SOCIALMEDIA : ROI

Social Media is like teen sex, everyone wants to do it. No one actually knows how. When finally done, there is surprise it's not better.

- Avinash Kaushik: Google's analytics evangelist via Twitter 2009

{ }

• Add Social Media to your existing marketing channels and hope to reach as many people as possible – Wrong!

SOCIAL

MEDIA MAXIMS

• Post, Listen, Reply, Encourage feedback

• Search and Social are integrated

SOCIALMEDIA

THE MODERN ONLINE PRESENCE: SIMPLIFIED

THEWEBSITE

OPTIMISATIONSEARCH ENGINE

The Altimeter Group asked 140 corporate social strategists about their 2011 planning

Policies and Procedures

Resources: Increasing budget/headcount

Getting Tools and Technologies in Place

Developing a Listening/Monitoring Solution

Getting Buy-In from Stakeholders

Applying Social Insights to Product Roadmap

Determining an Organizational Model

Internal Education and Training

Creating ROI Measurements

0.0% 10.0% 20.0% 30.0% 40.0% 50.0%

22.0%

24.6%

26.3%

29.7%

32.2%

34.7%

34.7%

37.3%48.3%

Source: Survey of Corporate Social Strategists, Altimeter Group, November 2010

WHAT IS SOCIAL MEDIA ROI?

‘Social Media ROI is defined as a measure of the efficiency of a social media marketing campaign’- DAG HOLMBOE, 2011

MILLION DOLLAR QUESTION*

*(AND WHY SHOULD WE MEASURE IT?)

WHAT IS THE ROI OF SOCIAL MEDIA ?

THE

…

1 Compare the efficiency of marketing campaigns;

Negotiate budgets with your management; 2

Analyze and optimize current and future campaigns;

3

WHY SHOULD WE MEASURE IT?

Financial accountability - as social media becomes mainstream, executives are holding them to the same accountability as other business initiatives, demanding financial returns and ROI on social media investments.

4

THE FINANCIAL ORIGINS OF

ROI

ROI = (return – investment) % investment

Social Media ROI =

(SM return – SM investment) % SM investment

LET’SADAPT IT

A WORKING EXAMPLE

Last month, we attributed R50,000 in sales to our social media campaign. This is our ‘social media return’. Let’s assume that our investment in our social media campaign was R10,000.

Using the ROI formula: Social media ROI = (R50,000 – R10,000) / R10,000 % = 400%

SOCIAL MEDIA

RETURN?• Sales

• Customer Insights

• Net New Customers

• Brand Awareness

• Etc…

• *Not Likes

• *Not Followers

SOCIAL MEDIA RETURN IS THE VALUE THAT YOU DERIVE FROM YOUR SOCIAL MEDIA CAMPAIGN

QUANTIFYING SM RETURN

• Sales

• Net New Customers

HOW DO WE QUANTIFY A RETURN ON THE QUALITATIVE?

• Brand Awareness

• Customer InsightsVS

{ }SM IS A MEANS TO AN END

“We often approach social media like it’s the destination rather than the vehicle”

- Hal Thomas

A ‘like’ or a ‘follower’ can be compared to a business card handed out at an event. It represents potential, but needs to be acted on.

SOCIALMEDIAROI

APPROACHING

BEFORE

TAKE A

SNAPSHOT

YOU START

THE SNAPSHOT (BENCHMARKING)

• Before you start the clock it is a good idea to benchmark where you’re at...

• Make a note of the numbers (number of Facebook fans, Twitter followers, referrals from social media sites, plus existing website traffic).

• Make a note of the less obvious benchmarks (such as SEO rankings and referrals, customer satisfaction scores and other business data). 

• Make a note of ROI benchmarks. How much are you paying to acquire customers via other marketing channels? How vast is that advertising budget, and how is it being split up? And what proportion is being directed into channels that you cannot accurately measure?

UNDERSTAND THE VALUE

OF YOUR CAMPAIGN

2QUANTITATIVE

• Sales, unique visits, page views, followers, demographics, age, bounce rate, length of visit, etc…

QUALITATIVE

• Metrics that have an emotional component to them. For example, if 75% of the people who mention your product online call it “cheap” and only 25% call it “inexpensive,” that’s a qualitative metric that has an impact on your business.

TYPES OF SM ROI MEASUREMENT

ESTIMATING SOCIAL MEDIA RETURN

HARD NUMBERS ARE NOT ALWAYS AVAILABLE HOW DO WE MEASURE RETURN?

Finally, define how you will tie hard Rands to the social media return.

THREE STEPS:

2.1.Define your social media goal.

Based on the goal, define your social media return.

3.

SOCIAL MEDIA ROI ON SALES

THREE STEPS:

1. Define the Goal: We want to increase sales.

2. Define the Sales that can be attributed to the Social Media campaign (Social Media Return)

3. What is the Rand value of those sales?

• ANALYTICS

• CAMPAIGN ONLY COUPON CODES

• FORECASTED VS. ACTUAL SALES FOR THE PERIOD

ATTRIBUTING SALES

THREE STEPS:

1. Define the goal: Generate a high number of high-quality consumer insights from the social media campaign.

2. Define the social media return as the value of these consumer insights

3. Tie in hard Rands to the return by comparing what it would cost to generate the same quantity and quality of consumer insights using a focus group.

SOCIAL MEDIA ROI ON CONSUMER INSIGHTS

WE COMPARE…

We use consumer insights equivalency.

Traditional Focus group cost: R5000No. consumer insights generated: 20Ave Cost per consumer insight: R250

Count all consumer insights determined to be of equal or higher quality as the consumer insights from a focus group.

Social media ROI =

(consumer insights x R250 – cost of SM campaign) cost of SM campaign

= ROI %

HOW DO WE ATTACH A RAND VALUE TO CONSUMER INSIGHTS

WE COMPARE AGAIN…

1. DEFINE THE GOAL

2. DEFINE THE SM RETURN

3. TIE IN A HARD RAND VALUE

ALL SUPPORT CENTRES KNOW THE COST OF A SUPPORT CALL

Social media ROI =

(Support calls x Ave cost p/call – cost of SM campaign) cost of SM campaign

= ROI %

HOW DO WE ATTACH A RAND VALUE TO CUSTOMER SUPPORT CALLS

• Forecast the number of calls without social media with historical data.

• Over the period, the number of prevented support calls is the difference between forecasted and actual support calls. This is the social media return.

HOW DO WE ATTACH A RAND VALUE TO CUSTOMER SUPPORT CALLS WITHOUT A

HARD RAND VALUE

CUSTOMER LIFETIME VALUE

• Customer Lifetime Value (CLV) is the amount of revenue a customer will bring to a company over the course of their lifetime with the brand.

• Eg. If you are an Internet Service Provider (ISP), and you know that the average customer stays with you for 3 years and spends R300 p/month. The CLV is R300 x 12 x 3 = R10 800.

EXPLANATION AND CALCULATION

• How much are you willing to spend to acquire that customer?

• 10% of CLV?

• If CLV is R10 800 then the company is willing to spend R1080 to acquire a customer.

• So with a budget of R500 000, 463 customers should be acquired, bringing in roughly R10,000 000 over the next 3 years.

THE USE OF CLV

• The companies current marketing budget is R3,000 000 p/annum.

• From current print and online advertising 2 500 new customers are acquired each year.

• So for every R1200 spent, the company gets 1 x new customer.

• Let’s allocate 10% of the annual marketing budget to social media (R300,000)

• To allocate budget to Social Media (away from traditional media), 250+ new customers need to be generated from social media.

APPLICATION AND CALCULATION

CALCULATIONS

TRADITIONAL SOCIAL MEDIA

ROI = SM return – investment % investment

ROI = SM return – investment % investment

Budget = R3,000 000Value of a Customer = R10 800CLV Spend = 11%Customer acquisition cost = R1 200Customers acquired = 2500

Budget = R300 000Value of a Customer = R10 800CLV Spend = 10%Customer acquisition cost= R1 080Customers acquired = 277.77

ROI = 27,000 000 – 3,000 000 % 3,000 000

ROI = 3,000 000 – 300 000 % 300 000

ROI = 800% ROI = 900%

• Raise awareness of a recently launched practice.

Source: Techcrunch - 2010/07/17

CASE STUDY: DENTISTRY PRACTICE

• TOOLS: Facebook, Youtube, Twitter, Groupon

• PROBLEM: A new practice in a building that houses hundreds of other dentists that have more established practices.

• SOLUTION: 70 facebook fans (@ publication on Techcrunch, July 2010), posting Yelp reviews on the page, posting educational dentistry clips on Youtube, a Groupon deal for patient exam and x-ray that attracted 320 new patients!

CASE STUDY: DENTISTRY PRACTICE

Facebook as

AT NOV 2011

LANDING PAGE

CASE STUDY: DENTISTRY PRACTICE

CASE STUDY: DENTISTRY PRACTICE

Facebook as

AT NOV 2011REVIEWS PAGE

CASE STUDY: LOCNVILLE

CASE STUDY: LOCNVILLE

SOCIAL AND SEARCH

• Both Google and Bing have confirmed that their search results are positively affected by social signals, such as tweets, Facebook Like and +1’s

• Google is king because it’s algorithm measured which websites were “voting” for others by linking to them.

• Enter social media, and search engines have taken what people are saying about brands and companies to heart. If people share your content, it’s probably pretty good.

THE LANDING PAGE

• A/B Split Testing

• Call to Action

GREAT TOOLS

GOOGLE ANALYTICS

• ITS FREE, IT IS A MUST FOR ANY WEBSITE/SOCIAL MEDIA CAMPAIGN

HOOTSUITE

• BASIC REPORTS FOR FREE; $5.99 FOR A PRO SUBSCRIPTION.

• ACCESS TO (INSERT TABLE)

SOCIAL MENTION

• http://www.socialmention.com/

TAKE AWAYSCONCEPTS

Social Media ReturnSocial Media ROICustomer Lifetime ValueBenchmarking

PROCESSES

Continuous Improvement (Kaizen)Compare Compare Compare(A/B Split Testing, for landing pages)

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