Social Media ROI

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Tracy Panko, Spiral16 CEO, made a presentation to the KCIABC on social media ROI.

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  • Perspective to my approach to this meeting when I talked to Tom about the opportunity-Wish I had a magic formula I could share that we could all use to calculate the right amount of investment (time, staff and money) that will equal the right amount of value for our companies (x% increase in revenue) but the reality is that doesn’t exist. However, determining your return on investment for social media is important and my goal today is to share some information and data on ROI measurements and ask you some questions along the way to help you identify some ways each of you can measure the work you are doing.
  • of an investment is divided by the cost of the investment; the result is expressed as a percentage or a ratio. Companies don’t have perfect knowledge of the financial activity surrounding marketing initiatives, but by understanding the benefits that are possible with marketing ROI techniques it is easier to justify the actions necessary to improve your knowledge. The goal is to identify what can be implemented in your current environment and how you can make improvements to support further implementation. Imagine how silly this conversation sounds:   “ Dad, are we there yet?” “18 cheeseburgers and 220 french fries, son!” “ What?” “ Dad, are we THERE yet?” “So far we’ve managed 21.7 miles per gallon. Isn’t that great?” “What?”   And so on. This is a silly conversation, yes? So why do we have this conversation: “ Are we succeeding in social media?” “We’ve got 220 Twitter followers!” “ Yes, but are we succeeding in social media?” “So far, we’ve managed 121 Likes on our Facebook page. People love us!”   These two conversations are the same. In both cases, we’re repeating back diagnostic metrics when the question is about objective metrics – are we there yet?
  • http://bit.ly/c36xeu This example is great analogy, makes an excellent point about the bigger picture with ROI: Imagine how silly this conversation sounds:   “ Dad, are we there yet?” “18 cheeseburgers and 220 french fries, son!” “ What?” “ Dad, are we THERE yet?” “So far we’ve managed 21.7 miles per gallon. Isn’t that great?” “What?”   And so on. This is a silly conversation, yes? So why do we have this conversation: “ Are we succeeding in social media?” “We’ve got 220 Twitter followers!” “ Yes, but are we succeeding in social media?” “So far, we’ve managed 121 Likes on our Facebook page. People love us!”   These two conversations are the same. In both cases, we’re repeating back diagnostic metrics when the question is about objective metrics – are we there yet?
  • Imagine how silly this conversation sounds:   “ Mom, are we there yet?” “18 cheeseburgers and 220 french fries, son!” “ What?” “ Mom, are we THERE yet?” “So far we’ve managed 21.7 miles per gallon. Isn’t that great?” “What?”   And so on. This is a silly conversation, yes? So why do we have this conversation: “ Are we succeeding in social media?” “We’ve got 220 Twitter followers!” “ Yes, but are we succeeding in social media?” “So far, we’ve managed 121 Likes on our Facebook page. People love us!”   These two conversations are the same. In both cases, we’re repeating back diagnostic metrics when the question is about objective metrics – are we there yet?
  • My message is – diagnostic measures for social media are important to identify and track over time but whats also important is that they are tied to your overall objective. Track the items you can measure over time and track the measures of your overall objective. If you are seeing improvements in your website traffic, and you are seeing an increase in total leads, and then an increase in sales…….one can conclude they are related
  • Social media has helped to level the playing field when marketing between large and small companies and those with budgets in the millions or those with budgets in the thousands
  • This is a very common sense, talkbasic snapshot of where to begin.  We will build the presentation up as we go and make more complex.
  • This is a very common sense, talkbasic snapshot of where to begin.  We will build the presentation up as we go and make more complex.
  • http://bit.ly/c36xeu This example is great analogy, makes an excellent point about the bigger picture with ROI: Imagine how silly this conversation sounds:   “ Dad, are we there yet?” “18 cheeseburgers and 220 french fries, son!” “ What?” “ Dad, are we THERE yet?” “So far we’ve managed 21.7 miles per gallon. Isn’t that great?” “What?”   And so on. This is a silly conversation, yes? So why do we have this conversation: “ Are we succeeding in social media?” “We’ve got 220 Twitter followers!” “ Yes, but are we succeeding in social media?” “So far, we’ve managed 121 Likes on our Facebook page. People love us!”   These two conversations are the same. In both cases, we’re repeating back diagnostic metrics when the question is about objective metrics – are we there yet?
  • Social Media ROI

    1. 1. ROI for Social Media Tracy Panko
    2. 2. What Does ROI Mean? <ul><li>Return On Investment </li></ul><ul><li>ROI = (Gain from Investment) - (Cost from Investment) </li></ul><ul><li>                     Cost of Investment </li></ul><ul><li>                                     </li></ul><ul><li>  </li></ul>Return on investment is a very popular metric because of its versatility and simplicity.    It is great for evaluating purchasing a new piece of capital equipment, or purchasing a company. Can be difficult to define gains and costs when measuring ROI for social media efforts
    3. 3. Process begins with Goals <ul><li>Increase Total Sales >>> Attract New Employees </li></ul><ul><li>Reduce Customer Svc Expenses >>> Encourage Repeat Purchases </li></ul><ul><li>Increase in Qualified Leads >>> Reduced Cost Per Transaction </li></ul><ul><li>Increase in Customer Satisfaction >>> Higher Value Per Sale </li></ul><ul><li>Increase in Total Transactions >>> </li></ul><ul><li>Introduce New Products/Service Enhancements </li></ul><ul><li>Increase in Number of Operating Locations/Retail Outlets </li></ul><ul><li>  </li></ul>Image from quickquotesltd.co.uk
    4. 4. Social Media ROI as a Road Trip <ul><li>Social Media is New Platform, Harder to Determine ROI </li></ul><ul><li>  </li></ul><ul><li>  </li></ul><ul><li>Diagnostic metrics tell you how the trip is going. </li></ul><ul><li>  </li></ul><ul><li>Objective metrics tell you when you’re there. </li></ul><ul><li>Both have value </li></ul><ul><li>  </li></ul><ul><li>  </li></ul><ul><li>  </li></ul>Image from perfectescapes.com
    5. 5. Diagnostic vs. Objective Metrics <ul><li>Diagnostic Metrics </li></ul><ul><li>  </li></ul><ul><li>Twitter followers website traffic retweets, Facebook fans </li></ul><ul><li>brand mentions comments on your blog positive sentiment </li></ul><ul><li>Negative sentiment influencer links total links </li></ul><ul><li>  </li></ul><ul><li>Diagnostic metrics are great way to let your </li></ul><ul><li>company know how the &quot;trip&quot; is going. </li></ul><ul><li>But you need to know the objective </li></ul><ul><li>metrics of your social media marketing. </li></ul><ul><li>Where are you going? What's your destination? </li></ul><ul><li>  </li></ul><ul><li>  </li></ul>“ Are we there yet?”
    6. 6. Objective Metrics <ul><li>Objective metrics can be identified for every area of your company but the most common are sales related. </li></ul><ul><li>Ongoing measurement is the key not just one moment in time </li></ul><ul><li>  </li></ul>
    7. 7. Small Gains Can Lead to Success <ul><li>Social Media ROI is Not Just About Short Term Success </li></ul><ul><li>Not all campaigns are meant to drive conversions, some are to capture subscribers or fans or Webinar participants. </li></ul><ul><li>These micro-conversions are small successes that can lead to massive social media reach and influence. </li></ul><ul><li>The higher your reach and influence, the more qualified leads your business can capture through social media. </li></ul>
    8. 8. Big Picture on ROI of Social Media <ul><li>67% - Increase in monthly sales leads for companies that blog over companies that don't blog. </li></ul><ul><li>  </li></ul><ul><li>434% - Increase in web pages </li></ul><ul><li>indexed by Google </li></ul><ul><li>for companies that blog </li></ul><ul><li>over companies that don't blog. </li></ul><ul><li>Why Does This Matter to Your Business? </li></ul><ul><li>Source: Data from over 1,500 small businesses - http://bit.ly/XDkQV </li></ul>
    9. 9. 43% of US Companies Will Be Blogging by 2012 - e Marketer
    10. 10. Companies with more indexed pages on Googl, ,aooo an, and nnnn generate more sales leads.   Every 50 to 100 incremental indexed pages can mean double-digit lead growth. Growth in new leads accelerates significantly once websites achieve 300+ pages indexed by Google. More Indexed Pages = $
    11. 11. Businesses which have more pages indexed by search engines generate more leads. Size of the business is not a factor in the number of pages your company can have indexed by Google and other search engines.   Blogging and using social media gives small to medium sized companies an edge over larger competitors with bigger budgets.     Can't Outspend Your Competition?  
    12. 12. Social Media is for Leads and Sales Source: State of Inbound Marketing Report - http://bit.ly/aewfHr
    13. 13. Blogging More Often Drives Results Source: State of Inbound Marketing Report - http://bit.ly/aewfHr
    14. 14. Leads by Indexed Web Pages Source: State of Inbound Marketing Lead Generation Report - http://bit.ly/cVMpkn
    15. 15. Measuring Social Media ROI Wide Range of Measurements
    16. 16. No Clear ROI Formula <ul><li>Social Media ROI controversial topic </li></ul><ul><li>  </li></ul><ul><li>Many different opinions and methods to measure ROI </li></ul><ul><li>  </li></ul><ul><li>Next slides offer some broad benchmarks </li></ul><ul><li>Formulas to calculate Social Media ROI </li></ul><ul><li>Let your common sense be your guide </li></ul><ul><li>Social Media ROI is evolving </li></ul>
    17. 17. KPI Metric - Search Engine Traffic <ul><li>Objective: Increase in Search Engine Traffic </li></ul><ul><li>Key Performance Indicators to Measure: </li></ul><ul><li>  </li></ul><ul><li>Search engine rankings - Has your website rank increased or decreased? </li></ul><ul><li>  </li></ul><ul><li>Inbound links - Number and quality of inbound links to your website. Growing? Remaining flat? </li></ul><ul><li>  </li></ul><ul><li>Number of pages indexed by search engines - Increase? </li></ul><ul><li>  </li></ul>
    18. 18. Basic KPI for Social Media <ul><li>Basic KPI Metrics for a Social Media Campaign </li></ul><ul><li>  </li></ul><ul><li>Unique visitors - Traffic to your website from social media  communities? </li></ul><ul><li>  </li></ul><ul><li>Blog subscribers -Does your blog have growing audience, how many subscribers? </li></ul><ul><li>  </li></ul><ul><li>Visitors converted - Do visitors come to your website and stay? Or do they leave after a few seconds? </li></ul><ul><li>  </li></ul>
    19. 19. Goals - Metrics to Measure <ul><li>If your goal is driving awareness, you will be looking at metrics like share of voice, reach, readership and engagement with content </li></ul><ul><li>If you need to increase satisfaction through better support, you need to look at sentiment, satisfaction rates in surveys, speed of resolution and percent of queries resolved. </li></ul><ul><li>  </li></ul>
    20. 20. Goals - Metrics to Measure <ul><li>If creating better products and doing market research is a goal, you need to focus on top market trends and satisfaction with various competitive products. </li></ul><ul><li>If developing customer advocacy is a goal, you should be looking at who your advocates are, measuring their influence and reach and their engagement with your product and content. </li></ul>
    21. 21. Forrester Research <ul><li>“ Marketers who only seek to measure results in one of these perspectives gets an incomplete picture and as a result are unable to make effective decisions about social media marketing investments. It is only recognizing all of the benefits delivered by social media marketing that the complete value of these efforts can be understood.” </li></ul><ul><li>An effective social media scorecard considers metrics from four different perspectives </li></ul>Posted by Augie Ray on July 19, 2010 at Forrester.com
    22. 22. Forrester Scorecard <ul><li>Forrester’s Social Media Marketing Balanced Scorecard considers metrics from four different perspectives: </li></ul><ul><li>Financial : Has revenue or profit increased or costs decreased? </li></ul><ul><li>Brand: Have consumer attitudes about the brand improved? </li></ul><ul><li>Risk Management: Is the organization better prepared to note and respond to attacks or problems that affect reputation? </li></ul><ul><li>Digital: Has the company enhanced its owned and earned digital assets? </li></ul>
    23. 23. Social Media Marketing B2B <ul><li>Consumer brands use of social media gets more media attention but B2B marketing growth exploding. </li></ul><ul><li>B2B marketing spending on social networking sites is predicted to rise 43.3% in 2010. </li></ul><ul><li>86% of B2B firms are using social media marketing, compared to 82% of B2C </li></ul>
    24. 24. Objective: Increase Audience <ul><li>AMERICAN EXPRESS OPEN </li></ul><ul><li>AMEX Open created “Idea Hub”. </li></ul><ul><li>Members can network, share content, video. </li></ul><ul><li>Members can interact with experts on AMEX Open </li></ul><ul><li>The social site has been extremely successful, increasing unique visitors 525% over the past year – from 160,000 in December 2008 to nearly 1 million in December 2009 . </li></ul><ul><li>  </li></ul>
    25. 25. Objective: Win Retail Licensing Program <ul><li>The American Outdoorsman </li></ul><ul><li>Background-20 year hunting and fishing tv show </li></ul><ul><li>Needed to expand their brand association with general outdoor adventure to attract large retailers </li></ul><ul><li>Developed an outdoor adventure site to promote outdoor recreation activities </li></ul><ul><li>Identified influencers in targeted communities like hiking, mountain biking, snow shoeing, bird watching and sent targeted messages about their brand </li></ul><ul><li>Started a blog and included stories about outdoor adventure activities </li></ul><ul><li>Began tweeting about specific outdoor rec activities while shooting shows </li></ul><ul><li>  </li></ul>
    26. 26. Objective: Win Retail Licensing Program <ul><li>The American Outdoorsman </li></ul><ul><li>Gains </li></ul><ul><li>Measured their word association with their brand and saw the new words adventure, outdoor, activities, experts, professional, training show up their semantic cloud </li></ul><ul><li>Measured the sentiment associated with their brand and did competitive research on targeted retailers brands to compare their sentiment </li></ul><ul><li>Captured specific positive comments about their brand </li></ul><ul><li>  </li></ul><ul><li>Ultimately shared this positive data with targeted 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 </li></ul>
    27. 27. Objective: Engage Key Audience <ul><li>Kinaxis - Software Solution </li></ul><ul><li>Goals </li></ul><ul><li>Double web traffic. </li></ul><ul><li>Double conversions (leads). </li></ul><ul><li>Foster a greater awareness of the company’s supply-chain management solutions. </li></ul><ul><li>Strategy </li></ul><ul><li>Find online audience, Get involved in key online locations. </li></ul><ul><li>Drive interest from there to the Kinaxis Web properties by adding value through the creation of a highly engaging, content-rich “home” for supply chain experts. </li></ul>
    28. 28. Kinaxis Social Media ROI <ul><li>Kinaxis </li></ul><ul><li>Results of Social Media Marketing and ROI </li></ul><ul><li>2.7X increase in traffic to Kinaxis.com </li></ul><ul><li>3.2X increase in conversions (leads) </li></ul><ul><li>6X increase in registered community members </li></ul><ul><li>Over 2,300 registered members (35% increase since Jan. 2010) </li></ul>
    29. 29. Major Movie Studio Social Media ROI <ul><li>Objective-predict opening weekend revenue </li></ul><ul><li>12 months before new movie released began traditional and social media promotions for new movie </li></ul><ul><li>During that 12 month time period measured the volume of online chatter, website traffic and statistics, and sentiment </li></ul><ul><li>On the opening night of the movie listened to online chatter-how much, where, about whom, positive or negative, website traffic and statistics </li></ul>
    30. 30. Major Movie Studio Social Media ROI <ul><li>Gain -ability to adjust promotions to increase revenue and developed a matrix to determine how long to keep the movies in the theater across the country based on social metrics as well as sales data </li></ul><ul><li>Costs- monitoring tool, website metrics tool, staff time to develop campaigns and evaluate the data </li></ul><ul><li>ROI – Increase in net profit per movie of 5-7% </li></ul>
    31. 31. Social Media Marketing & Flowers <ul><li>Traditional marketing = Buying plastic flowers.  </li></ul><ul><li>  </li></ul><ul><li>You buy them, put them in a vase, </li></ul><ul><li>and forget about them. </li></ul><ul><li>It's easy, but they have no scent and </li></ul><ul><li>they don’t make people happy </li></ul><ul><li>the way real flowers do. </li></ul><ul><li>  </li></ul><ul><li>Social media marketing = Growing your own flowers.  </li></ul><ul><li>Plant the seeds, tend the soil, compost to make it rich, pull the weeds, harvest the fruit as it ripens </li></ul><ul><li>It's a lot of work, and you don't have complete control of the outcome, but the result is rich: Great opportunities. </li></ul><ul><li>  </li></ul>

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