Olivier Blanchard Basics Of Social Media Roi

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The what, why and how of Social Media ROI: Business definitions, methodologies and situational narrative. This presentation's purpose is to clarify what ROI is and isn't within the context of Social Media and offers a basic explanation of how to tie Social Media activities to real ROI.

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Olivier Blanchard Basics Of Social Media Roi

  1. Enough with<br />the Social Media BS.<br />Give me the realz.<br />Social Fresh Conference // 24 August 2009<br />
  2. SOCIAL MEDIA IS NOT FREE.<br />
  3. 1. It takes people.<br />
  4. 2. It takes technology.<br />
  5. 3. It takes time.<br />
  6. We have… rocks.<br />… all of which are limited resources.<br />
  7. These resources<br />=<br />100%<br />of your budget<br />E-Marketing<br />Each resource<br />has a specific cost<br />Head Count<br />Advertising<br />I.T.<br />Inbound Call Center<br />Each resource<br />yields specific results<br />Marketing<br />Sales Dept.<br />Accounting<br />Public Relations<br />
  8. These resources<br />generate<br />100%<br />of your business<br />E-Marketing<br />Losing even 1% <br />of your budget’s efficiency <br />could seriously ruin <br />your day.<br />Head Count<br />Advertising<br />I.T.<br />Inbound Call Center<br />Marketing<br />Sales Dept.<br />Accounting<br />Public Relations<br />
  9. Okay fine. But if<br /> I’m going to take a chance<br />on this social media thing,<br />it had better make good business<br />sense! Why should I allocate<br />resources to it?<br />
  10. Reason #1:<br />It will result in a cost reduction.<br />Maybe in customer service?<br />You mentioned something about<br />business intelligence and<br />market research?<br />Reason #2:<br />It will generate more revenue.<br />I want more transactions, <br />more net new customers,<br />more customer loyalty,<br />etc.<br />
  11. Now go figure out what<br />Program you have to cut<br />to fund this Social Media thing.<br />Remember that our bonuses<br />are on the line.<br />
  12. Understand that a new<br />Social Media program’s<br />funding doesn’t appear<br />out of thin air.:<br />Which buckets do we empty<br />to fill this new one?<br />
  13. SAY HELLO TO:<br />Business Justification<br />R.O.I.<br />
  14. R.O.I.<br />RETURN<br />ON<br />INVESTMENT<br />
  15. THE R.O.I. EQUATION<br />Investment<br />Expectation of return<br />
  16. THE R.O.I. EQUATION<br />(GAIN FROM INVESTMENT - COST OF INVESTMENT)<br />ROI =<br />COST OF INVESTMENT<br />
  17. Truth about R.O.I.<br />ROI is a business metric,<br /> not a media metric.<br />ROI is 100% media-agnostic.<br />Only measuring digital or social won’t get you anywhere.<br />
  18. Reason #1:<br />COST REDUCTION<br />Reason #2:<br />REVENUE GENERATION<br />Remember what Mr. Bossman said…<br />
  19. I shrank my PR budget by 20%<br />and my outbound call budget by 40%.<br />Now I can afford a team of social media<br />Rock stars. Can I get a hellz yeah?<br />Okay, hotshot,<br />You have your Social Media doohickey.<br />Now I’d better see some real results!<br />Or else… <br />
  20. Woohoo!<br />I have a job!!!<br />
  21. Dudes, we are <br />ON THIS!!!<br />Let’s start engagin’!!!<br />I call dibs on the<br />Corporate blog.<br />
  22. Cool.<br />ACCOUNTING<br />One Month Later…<br />
  23. What about our<br />Twitternets?<br />Oh my! Look at all the new<br />visitors to our website!<br />and all of our FaceBook friends!<br />Hot Damn, we even have <br />comments on the blog!<br />
  24. This rocks!<br />I never had it so<br />good!!!<br />
  25. Cool.<br />ACCOUNTING<br />Three Months Later…<br />
  26. Yeah but…<br />What about<br />the P&L?<br />Monitoring to base…<br />Monitoring to base…<br />Our Google Analytics are through<br />the roof! Even our social mentions<br />are wicked good!<br />We have liftoff!<br />
  27. Measuring media<br />really rocks my<br />world. <br />
  28. Nope.<br />Anything?<br />Nada.<br />ACCOUNTING<br />Six Months Later…<br />
  29. What kind of mood is <br />The old man in today?<br />Not good.<br />He doesn’t care how many visitors<br />the website gets, or how many<br />eyeballs we estimate we’ve reached unless it means we’re selling<br />more stuff.<br />
  30. But why?<br />Our website is getting <br />mad hits, Jack!<br />And we have 3,000 followers<br />on Twitter now!<br />I’m sorry, son.<br />If your Social Media program<br />is generating revenue, we aren’t<br />seeing it. We need to allocate <br />resources where we can<br />make money.<br />It’s just business.<br />
  31. Darn it.<br />This media measurement<br />stuff isn’t working.<br />We need to start<br />tying this stuff to actual<br />Business performance.<br />Where to start?<br />Let’s see…<br />At the beginning?<br />
  32. Things happen in sequence.<br />
  33. Non-financial impact is not ROI (yet).<br />
  34. Types of non-financial impact<br />Customer complaints<br />Website Visitors<br />Impressions<br />Positive press<br />Click-throughs<br />YouTube views<br />Retweets<br />Coupons distributed<br />Visitors to a brick & mortar store<br />Positive WOM<br />Delivered emails<br />Negative press<br />Negative WOM<br />Employment applications<br />Blog comments<br />FaceBook friends<br />Social mention<br />Twitter followers<br />
  35. Non-financial impact = potential.<br />
  36. ROI = actualized potential.<br />
  37. Reason #1:<br />COST REDUCTION<br />Reason #2:<br />REVENUE GENERATION<br />Remember what Mr. Bossman said…<br />
  38. I need proof that<br />what we’re doing<br />is actually working.<br />Start with proof of concept.<br />
  39. Step 1: Establish a baseline<br />8% YoY Growth<br />
  40. Baselines illustrate deltas (changes)<br />Is something happening here?<br />
  41. Step 2: Create Activity Timelines<br />
  42. Step 2: Create Activity Timelines<br />
  43. Step 2: Create Activity Timelines<br />
  44. Step 3: Look at Sales Revenue<br />
  45. Step 3: Also look at # of transactions<br />
  46. Step 3: Also measure net new customers<br />
  47. Transaction data should be specific<br />F.R.Y.<br />FREQUENCY, REACH, YIELD<br />How often customers transact. (transactions per month)<br />How many customers you are reaching. (net new customers)<br />How much they spend. ($ per transaction)<br />
  48. The latest numbers indicate<br />that our YoY sales $ are up 60%.<br />Our individual transactions have doubled,<br />as have our transacting customers.<br />Something’s working! <br />Groovy!<br />Let’s figure out what.<br />
  49. Step 4: Measure transactional precursors<br />
  50. Step 4: Measure transactional precursors<br />
  51. Step 4: Measure transactional precursors<br />
  52. We overlaid all of our timelines<br />and noticed that since our social media<br />activities began, our website visits are up,<br />our social mentions are also up, and<br />everyone seems to love us. <br />So is there a<br /> discernable pattern<br />in this?<br />
  53. Step 5: Overlay all timelines<br />activities<br />social data<br />web data<br />transactions<br />loyalty metrics<br />etc.<br />
  54. Step 6: Look for patterns<br />Impact<br />Uncertain Impact<br />Impact<br />Impact<br />No Impact<br />Before<br />After<br />
  55. Step 7: Prove relationships<br />How was this group<br />Touched by SM?<br />Before<br />After<br />
  56. How long<br />will all this<br />analysis take?<br />It’s all a process<br />of elimination, really.<br />Isolating patterns, <br />quantifying deltas,<br />proving ad-hocs…<br />Then all<br />we have to do is<br />figure out what the cost <br />savings and revenue gains<br />are, and plug them <br />into the equation.<br />
  57. THE R.O.I. EQUATION<br />(GAIN FROM INVESTMENT - COST OF INVESTMENT)<br />ROI =<br />COST OF INVESTMENT<br />
  58. THE R.O.I. EQUATION<br />Investment<br />Expectation of return<br />
  59. Oh wow.<br />This R.O.I. thing<br />wasn’t at all about<br />measuring media,<br />impressions and<br />eyeballs!<br />
  60. All things remaining the same…<br />We may have <br />proof of<br />concept.<br />Hot damn!<br />ACCOUNTING<br />First things first: Prove that Social Media works<br />
  61. So it turns out that our <br />Social Media program is impacting<br />every aspect of our business except<br />traffic in our brick and mortar stores.<br />Can you get on that? Yeah. We need<br />to find out why we aren’t having<br />an effect there. Kthxbye. <br />Then use what you know to make it work better.<br />
  62. More store traffic.<br />Roger that.<br />Dudes, we are <br />ON THIS!!!<br />Let’s start engagin’!!!<br />I’ll start crafting some<br />wicked blog posts.<br />
  63. Finally, someone with some<br />real metrics for me to sink my teeth into!<br />Good job, Sparky! You done gewd!<br />
  64. So I guess Social Media<br />is going to stick around a little while<br />longer after all, isn’t it?<br />Yessir.<br />Looks like our budget<br />is safe for now.<br />
  65. Drinks for <br />Everybody!<br />
  66. Olivier Blanchard<br />Principal, BrandBuilder Marketing<br />864.630.7398<br />www.thebrandbuildermarketing.com<br />@thebrandbuilder(on Twitter)<br />www.smroi.net<br />
  67. Slideography<br />Slide # Source<br />3, 9, 10, 11, 18-31, <br />37, 38, 48, 52, 56,<br />59-65<br />4<br />6<br />UFO (TV series) <br />http://ufoseries.com/<br />http://www.minnpost.com/stories/2008/06/18/2282/this_doesnt_compute_as_more_women_enter_scientific_fields_their_numbers_in_computer_science_are_declining<br />Kim Jong Il puppet, from “Team America”<br />http://blogs.rockymountainnews.com/bridget/kimjongil.jpg<br />

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