Is it worth it?Social Media & the ROI

Conundrum

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Social media & the C-Suite value debate

Understanding: what SM is and isn’t Integration & the end of business

fiefdoms (aka silos) Measurement approaches

Agenda

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Can you measure what you don’t value?

>70% of Fortune 500 CEOs don’t do social media

Traditional advertising & PR: estimated reach and impressions◦ Tells us nothing about the

customers◦ Relies purely on correlations

What’s the ROI? Right question: why invest?

The why of social media

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Time Legal Safety (except for LinkedIn) Skepticism/trust Proof of financial return on money

spent

C-Suite hesitance

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How Inc 500 execs measure social media success

26% fans, followers and supporters 25% web traffic 16% lead generation 10% reduced cost of customer support 7% value of sales generated through

social media programsSource: Center for Marketing Research, University of Massachusetts.

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Return on Engagement (ROE) Return on Participation (ROP) Return on Listening (ROL) Return on Fluid Listening (ROFL)

A rose by any other name

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Companies communicate/interact

People get relationships, trust, conversation

What is social? Amplifier of existing

business functions Delivers velocity to

marketing processes Empowered WOM

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The integrated approach

Public Relations/

Corp Comms

Marketing

Advertising

Web/ Content

Mktg/SEO

Human Resources

Customer Service

Sales

Customer

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@DellOutlet Twitter Case

2007 2008 2009

Total Rev: $61B

$6.5M 40 SM employees 25K to 1.5M followers

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Social media is not a strategy, it is a communications tool Social media supports existing business goals & objectives Every customer touch point can be enhanced by social media

◦ Public relations/corporate communications/crisis management

◦ Marketing (including email marketing, newsletters, etc.)

◦ Customer service

◦ Human resources

◦ Lead generation/sales

◦ Event planning/management

◦ Market research

◦ Mobile apps

Goals & Objectives Tactics◦ Blogging

◦ Blog comments

◦ LinkedIn Groups & LinkedIn Answers (B2B)

◦ Shares, mentions, retweets

◦ Status updates (Facebook, LinkedIn, Google+)

◦ Alternative platforms (Pinterest, Tumblr, StumbleUpon)

What is your social media strategy?

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To measure, you must establish targets (timeframes)

Social media goal: increase brand awareness, encourage engagement via myriad social platforms, boost sentiment (non-financials) leading to conversion (financial)◦Frequency (more transactions)

◦Reach (more customers)

◦Yield (more transactions per customer)

Requirements

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Value of followers & likes

$225.99 for 50K “100% Top Notch Quality Twitter Followers” in 20 days. $9.99 gets you 900

$590.99 for 100K+ video views

$350 for 25K Fan Page likes

$550 for 10K +1s

$55 for 300 followers

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Social media process

Initiation

Outputs

Inputs

Non-financial

outcomes

Conver$ion

blogs, tweets, shares, updates, videos, comments

listening, tracking, monitoring, data

collection, analysis

likes, shares, RTs, subscribers, mentions, bounce rates, page views, time per page

$ales, repeat $ales

plan development,

KPIs set

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KPI reveals if goal/objective, which lead to specific tactics, achieve specific targets

Visitors/followers are easy (gamed); the “right” visitor is hard

Key Performance Indicators

Website analytics Event registrations

Newsletter subscriptions Likes

Email signups Recommendations

Registration for contests Blog

Poll/surveys completed Blog comments

Shares RSS subscriptions

Retweets Content requests/downloads

Bounce rates Click-throughs

Sales revenue Time on page

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ROI is not projection or estimate. Reasonable case studies relevant

ROI calc: only after investment yields return Establish baseline; monitor deltas/changes & factor

sentiment analysis Incorporate all costs

◦ travel, personnel, training, memberships, consultant fees, conferences, Facebook ads, sponsored tweets, YouTube ads, mobile app dev. Social media is not free.

Correlations are OK. Track non-financial metrics (transactional precursors), i.e. followers, likes, subscriptions. Dotted, not a direct line.

Direct line consideration: isolate tactics & track customers◦ promotional codes, special landing pages, CRM intelligence

Rules of the ROI road

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Calculating Social Media ROI

𝑅𝑂𝐼= ∫𝑓𝑜𝑙𝑙𝑜𝑤𝑒𝑟𝑠 (𝐹 )

𝑚𝑒𝑛𝑡𝑖𝑜𝑛𝑠 (𝑀 )𝑐𝑜𝑛𝑣𝑒𝑟𝑠𝑖𝑜𝑛𝑠 (𝐶 )

sin(𝑡𝐾𝑃𝐼 )𝑑𝑜𝑤𝑛𝑙𝑜𝑎𝑑𝑠(𝐶𝐹 )+$𝑛𝑒𝑡𝑟𝑒𝑣 𝑦2+ ∑

𝑛=𝑖𝑚𝑝𝑟𝑒𝑠𝑠𝑖𝑜𝑛𝑠

∞

(𝑠𝑢𝑏𝑠𝑐𝑟𝑖𝑏𝑒𝑟𝑠𝑛cos 𝑛𝜋 𝑀$𝑏𝑢𝑑𝑔𝑒𝑡

+𝑏𝑛sin𝑛𝜋𝐶

$𝑒𝑥𝑝𝑒𝑛𝑠𝑒 )

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But seriously…

ROI = gain – cost cost

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Your toolbox

Monitoring

Facebook Insights

Google Analytics HootSuite Sprout

SpcialTweetDec

k

Dashboards ($)

Cision Radian6 Spiral16 Sysomos Vocus

Focus Groups

Market Research

Customer Audits

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Example: HMI SalesObjective: Increase sale of HMI licensesTarget: 250 more licenses sold in Q2 in N.A. market

Q2 KPIs Positive company/product mentions in Q2 Net new FB likes, RTs, subscriptions, downloads isolated to HMI

campaign Net new click-throughs of links to website (inbound links) Net new downloads of promoted content (white papers,

backgrounders, marketing) showcasing why additional seats are needed

YouTube HMI promotional video (views) Coupon/discount codes isolated to Q2 campaign issued via

email marketing, tweets, FB updates, inbound website events Actual HMI license sales in Q2

ROI Correlate response with sales via social monitoring tools Comparison metric: HMI licenses sales outside of N.A.

market; comparative sale of other products (baselines. Social media campaign increased perception and

awareness, stimulating a preference and driving customers to a purchasing decision. Conversion.

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Example: Reputation MgtObjective: Reverse disinformation on bailouts & FordTarget: U.S. market, 2009

2009 KPIs Frequent and appropriate engagement with public Counter all blog, Facebook, Twitter, etc. posts including Ford in

federal bailout

ROI: pre and post-sales results Positive financials Analysis showed sentiment

Public relations alone insufficient Integrated corporate approach to crisis management

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1. Social media ROI is a financial calculation. Likes, followers, shares, etc. are non-financial metrics.

2. You must have a business justification for social tactics. Followers, fans, subscribers have no value unless they can be turned into customers.

3. You cannot deliver ROI if you do not have access to digital intelligence and real-time financial data. Calculator + Excel are your new friends.

4. Anything and everything can be measured. Measure what matters; what matters to your company may not matter to mine.

5. If C-Suite demands ROI proof, SM compaign plan starts with business objective(s), targets (timeframe) and KPIs (metrics). No measurement, no ROI.

5 key takeways

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Q & A