Measuring Social Media: Where’s the

ROI?

Tracy Panko@TracyPanko

@spiral16

Social Media is a Game Changer It gives people a voice.

Social media is radically changing cultures all over the world.

*Egypt revolution, TedNguyenUSA.com

The Ability to Share Experiences Isn’t Going

Away• An average of 900,000 blog

posts a day

• 4-6 million tweets an hour on average

• Over 30 billion pieces of content (videos, notes, status updates, pages) shared on Facebook in a month

* AIGA.org

Social Media is Transforming Business Culture & Methodology

“In the future, there will be two types of companies: Those that are agile and adapt to consumers’ changing business behavior …and those that go out of business.”

Of the 500 original companies listed on Standard & Poor’s 500 in 1957, only 17% remained in 2007. - Forrester research, CMO Mandate: Adapt or Perish

Active Brand Marketing“This is the approach that marketers must

take to avoid extinction and thrive in the digital age.”

Active brand marketing - A flexible approach in which marketers respond quickly to their environment to align consumer and brand goals and maximize return on equity.

- Forrester research, CMO Mandate: Adapt or Perish

Adapting is a Challenge …64% of marketers experienced problems trying to

implement digital marketing initiatives. Only 4% of marketing leaders feel that they are

prepared to exploit digital marketing opportunities.

- Accenture Interactive 2010 study

…but it’s also a huge opportunity.

Photo credit: stasisconsulting.com

Build Relationships and Develop Trust with Your

Customers

• People want to participate in conversation. • People want to be part of a community.• People don’t want to be marketed or broadcast to.

Photo credit:www.flickr.com/photos/sadaiche/

Start With What You Know

You’ve identified your

company’s business goals already.

Now think about how you can achieve those goals through a

social media program

Company goals Social media campaign Success

Social Media Progam is a Component,

Use it to support your existing business strategy.

• Create a structure for your program based on the unique needs of your company.

• Build it from the ground up.

• The more customized, the better.

Social Media Isn’t Free.

It takes valuable time.

You need human resources for:

PlanningCreative insight Content creationProduct managementMeasurement Monitoring…and more.

Why Social Media ROI is Tough

ROI = (Gain from Investment) - (Cost of Investment)                     Cost of Investment                                    

 

Return on investment is a financial metric.  That financial aspect is not clearly defined in social media—it’s not built-in.

But This Challenge Isn’t New

                                    

 

Calculating ROI for print ads and radio ads has always been difficult.

Metrics relies on the people influenced by print and radio self-identifying themselves or coupon codes being recorded and collected.  Calculating ROI for social media is also difficult because it is integrated into your overall strategy—it is hard to separate.

There is no way to calculate social media ROI

with a one-size-fits-all equation.

                                    

 

Image from glynndevins.com -- and modified

6 Steps To An Effective Social Media Campaign

                                    

 

1. Identify business goals.2. Align goals with social media program.3. Establish benchmarks.4. Set realistic targets.5. Measure KPIs to determine success.6. Look at results, find ways to improve.

1. Identify Business Goals

Make sure your social media initiatives (nonfinancial) are supporting your business goals (financial)

                                    

 

Think about this:

Where is the company now?Where does it want to be?What will it take to get there?

What Do You Hope to Gain? Increase Total Sales

Reduce Customer Service Expenses

Acquire New Customers

Reduced Cost Per Transaction

Increase in Qualified Leads

Higher Value Per Sale

Increase in Customer Satisfaction

Increase in Reach

Introduce New Products/Service Enhancements

Attract New Employees

Encourage Repeat Purchases/Build Customer Loyalty

 

2. Align Social Media Program with Goals

 

Avon tinkered with its well-known door-to-door and catalog-based direct sales model by empowering its salespeople with social selling tools like its Facebook eBoutique and iPhone app.

Social media platform Avon Connects virtually attaches consumers to their local Avon rep, at which pointtraditional face-to-faceservice begins.

Tools Are Not Strategies 

 

 

  

• Twitter• Facebook/MySpace• Blogs • Forums• YouTube• Foursquare/Gowalla• Flickr• Webinars• Podcasts

Being active on these platforms is only important if using them helps you reach your goal.

Listening GoalsWho is saying what, when, and where?

 

 

 

  

• Protect your reputation• Facilitate customer support• Invite innovation• Build trust• Market through conversation (promote and sell)• Gather business intelligence

- Jason Falls, Social Media Explorer

Measurement GoalsWhat are you getting out of it?

 

 

 

  

• Improve branding and awareness • Protect and improve reputation• Build community or advocacy • Increase customer satisfaction• Harvest research & development• Drive sales or leads

- - Jason Falls, Social Media Explorer

3. Establish Benchmarks 

 

 

  

What does your online presence look like before the program?

There are numerous free and paid tools to determine this:

• Free monitoring solutions – Google Alerts, Twitter Search, Social Mention, PeopleBrowsr, IceRocket

• Paid monitoring solutions – Lithium, Radian6, Sysomos, Trackur

• Online listening & research solutions – Spiral16, Crimson Hexagon, Cymfony, ConsumerBase

• Influencer tools – Alltop, Klout, mBlast, Postrank

Common Metrics 

 

 

  

Frequency and volume of:• Twitter followers• Retweets• Facebook likes• Brand mentions • Blog comments• YouTube views• Number of check-ins

Are these things important?

Ask yourself which ones matter to your business.

Advanced Metrics 

 

 

  

• Volume of brand mentions• Share of voice

Advanced Metrics 

 

 

  

• Positive/negative sentiment ratios• Positive/negative volume over time, correlation

Advanced Metrics 

 

 

  

• Penetration of marketing keywords• Create custom data sets to discover trends

Advanced Metrics 

 

 

  

• Identify influencers in your topic or around your brand• Discover how brand messages spread across the Web

Advanced Metrics 

 

 

  

• Learn what types of sites are the most relevant

4. Set Realistic Targets 

 

 

  

Social media campaigns can be some of the least expensive ways to grow sales and awareness.

Set specific targets based on your company goals:

Increase total sales by 5%

Increase cost savings by 15%

10% increase in qualified leads

Convert 5% followers and “likes” to transacting customers

Grow online community to 10,000 members

20% increase in customer satisfaction

Increase total transactions by 7%

5. Measure KPIs to Determine Success

Look only at the metrics that concern your goal.

 

 

 

  

• Website metrics/traffic• Social audience metrics • Fans/Followers/Friends • Conversions • User-generated content • Comments • Ratings/Reviews • Downloads

• Volume of conversation• Search metrics• Sentiment & tone • Backlinks• Competition comparison• Share metrics • Referrals • Click throughs

- Jason Falls, Social Media Explorer

Correlate Traditional with Online Metrics

• Actual sales• Retail traffic• # of transactions• New customers• Amount per transaction• Leads• Surveys

- Social Media ROI, Olivier Blanchard

This process requires detective work.

It isn’t always obvious.

Patterns reveal themselves as you sort and filter results.

Put Results on a Timeline• Did you see spikes in sales in correlation with your

social media efforts?

• What other patterns can you identify?

Measuring Social Media Programs Can Find Real

Savings

 

 

 

  

In 2009, Ford built early awareness for the Fiesta with influential bloggers who tested and wrote about it

In 2010, Ford launched the Fiesta Project, an effort to capture user-generated video.

As a result, Ford learned it could reduce cost of subsequent launches by as much as 90%.

- Forrester research, CMO Mandate: Adapt or Perish

6. Look at Results, Find Ways to Improve

 

 

 

  

The great thing about web measurement is …

You don’t have to wait for all your results.

They update as the program continues.

And you have every opportunity to view those results and make changes to your program along the way.

It’s Not Always DifficultSometimes just being able to illustrate that you have the ability to create business gains through social media is enough …

…to reach your goal.

Conclusions• Goal: Understand that social media

represents a new set of measurements that can be correlated with your traditional financial metrics.

• Challenge: Figure out which social media metrics can support your business objectives and be correlated to increase your ROI.

Thank you from

Tracy Panko@Spiral16

@TracyPanko

Special thanks to the organizers ofNAMA