digital marketing and roi - colorado bma

HDC / Making the world more active.

©Copyright Hanson Dodge Creative. All Rights Reserved. 1

Thursday, February 16, 2012


©Copyright Hanson Dodge Creative. All Rights Reserved.

Digital Marketing & ROI1




•Defining ROI•Define objectives•Measure them•Case studies•Tools•Q&A

Overview

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Defining ROI

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•# Fans•# ReTweets•Total Impressions•Ad equivalency calculations•# Post views, clicks, likes, comments or burps

•These are key METRICS. But they are not ROI.

What ROI is NOT

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What did you invest?

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What did you get in return?

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What will your answer be?

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We don’t work in a vacuum

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Purchase decisions are complex

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Decision funnel (old)

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Awareness Considera-on Preference Ac-on Loyalty




Decision funnel (new)

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Defining Objectives

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What’s the point?

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What are you trying to do? How will you

measure it?

You can’t do everything. Focus. !

How will you know if you succeeded?!




Augie RayForrester Research




Definingyour objectives

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Augie RayForrester Research




Financial objectives

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Revenue

Cost




•Increased product sales•Increased ancillary service sales

Increase Revenue

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•Reduction in customer acquisition cost•Reduction in customer service cost•Reduction in cost to innovate•Reduction in returns

Decrease costs

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•Awareness•Sentiment•Word of mouth•Loyalty•Recruitment / Talent retention

Brand objectives

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•Reduction in exposure to risk•Improvement in response effectiveness•Speed of response

Risk management objectives

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•Enhanced owned and earned assets•Search / findability

Digital objectives

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Measurement

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What’s everyone else measuring?

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What’s most important?

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•PR / Advertising model•CLV (Customer Lifetime Value)•SEO model•Customer service / satisfaction

Measurement models

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•Identify / agree on key success metrics for this objective•Establish baseline levels•Track change•Ensure comprehensive measurement from all available data points

Pick an objective. Measure it.

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“Can we literally sell our product or service via social media

channels?”Objective: Sell more product /service

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YES! NO!

Integrate purchase functionality into your social channels: F-Commerce module, mobile storefront application, tracking codes, e-commerce, cookies, etc.

Maybe your budget or technology does not allow.

So what CAN you do to influence purchasing behavior?Measure sales volume and

calculate ROI based on cost to sell.




•Define success: sum of parts = whole•Let’s pick “Increase Product Awareness”•What data points would indicate success on this objective?

Identify success metrics

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•Define success: sum of parts = whole•Let’s pick “Increase Product Awareness”•What data points would indicate success on this objective?

Identify success metrics

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✓Shares of product assets (images, video, etc.)✓Online customer reviews of product✓Traffic to product information page✓Social comments, likes about product✓Product mentions in third party media




•What were the baselines before digital initiatives?

•Have there been other additions to the marketing mix?

•What other factors could contribute to potential increases or decreases?

Measure it

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CLV = GC x (r________

1 + d - r)




GC: Gross contribution per customerr: annual retention rate (as a percentage)d: Discount rate, or cost of capital for the future value of a customer. Often roughly estimated w/ current interest rate.

*This equation is a good estimate but doesn’t take into consideration costs to maintain a customer and assumes constant values for each variable. More complex CLV equations are required.

CLV: Customer Lifetime Value

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CLV = GC x (r________

1 + d - r)




CLV = GC x (r________

1 + d - r)




GC = $50 per widgetr = 80%d = 2.75%Then CLV = $175.82

You spent $100,000 to acquire 2,500 new customers through traditional channels.Cost per acquisition = $40Customer acquisition ROI =

($175.82 - $40)/$40 = 339.5%


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CLV = GC x (r________

1 + d - r)




CLV = GC x (r________

1 + d - r)




GC = $50 per widgetr = 80%d = 2.75%Then CLV = $175.82

You spent $75,000 to acquire 2,500 new customers through social media channels.Cost per acquisition = $30Customer acquisition ROI =

(175.82 – 30)/30 = 486.1%


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CLV = GC x (r________

1 + d - r)




Simple calculation

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(Sales – Investment) ÷ Investment = %ROI

Sales = $ sold via that channel or due to that channelInvestment = all $ costs related to acquiring the sale: development + design of platform, time to manage or staff it, maintenance costs, advertising to drive awareness of channel, etc.

Simple calculation

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Complex calculation

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(Revenue – Investment) ÷ Investment = %ROI

Revenue = $ attributed to sales from leads through or assisted by digital initiativesInvestment = all $ costs related to acquiring the sale: assign relevant costs to each level of lead nurturing required to close sale. Must include additional marketing, CRM, proposal development, presentation time, customer service activities, etc.

Complex calculation

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Case Studies

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• Used Helpstream (defunct) as CS portal• Before: 1 rep to 55 customers, 77% satisfaction rating• After: 1 rep to 172 customers, 87% satisfaction rating• Cost reduction: $millions• Satisfaction rating: up 13%

Customer service

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•Comprehensive launch program for a new router

-Second Life-3D gaming-YouTube-Video conference-Mobile datasheet

Cisco social product launch

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-Facebook -Social news releases-Blog-Tech Community




• 9,000 people attended virtually = 90x more attendees than in the past• Saved 42,000 gallons of gas• 300% more media coverage than traditional outreach methods• More than 1,000 blog posts and 40 million online impressions• 1/6 the cost of a traditional launch• Saved $100,000

Launch costs

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Brand awareness

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Objective: Increase brand awareness for Wilson Basketball and its NCAA Tournament affiliation

Success Metrics:ImpressionsEngagementCommunity GrowthConversion to website




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Visits to Wilson.com/Basketball (all traffic 2011 vs. 2010)

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Brand awareness

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Success Metrics:ImpressionsEngagementCommunity GrowthConversion to website

Outcomes: -50 million Facebook Impressions in 24 days.-Product page website traffic up 44% over previous month and 77% over March 2010.-Facebook became #2 source of all traffic to Wilson.com/Basketball, after Wilson.com-Community grew from 0 to 23,200 in 24 days.-Feedback avg of .45% outpaced Facebook average .29% by 150%

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Visits to Wilson.com/Basketball (all traffic 2011 vs. 2010)

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Tools

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Aggregated metrics

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• Most tools make gathering and processing easier• Some include distribution• Some include analysis• Some make pretty pictures• They (nearly) all cost money




Want vs. need

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• Search / Aggregate mentions• Moderate conversation• Schedule / Publish content• Engagement management• Measure / Analyze• Language / Translation• Gamification / sweepstakes tools• Pricing model




Want vs. need

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Want vs. need

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No one-button solution

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Constant change

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10 Metrics to watch

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1.Leads generated




10 Metrics to watch

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1.Leads generated2.Website bounce rate




10 Metrics to watch

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1.Leads generated2.Website bounce rate3.Website behavior




10 Metrics to watch

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1.Leads generated2.Website bounce rate3.Website behavior4.Growth of active network / engaged base




10 Metrics to watch

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1.Leads generated2.Website bounce rate3.Website behavior4.Growth of active network / engaged base5.Brand mentions across social platforms




10 Metrics to watch

49

1.Leads generated2.Website bounce rate3.Website behavior4.Growth of active network / engaged base5.Brand mentions across social platforms6.Website visitors and sources of traffic




10 Metrics to watch

49

1.Leads generated2.Website bounce rate3.Website behavior4.Growth of active network / engaged base5.Brand mentions across social platforms6.Website visitors and sources of traffic7.Conversion: subscriptions, email lists, etc.




10 Metrics to watch

49

1.Leads generated2.Website bounce rate3.Website behavior4.Growth of active network / engaged base5.Brand mentions across social platforms6.Website visitors and sources of traffic7.Conversion: subscriptions, email lists, etc. 8.Time spent engaging: apps, time on site, etc.




10 Metrics to watch

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1.Leads generated2.Website bounce rate3.Website behavior4.Growth of active network / engaged base5.Brand mentions across social platforms6.Website visitors and sources of traffic7.Conversion: subscriptions, email lists, etc. 8.Time spent engaging: apps, time on site, etc.9.Engagement ratio: active network / total network




10 Metrics to watch

49

1.Leads generated2.Website bounce rate3.Website behavior4.Growth of active network / engaged base5.Brand mentions across social platforms6.Website visitors and sources of traffic7.Conversion: subscriptions, email lists, etc. 8.Time spent engaging: apps, time on site, etc.9.Engagement ratio: active network / total network10.Viral engagement: sharing, “people talking”




Sara MeaneyHanson Dodge CreativePresident, Strategy & GrowthFebruary 8, [email protected]

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Hanson Dodge Creative is relentless about pushing the boundaries of engagement to deliver integrated solutions that work.

MAKING THE WORLD MORE ACTIVE.™


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