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SHOW ME THE MONEY. PROVING THE VALUE OF SOCIAL MEDIA MARKETING A REQUIREMENT For the typical company, more than 8% of revenue is reinvested in marketing each year to assure that new customers and markets are acquired, existing customers remain loyal, and revenue streams continue to grow.

As customers grow more empowered via on-line resources and ecommerce, marketing becomes even more important to achieving revenue and growth goals, making it more critical than ever to get the marketing investments right.

Marketers Not Getting Respect They Deserve

However, recent studies indicate that senior executives feel these significant marketing investments are less than efficient or effective.

Ever more skeptical and frugal executives are asking serious questions as to whether marketing investments are paying off. A decided lack of confidence in marketing exists amongst C-level executives.

Executives are seeking accountability, questioning whether marketing is meeting goals, such as:

Driving revenue growth? Increasing customer retention and loyalty? Improving brand image and sentiment? Increasing competitive advantage? Operating efficiently, generating expected benefits from incremental investments?

Often the answers to these critical questions are not available, leading to the current crisis in confidence.

Quantifying how marketing is meeting goals and driving business contribution is crucial, yet most marketers fall short on expected accountability requirements. This is clearly illustrated in a VisionEdge / Marketo study, where CEOs were asked how well their marketing departments were doing in managing their budgets and delivering on business goals, with 67% of the CEOs gave their marketing departments a B or C – mostly because of issues in accountability.

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As a marketer, you know that your campaigns are delivering good results, and that additional investments could generate big rewards. So how can you remove the skepticism and gain the respect you deserve from senior executives?

According to Forrester, the answer is economic justification – with over 75% agreeing or strongly agreeing that their “ability to track marketing ROI gives marketing more respect.”

Proving Value of Social Media Marketing No Exception

Many marketing executives are convinced that the future of marketing relies on social media, and as a result, investments in social media marketing are quickly growing. In fact, when asked how important social media marketing is to future success, 87% of marketers indicated that social media was “important” or “very important” to achieving their biggest marketing goal this year, this according to Mashable.

With so much importance being placed on social media marketing, it is no wonder that it is the fastest growing budget line item, with AMA/Duke reporting that social media marketing has carved out a 9.9% allocation of current marketing spend, with an expected doubling to 17.7% over the next 5 years.

In the near term, the investment growth in social media marketing is expected to be dramatic, with MarketingSherpa reporting that more than two-thirds of organizations expected to increase their social media marketing investments overall, and 25% expected to increase spending on social marketing by at least 20 percent. However, the growth is in doubt, with many marketers and senior executives growing concerned that social media marketing is not delivering on expectations. Is the burgeoning crisis in social marketing confidence resulting from a lack of success, or from a lack of accountability?

For the more skeptical organizations, MarketingSherpa reports that the chief concerns constraining more social media marketing spending is:

Determining where the budget should come from / trade-offs with other marketing investments

Inability to track the success of social media marketing campaigns Uncertainty about the return on investment (ROI) How to reallocate the required human resources to support social media

marketing programs.

With such a new and rapidly advancing marketing vehicle, these questions are not unusual, and not too different than the questions that revolved around the Internet in 1996. The marketers that are able to answer these questions are

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more likely to get the necessary investments to stay ahead of the innovation wave, and more importantly, the competition.

Measuring ROI Critical to Social Media Marketing Growth and Investments

Being able to prove the ROI of social media marketing is vital in order to maintain credibility, and gather the needed financial support for this business critical investment.

In a survey of 140 social strategists by Altimeter, accountability reigns supreme, with respondents indicating that the greatest challenge for increasing investments and driving social and digital marketing success is “Measurement and ROI” (42%).

As a result, the top priority indicated for 2011 is Creating ROI Measurements (48%).

ROI Measurement is Vital, But Remains a Challenge

Although social media marketing is a top priority and critical for future success, marketers struggle with ROI measurement of social campaigns, as a result, constraining or threatening all important future funding.

Surveys report that even though ROI measurement is vital to success, that:

Some 75% of B2B social marketers currently not measuring the ROI of social initiatives (MarketingProfs) Almost two-thirds of companies (61%) indicating their organizations are “poor” (34%) or “very poor” (27%) at

measuring return on investment from social media. (E-consultancy survey of 400 companies, Jan 2010)

Most marketers want to be social ROI savvy, but are currently not able to advance beyond traditional activity measurements to tally the competitive and financial value/bottom-line impact of social marketing programs.

Measurements such as website site traffic, the number of followers / fans / subscribers, SEO ranking, posts and mentions are currently being used to determine whether social marketing efforts are delivering results. Although important measurements, these activities do not translate to competitive advantage, or bottom-line business impact, so crucial in convincing c-level executives that current programs are working, and even more should be allocated to these essential initiatives.

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These activity based metrics, such as tracking fans / followers, site traffic and posts are best used to help social strategists and community managers drive more successful campaigns, but do little to convince marketing and C-level executives that investments in social media marketing programs are valuable.

Clearly, different stakeholders require different types of success reporting – moving beyond activity tracking to assure that the social marketing programs are driving incremental sales and loyalty, mitigating business risks, improving marketing and business efficiency, and driving competitive brand and financial advantages.

But moving beyond activity to communicate the metrics that matter to executives can be difficult:

The Buyer’s Journey is non-linear / complex making attribution of tangible benefits to social marketing and specific campaigns difficult:

38 different marketing vehicles and growing

An average of 7.6 different marketing sources are used throughout the purchase decision (Forrester 2011)

Multiple marketing / sales touches per sale making attribution difficult

Long time frame for most businesses / transactions make it easy to lose track of the value chain

Financial benefits include revenue, but the benefits of social marketing go beyond just that one success measure to include marketing efficiency improvements, customer loyalty, support cost reductions, and the benefits of collaborative innovation

Social marketing benefits go beyond just tangible financial quantification and need to include risk management & brand improvements

The method and metrics used to calculate these benefits can differ dramatically based on the industry and business model

Information on competitive social advantages is often vital to success, particularly where developing and maintaining an innovative lead is so key, but the metrics are often difficult to gather, compare and maintain

Multiple groups, stakeholders & systems make integrating and summarizing information difficult.

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Compete Insights™

As a new medium, social media marketing success is best measured by how the company has leveraged these new channels to gain an innovative, sustainable lead, and assuring that this lead is translating into a positive financial and business impact.

Measuring, monitoring and optimizing social media marketing competitive advantage is critical for success. And as we have discussed, proving this advantage and how it translates into quantifiable business benefits is critical for accountability - overcoming executive scrutiny and securing the investments needed to support plans and goals.

A platform to automatically and regularly gather and report on how social media marketing campaigns are besting competitors’ efforts, delivering superior benefits, and driving key executive performance indicators metrics can help marketers prove the ROI of social efforts to skeptical executives, and improve future investments and results.

To address this need, Akonna has developed Compete Insights™, the first SaaS application that quickly and easily measures and monitors social marketing performance versus competitors, calculating how marketing’s efforts are currently out-performing or lagging named competitors. The tool is designed to answer key questions such as:

How do our social media marketing efforts compare?

How are we translating these efforts into tangible value compared to the competition?

If current trends continue or are improved, how will our efforts compare in the future?

Measurements, analysis and reporting is conducted to

Highlight both short term gains and longer term benefits, as well as quantifying financially tangible and intangible gains,

Prove and improve how social marketing is driving engagement, financial gains, risk management and brand advantage.

The Compete Insights platform uses a comparative dashboard model to create a complete picture of social media marketing performance. The model advances beyond basic activity measurements such as number of fans / followers, to tally both the short and long term impacts of social marketing efforts, as well as quantifying the direct bottom-line tangible impacts, and more indirect / less tangible impacts. In this manner, the team view evolves from just following short term gains towards a more balanced approach, including a longer term valuation of social marketing programs.

The Compete Insights platform takes daily measurements of marketing’s performance, and the relative performance of the competition. These benchmark results are then tallied across all the dimensions of the ROI Dashboard into executive reports to compare performance over the

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past month, quarter, year or longer. Company and competitor news and events are correlated with the performance to highlight cause and effect.

Using trending and simulation, future performance is estimated to illuminate how much the organization is gaining, or falling behind in engagement, financial, risk and brand.

Looking at each measure, the Akonna Compete Insights platform measures competitive performance and ROI as follows:

Engagement Engagement measures and compares the reach, activity and involvement of the community for the marketing organization and named competitors.

The comparative engagement benchmarks in Compete Insights include:

Level of Engagement – compared to the potential reach of marketing programs, the level to which the community is active

Impressions – quantifying the number of impressions the marketing organization generated Reach – a tally of the number of followers, fans and connections Marketing Activity – the number of posts from the company / marketing team Community Activity – the number of retweets, posts and mentions from the community

Financial Financial quantification of social efforts is essential for resolving the “crisis in confidence”, maintaining current funding, and securing important future spending increases.

Compete Insights quantifies the absolute and comparative value for the following:

Financial Index (Total Value Derived) – the total derived value of social marketing including revenue / margin, marketing equivalence savings, risk mitigation and brand improvement value

Revenue / Margin – the revenue / margin contribution from social marketing efforts Marketing Equivalence – the marketing savings using social marketing versus other marketing alternatives Risk Mitigation Financial Impact – the estimated value of risk mitigation efforts Brand Improvements Financial Impact – the estimated value of brand improvements via social marketing

efforts

Risk Social channels can be used to identify and mitigate risks sooner and more effectively, such as addressing negative reviews, product issues and customer complaints. The ability of the organization to use social media for these purposes represents a clear advantage.

Comparative risk performance is measured, monitored and improved using Compete Insights to quantify:

Risk Index – the negative mentions for the brand versus the total brand mentions Risk Mitigation Activity – the level of direct activity to help mitigate / reduce risks Negative Sentiment – the number of negative brand mentions

Brand Measuring social marketing performance should go beyond just the short term and tangible financial measures, to assure that efforts are driving long term advances and advantages, especially towards improving brand performance.

Brand advantage is measured in Compete Insights, comparing the company versus competitors using:

Brand Passion – the positive mentions of the brand compared to all mentions for the brand

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Share of Conversation – the overall mentions of the brand compared to all mentions for the company and competitive brands

Positive Sentiment – the number of positive brand mentions Brand Mentions – the number of all brand mentions, both positive and negative

Social Benjamins™ To summarize the competitive advantages or shortfall for busy senior executives, Compete Insights tallies an overall score to summing the engagement, financial value, risk mitigation and brand equity into a single index, called Social Benjamins.

Value for Marketers

Ever more skeptical and frugal executives demand that marketers be more accountable, evolving from “Mad Men” to “Math Men”.

Compete Insights provides the executive reports needed to prove and improve competitive advantage and ROI:

Prove and Improve Social Marketing Success Quantify benchmarks versus competitors and leaders to verify leadership, gather additional investments /

improvements and assure future success Track social success for nearer term gains (Engagement & Financial) as well as longer term benefits

(Risk Mitigation & Brand Management) Measure the more financially tangible benefits as well as the intangible (more difficult to quantify

financially, but equally important to deriving / proving value) Drive and manage competitive advantage on a continuous basis

Meet Accountability Challenges Evolve beyond typical marketing activity metrics to the financial and comparative performance indicators

executives understand / expect Quantify the derived business value and competitive advantage to skeptical / frugal executives and other

stakeholders Automatically deliver performance reports on a regular basis to promote continuous support / investment

growth Secure Continued Investment and Growth Funding

Quantify the value of current social investments Predict future performance and the value derived Justify historical spending and future allocations with quantified competitive benchmarks and ROI

comparisons

Value for Agencies

The ability for agencies to prove the ROI of their social media marketing services is critical for maintaining and growing existing accounts, and differentiating to win new business.

Competitive benchmarking, including an analysis of financial gains, engagement, risk mitigation and brand management provides the tool agencies need for proactive competitive and economic justification for their client social initiatives:

Provocatively Engage and Convert Prospects • Connect and engage prospects with proactive benchmark analysis reports • Quantify competitive and ROI issues with current social efforts - the “cost of doing nothing” • Implement provocative selling, creating priority / urgency

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Quantify Value of Campaigns to Current Customers • Prove the value of agency driven social marketing campaigns to current marketer / executive customers • Tally the exact competitive advantage and ROI derived

Drive More Business with Existing Accounts

• Improve up sell / cross-sell, highlighting where additional investments are needed • Justify using the ROI and competitive advantage that incremental investments can deliver • Provide regular performance report cards to prove the value of continued and incremental investments in

agency efforts.

Next Steps

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©2011 Akonna, Social Benjamins and Compete Insights are trademarks of Akonna, Inc., in the United States. All other brands, products or service names are or may be trademarks, registered trademarks or service marks of, and used to identify, products or services of their respective owners. For more information, please visit www.akonna.com, or call 1-855-4-Akonna For the latest news on Akonna, Social Benjamins and Compete Insights visit

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