roi in social marketing: some metrics. by mahesh murthy of pinstorm

@maheshmurthy

Measuring RoI & effectiveness

in social media marketing

@maheshmurthy

Return On Investment can be said to come from Relevance, Originality, Impact

But that’s not precisely measurable.

Need better metrics.

@maheshmurthy

12 minutes.

12 metrics to live by.

@maheshmurthy

HOW LOW IS YOUR AD-SPEND-TO-REVENUE

RATIO? TO BECOME BIG, SPEND LESS.

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Interbrand’s ‘Top 100 brands 2012’

@maheshmurthy

@maheshmurthy

@maheshmurthy

Interbrand’s ‚Top 100 brands 2012‛

1/3rd seem to have been built without

too much spend on media buying.

@maheshmurthy

This list doesn’t even include Red Bull, Twitter, Ferrari, Facebook. The zero-ad-budget champions.

It’s back to the age of extreme word-of

mouth

@maheshmurthy

Increasingly, in more sectors, the winner has the best word of mouth. And correspondingly, the lowest ad spend.

@maheshmurthy

HOW FAST CAN YOU DIE?

WINNER BRANDS HAVE TO THINK ANTI-FRAGILE.

2

@maheshmurthy

$300m brand, built over 15 years.

@maheshmurthy

$300m brand, built over 15 years. Destroyed in 15 hours.

@maheshmurthy

$50b brand, built over 150 years. Gone in a weekend.

@maheshmurthy

Let’s say a can of Axe deodorant was found with a cockroach in it. And a can of Gillette deodorant too was found with a cockroach in it.

I believe Gillette would be harder affected because

it’s the one making higher claims of greatness.

‚The holier-than-thou, the harder-thy-fall.‛

@maheshmurthy

Let’s say there was a similar service issue (stewardess makes out with passenger on flight) on Singapore Airlines and on Virgin.

I believe Singapore Airlines would be much harder

hit.

‚The holier-than-thou, the harder-thy-fall.‛

@maheshmurthy

Your longevity is increased if you don’t claim perfection. The more risk you embrace in your brand personality, the more resilience to black swans you’ll gain.

@maheshmurthy

WHAT IS YOUR CONTENT-COST-TO-COVERAGE

RATIO?

WINNER BRANDS WILL CUT OUT THE MIDDLEMEN

BETWEEN THEM AND CONSUMERS.

3

@maheshmurthy

Old way: Brand Research firm Strategy firm

Creative agency Media agency Media house

Media property Editorial / Entertainment

Inserted advertising Consumer

Loss of fidelity, efficiency at each level

New way: Brand Editorial / Entertainment Consumer

Minimal loss of fidelity. Max efficiency.

@maheshmurthy

@maheshmurthy

Red Bull had 5x the global search volume of Coca Cola during the stunt. And settled down at a level higher than

Pepsi.

@maheshmurthy

The brand is the entertainment. Media may even pay to cover the brand. No ad film was produced. No media buy was executed. $500m+ worth of publicity on ~$15m worth of investment. 30x

@maheshmurthy

HOW SOON WILL YOUR SOCIAL NETWORK DIE?

WINNER BRANDS WILL BUILD NETWORK-NEUTRAL

PRESENCE.

4

@maheshmurthy

Social networks typically have a lifecycle

@maheshmurthy

@maheshmurthy

When & how brands should participate

Watch

Exploit & grow

Maintain & Consolidate

Prepare to exit & migrate

Wait

Try

@maheshmurthy

Facebook seems to have begun its decline in the US already. It will also die one day. What happens to your investment and fans there? They’re not portable.

@maheshmurthy

Instead of building content on a social network, build it on your site – Use ‚f-connect‛ and other such buttons – and embed it on networks from your site You should own your fans. Not Facebook. Be network-neutral.

@maheshmurthy

WHAT IS YOUR SHARE OF TRAFFIC FROM SOCIAL?

OVER 50%?

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@maheshmurthy

@maheshmurthy

India’s #3 sports site 5m pageviews a month generated socially from 3.5m Facebook fans. At zero media cost

@maheshmurthy

WHAT IS YOUR SHARE OF SALES FROM SOCIAL?

OVER 50%?

6

@maheshmurthy

@maheshmurthy

$1m annual sales. Generated almost exclusively from Facebook. At zero media cost.

@maheshmurthy

HOW SOON BEFORE FACEBOOK BECOMES YAHOO

WITH SMALLER ADS?

AND TAKES ITS VIRAL VISIBILITY TO ZERO?

7

@maheshmurthy

Edge rank: updates reach virtually no one, really.

@maheshmurthy

80%

16%

12%

2012 2013

Typical / max organic visibility of your Facebook update across your fan base

@maheshmurthy

Typically, less than 1% of your fan base actually is shown your update (unless you pay to promote). 99% won’t get it. At best, about 12% of your fan base will get to see it.

@maheshmurthy

Facebook squelched organic ‛free‛ visibility to boost short-term revenues to kick-up stock price. Every time Facebook needs revenues, it’ll damp virality further. When will virality go to zero – and you start comparing Facebook with Yahoo, where visibility is 100% fee-dependent?

@maheshmurthy

WHAT ARE THE ONLY FACEBOOK STATS THAT

MATTER?

VIRALITY AND ENGAGEMENT

8

@maheshmurthy

Out of a boatload of Facebook analytics…

@maheshmurthy

Two really matter – and Facebook doesn’t compute those. But you can: Relative virality: How many non-fans get to organically see updates

divided by total number of fans

i.e. how viral did it go?

Viral attraction: How many non-fans become fans as a result of

seeing updates organically, divided by total number of non-fans who saw the updates.

i.e. how compelling was the virality?

@maheshmurthy

Relative virality – the higher, the better. Aim for 2%+ daily

@maheshmurthy

Viral attraction – the lower, the better. Aim for <50

@maheshmurthy

Then measure engagement

Not as PTAT (people talking about this)

which is a useless number.

@maheshmurthy

Engagement Type Metric Norm

E1: Unprompted Posts / fan base 0.05% | 50

E2: Prompted Comments / fan base 0.5% | 500

E3: Passive Likes / fan base 2.5% | 2500 E4: Referral Shares / fan base 0.5% | 500

@maheshmurthy

And compare against sectoral peers –

also TG peer brands.

Which you can measure externally, with

no account access

@maheshmurthy

@maheshmurthy

HOW DO YOU IDENTIFY AND TRACK INFLUENCERS?

WITH KLOUT, PEER INDEX AND KRED.

9

@maheshmurthy

Pinstorm tracks over 6,000 influencers in India alone everyday, sorted by TGs & topics

http://pinstorm.com/ii

@maheshmurthy

@maheshmurthy

@maheshmurthy

HOW QUICKLY CAN YOU PICK UP BUZZ ABOUT YOUR

BRAND AND DEAL WITH IT?

WITHIN 4 HOURS? 7 DAYS A WEEK?

10

@maheshmurthy

Per brand: 1,000 to 15,000+ social mentions per day 80% outside office hours. Need to work in shifts, 7 days a week.

@maheshmurthy

Quick sorting and data visualisation

@maheshmurthy

@maheshmurthy

@maheshmurthy

@maheshmurthy

Instant client notifications on mobile. SLA of ~4 hours for responses at scale.

@maheshmurthy

@maheshmurthy

WHAT IS THE VALUE OF YOUR SOCIAL BUZZ?

RELATIVE TO YOURSELF?

RELATIVE TO COMPETITION?

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@maheshmurthy

Tracking competitive sentiment

@maheshmurthy

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Positive

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@maheshmurthy

Valuing sentiment

@maheshmurthy

Pinstorm has an SLA for $15m in value of non-negative publicity to be generated through online reputation management for one client.

Value apportioned with equivalent CPM

rate for ad spot in medium, with 1:1

editorial to ad valuation

@maheshmurthy

WHAT ARE YOUR VIDEO VIRALITY AND COST

METRICS?

THIS IS THE NEXT BIG FRONTIER.

12

@maheshmurthy

@maheshmurthy

Over 2.5m views generated on one film alone. TV-competitive cost per view 67:33 mix of paid and organic.

@maheshmurthy

The 100x revolution in production.

@maheshmurthy

@maheshmurthy

@maheshmurthy

Cost of broadcast quality commercials down from US$250,000 to US$2,500. 100x improvement already. True break-even will come at US$25, when the film can make its own cost back thru ads on 10,000 views. So, further 100x improvement needed

@maheshmurthy

12 minutes.

12 metrics to live by.

@maheshmurthy

Thank you! mahesh@pinstorm.com @maheshmurthy