8. People want to be part of a community.
  9. 9. People don’t want to be marketed or broadcast to.</li></ul> Photo<br />
  10. 10. Start With What You Know<br />You’ve identified your company’s business goals already.<br />Company goals<br />Social media campaign<br />Success<br />Now think about how you can achieve those goals through a social media program<br />
  11. 11. Social Media Progam is a Component, <br />Use it to support your existing business strategy.<br /><ul><li> Create a structure for your program based on the unique needs of your company.
  12. 12. Build it from the ground up.
  13. 13. The more customized, the better.</li></li></ul><li>Social Media Isn’t Free.<br />It takes valuable time.<br />You need human resources for:<br />Planning<br />Creative insight <br />Content creation<br />Product management<br />Measurement <br />Monitoring<br />…and more.<br />
  14. 14. Why Social Media ROI is Tough<br />ROI = (Gain from Investment) - (Cost of Investment)<br />                     Cost of Investment<br />                                     <br /> <br />Return on investment is a financial metric. <br /> <br />That financial aspect is not clearly defined in social media—it’s not built-in.<br />
  15. 15. But This Challenge Isn’t New<br />                                     <br /> <br />Calculating ROI for print ads and radio ads has always been difficult.<br />Metrics relies on the people influenced by print and radio self-identifying themselves or coupon codes being recorded and collected. <br /> <br />Calculating ROI for social media is also difficult because it is integrated into your overall strategy—it is hard to separate.<br />
  16. 16. There is no way to calculate social media ROI with a one-size-fits-all equation.<br />                                     <br /> <br />Image from -- and modified<br />
  17. 17. 6 Steps To An Effective Social Media Campaign<br />                                     <br /> <br />Identify business goals.<br />Align goals with social media program.<br />Establish benchmarks.<br />Set realistic targets.<br />Measure KPIs to determine success.<br />Look at results, find ways to improve.<br />
  18. 18. 1. Identify Business Goals<br />Make sure your social media initiatives (nonfinancial) <br />are supporting your business goals (financial)<br />                                     <br /> <br />Think about this:<br />Where is the company now?<br />Where does it want to be?<br />What will it take to get there?<br />
  19. 19. What Do You Hope to Gain?<br /><ul><li>Increase Total Sales
  20. 20. Reduce Customer Service Expenses
  21. 21. Acquire New Customers
  22. 22. Reduced Cost Per Transaction
  23. 23. Increase in Qualified Leads
  24. 24. Higher Value Per Sale
  25. 25. Increase in Customer Satisfaction
  26. 26. Increase in Reach
  27. 27. Introduce New Products/Service Enhancements
  28. 28. Attract New Employees
  29. 29. Encourage Repeat Purchases/Build Customer Loyalty</li></ul> <br />
  30. 30. 2. Align Social Media Program with Goals<br />Avon tinkered with its well-known door-to-door and catalog-based direct sales model by empowering its salespeople with social selling tools like its FacebookeBoutique and iPhone app.<br />Social media platform <br />Avon Connects virtually <br />attaches consumers to their <br />local Avon rep, at which point<br />traditional face-to-face<br />service begins.<br /> <br />
  31. 31. Tools Are Not Strategies<br /> <br />  <br /> <br /> <br /> <br /><ul><li> Twitter
  32. 32. Facebook/MySpace
  33. 33. Blogs
  34. 34. Forums
  35. 35. YouTube
  36. 36. Foursquare/Gowalla
  37. 37. Flickr
  38. 38. Webinars
  39. 39. Podcasts</li></ul>Being active on these platforms is only important <br />if <br />using them helps you reach your goal.<br />
  40. 40. Listening Goals<br />Who is saying what, when, and where?<br /> <br />  <br /> <br /> <br /> <br />• Protect your reputation<br />• Facilitate customer support<br />• Invite innovation<br />• Build trust<br />• Market through conversation (promote and sell)<br /><ul><li> Gather business intelligence</li></ul> - Jason Falls, Social Media Explorer<br />
  41. 41. Measurement Goals<br />What are you getting out of it?<br /> <br />  <br /> <br /> <br /> <br />• Improve branding and awareness <br />• Protect and improve reputation<br />• Build community or advocacy <br />• Increase customer satisfaction<br />• Harvest research & development<br /><ul><li> Drive sales or leads</li></ul>- - Jason Falls, Social Media Explorer<br />
  42. 42. 3. Establish Benchmarks<br /> <br />  <br /> <br /> <br /> <br /> What does your online presence look like before the program? <br />There are numerous free and paid tools to determine this:<br /><ul><li>Free monitoring solutions – Google Alerts, Twitter Search, Social Mention, PeopleBrowsr, IceRocket
  43. 43. Paid monitoring solutions – Lithium, Radian6, Sysomos, Trackur
  44. 44. Online listening & research solutions – Spiral16, Crimson Hexagon, Cymfony, ConsumerBase
  45. 45. Influencer tools – Alltop, Klout, mBlast, Postrank</li></li></ul><li>Common Metrics<br /> <br />  <br /> <br /> <br /> <br />Frequency and volume of:<br /><ul><li> Twitter followers
  46. 46. Retweets
  47. 47. Facebook likes
  48. 48. Brand mentions
  49. 49. Blog comments
  50. 50. YouTube views
  51. 51. Number of check-ins</li></ul>Are these things important?<br />Ask yourself which ones matter to your business.<br />
  52. 52. Advanced Metrics<br /> <br />  <br /> <br /> <br /> <br /><ul><li> Volume of brand mentions
  53. 53. Share of voice</li></li></ul><li>Advanced Metrics<br /> <br />  <br /> <br /> <br /> <br /><ul><li> Positive/negative sentiment ratios
  54. 54. Positive/negative volume over time, correlation</li></li></ul><li>Advanced Metrics<br /> <br />  <br /> <br /> <br /> <br /><ul><li> Penetration of marketing keywords
  55. 55. Create custom data sets to discover trends</li></li></ul><li>Advanced Metrics<br /> <br />  <br /> <br /> <br /> <br /><ul><li> Identify influencers in your topic or around your brand
  56. 56. Discover how brand messages spread across the Web</li></li></ul><li>Advanced Metrics<br /> <br />  <br /> <br /> <br /> <br /><ul><li> Learn what types of sites are the most relevant</li></li></ul><li>4. Set Realistic Targets<br /> <br />  <br /> <br /> <br /> <br />Social media campaigns can be some of the least expensive ways to grow sales and awareness.<br />Set specific targets based on your company goals:<br />Increase total sales by 5% <br />Increase cost savings by 15% <br />10% increase in qualified leads <br />Convert 5% followers and “likes” to transacting customers<br />Grow online community to 10,000 members<br />20% increase in customer satisfaction <br />Increase total transactions by 7%<br />
  57. 57. 5. Measure KPIs to Determine Success<br />Look only at the metrics that concern your goal.<br /> <br />  <br /> <br /> <br /> <br /><ul><li> Website metrics/traffic
  58. 58. Social audience metrics
  59. 59. Fans/Followers/Friends
  60. 60. Conversions
  61. 61. User-generated content
  62. 62. Comments
  63. 63. Ratings/Reviews
  64. 64. Downloads
  65. 65. Volume of conversation
  66. 66. Search metrics
  67. 67. Sentiment & tone
  68. 68. Backlinks
  69. 69. Competition comparison
  70. 70. Share metrics
  71. 71. Referrals
  72. 72. Click throughs</li></ul> - Jason Falls, Social Media Explorer<br />
  73. 73. Correlate Traditional with Online Metrics<br />This process requires detective work.<br />It isn’t always obvious.<br />Patterns reveal themselves as you sort and filter results.<br /><ul><li>Actual sales
  74. 74. Retail traffic
  75. 75. # of transactions
  76. 76. New customers
  77. 77. Amount per transaction
  78. 78. Leads
  79. 79. Surveys</li></ul>- Social Media ROI, Olivier Blanchard<br />
  80. 80. Put Results on a Timeline<br />Did you see spikes in sales in correlation with your social media efforts?<br />What other patterns <br /> can you identify?<br />
  81. 81. Measuring Social Media Programs Can Find Real Savings<br /> <br />  <br /> <br /> <br /> <br />In 2009, Ford built early awareness for the Fiesta with influential bloggers who tested and wrote about it<br />In 2010, Ford launched the Fiesta Project, an effort to capture user-generated video. <br />As a result, Ford learned it could reduce cost of subsequent launches by as much as 90%. <br />- Forrester research, CMO Mandate: Adapt or Perish<br />
  82. 82. 6. Look at Results, Find Ways to Improve<br /> <br />  <br /> <br /> <br /> <br />The great thing about web measurement is …<br />You don’t have to wait for all your results. <br />They update as the program continues.<br />And you have every opportunity to view those results and make changes to your program along the way.<br />
  83. 83. It’s Not Always Difficult<br />Sometimes just being able to illustrate that you have the ability to create business gains through social media is enough …<br />…to reach your goal.<br />
  84. 84. Conclusions<br />Goal: Understand that social media represents a new set of measurements that can be correlated with your traditional financial metrics.<br />Challenge: Figure out which social media metrics can support your business objectives and be correlated to increase your ROI.<br />
  85. 85. Thank you from<br />Special thanks to the organizers of<br />NAMA<br />Tracy Panko<br />@Spiral16<br />@TracyPanko<br />