WEBINAR: ROI of Social Media: Myths, Truths and How to Measure

PRESENTS A WEBINAR WITH

Dr. Natalie PetouhoffUCLA Director and Professor of the Social Enterprise Executive Education Courses and A Consultant/Analyst

@drnatalie

ARE YOUR SOCIAL MEDIA EFFORTS WORTH THE MONEY?

Justifying the business case for listening & engaging on social media is a BIG question.

And executives want bottom-line business answers.

BUT IS CALCULATING SOCIAL MEDIA ROI EVEN POSSIBLE?

Would you calculate the ROI of a phone? Would you calculate the ROI of your mom? Would you calculate ROI of your pants?

Skeptics think social media is too “fluffy” to adequately measure return on investment (ROI)

Social Media Myth #1

“Social media ROI cannot be calculated because there are

too many unknowns…”

Social business is still business…

…and the business of business is increasing shareholder value.

TRUTH IS…

WHAT IS ROI? A NUMERICAL VIEW OF STRATEGY

High ROI means executive approval for your initiative.

EnhancedBrand

protection…

BetterConsumer Insights…

Faster lead generation/

increased lead conversion rates

Reaching PRobjectives

faster, better, cheaper…

Increased awareness,

reach, relevance, engagement…

Reduction in call center costs/ increase in

customer revenue

Decrease in customer churn/

inc customer lifetime value

DOES YOUR STRATEGY INCLUDE BUSINESS FUNDAMENTALS LIKE COST SAVINGS & REVENUE GENERATION…

If your strategy includes…

Social media ROI predicts if you’ll reach the goal…

Social Media Myth #2

“Would you calculate the ROI of putting phones on every

desk in your company? smROI doesn’t have to

calculated! ”

Except businesses do…

Evaluate productivity benefits vs. costs. And also the systems needed to support the business activities.

HMMM….

TRUTH IS…

There was a day when… Secretaries answered the phones and typed EVERYTHING for workers.

Along came phone switches and desktop computers…

Someone did ROI calculations for:

Getting a company-wide phone switch and phones on every desk top. (Ask Nortel and Avaya…)

And a computer on every desk.

And apps to get your work done -- like email, word processing programs.

Social Media Myth #3

Metrics = ROI

KNOW WHAT ROI IS AND ISN’T

Many people mistake social media data, metrics and Key Performance Indicators (KPIs) for ROI

Metrics are used to measure: Reach, Relevance, Shares, Likes, Engagement, Purchases

But that’s NOT ROI

COLLECT SOCIAL MEDIA DATA, METRICS & KPIS

Website analytics and marketing automation data help provide insight into what you’re doing right & how you can improve.

TRUTH IS…Metrics are the like ingredients in a good recipe. They go into the ROI calculation,but they aren’t the finished dish.

ROI VS. METRICS

Activity Metrics # of:News ReleasesMedia InterviewsAnalyst BriefingsBlogger EngagementsBlog PostsVideo PostsPodcastsWeb Site Page Edits

Reach Metrics # of:Earned Media PlacementsEarned Media ImpressionsPaid Media ImpressionsNews Release DownloadsAnalyst Report Mentions

Relevance Metrics# of:Key Message PenetrationEarned Media ShareShare of ConversationWord of Mouth VolumeClick-Through Volume / Rate

Return on Investment• Earned Media Value vs. Marketing Spend• Lead Value vs. Marketing Spend• Brand Equity Growth vs. PR Spend• Focus group vs. Social Media Monitoring or Community

ROI IS LIKE LOOKING AT AN ESCHER DRAWING

It’s a complexity issue • Traditional business goals & metrics• Social media business goals and metrics• How social media affects traditional business

ROI = Benefit - Costs x 100 Costs

An equation…1.

Calculate Benefit & Costs.

They are NOT metrics.

2.

THE STEPS FOR Social Media ROI?

And there is an ROI of your mom, a phone and wearing pants

http://www.flowtown.com/blog/what-is-the-roi-of-your-mom

THERE’S AN ROI OF ANYTHING THAT PROVIDES VALUE

WHERE ARE WEWITH RESPECT TO BEING ABLE

TO CALCULATE ROI OF SOCIAL MEDIA?

Most marketers indicate social media measurement is a high priority & 48% feel pressure to report qualified outcomes of social media.

Less than 20% of marketers can calculate the ROI of Social Media

MARKETERS ARE UNSURE HOW TO CALCULATE SOCIAL MEDIA ROI

The first two phases were driven by the Innovators and Early Adopters;they don’t need business cases to adopt something.

WHAT’S SHIFTING THE NEED FOR SOCIAL MEDIA ROI?

Justifying ROI is becoming more important now that we’re in the “third wave” of social media.

Some brands forge new ground by actively making social media part of their cultural DNA.

SOCIAL IS JUST IN SOME BRANDS’ BLOOD

OTHERS WANT PROOF BEFORE THEY TAKE THE LEAP

SOCIAL MEDIA ADOPTION HAPPENED QUICKLY

Companies jumped into social media without extensive ROI calculations

There wasn’t any real business analysis.

It happened because the boss said so, or becausea social media PR disaster could cost much more.

Examples:

ISN’T IT INTERESTING THAT A WHOLE INDUSTRY GREW WITHOUT

CLEAR BUSINESS CASES FOR SOCIAL MEDIA?

THE EARLY MAJORITY ARE

PRAGMATISTSThey need assurances.

They dislike unpredictability. They are hard to win over.

PRAGMATISTS OFTEN BECOME

EVANGELISTS

Get the Early Majority to see what the innovators and Early Adopters saw. Loyal once they become “sold” on an idea.

They influence others through WOM channels, especially the Late Majority

HOW DO WE GET STARTED DOWN THE ROAD OF SOCIAL MEDIA ROI?

ALIGN BUSINESS GOALS WITH SOCIAL MEDIA STRATEGY

To be successful in social, you need to determine why you’re doing it and what strategic objectives you’re trying to reach

HOW DO THOSE GOALS COMPARE TO SOCIAL MEDIA GOALS?

Apply SMART methodology to all business objectives:

Specific

Measurable

Actionable

Realistic

Timed

THE SOCIAL MEDIA ROI EQUATION

A SOCIAL ROI EXAMPLE Sea World San Antonio launched a social media campaign for their new

“Journey to Atlantis” ride:

• Identified top roller coaster enthusiast bloggers and forum participants

• Shared construction videos & photos from start to finish

• Treated them like VIPs, inviting the American Coaster Enthusiasts to be the first to ride the new coaster

THE RESULTING ROI?BENEFIT: Using a survey and formula that applies a value to each visitor to the park, Sea World was able to attribute more than $2.6 million in revenue from people who heard about the ride through the Internet.

COST: The total costs for the campaign, for people, process and technology was $44,000.ROI = 2,600,000 – 44,000 x 100 = 5809% ROI

44,000

For each dollar spent, $58.09 of value was added to the bottom line.

CALCULATING SOCIAL MEDIA ROI IS POSSIBLE!

There isn’t one answer for how & what to measure in social media – the metrics to evaluate your success in social are as unique as your business.

Prove social media efforts are providing value to your organization by taking the plunge and start crunching your own numbers today.

Go forth & measure!

ADDITIONAL ROI RESOURCES Video: How To Build a Business Case for Social Media

http://www.youtube.com/watch?v=_59iJrYanw0&feature=relmfu

Video: How To Calculate the ROI of Social Media

http://www.youtube.com/watch?v=UhUO30VRN1M&feature=relmfu

Video: How Social Media Benefits the Whole Company

http://www.youtube.com/watch?v=e1SfQaMSbH0&feature=relmfu

Ebook: ROI of Social Media: Myths, Truths & How To Measure

http://www.radian6.com/resources/library/roi-of-social-media-myths-truths-and-how-to-measure/

Infographic: ROI: Are Your Social Media Efforts Worth the Money?

http://www.radian6.com/resources/library/roi-of-social-media-infographic/

White paper: Calculating the ROI of Social Media

http://www.salesforce.com/social-crm/?lbt=/form/pdf/socialcustservice_roi.jsp&d=70130000000G5cI&lbh=600&lbw=510

PRESENTS A WEBINAR WITH

Dr. Natalie PetouhoffUCLA Director and Professor of the Social Enterprise Executive Education Courses and A Consultant/Analyst

@drnatalie