PRESENTS A WEBINAR WITH
Dr. Natalie Petouhoff
UCLA Director and Professor of the Social Enterprise
Executive Education Courses and A Consultant/Analyst
@drnatalie
ARE YOUR SOCIAL MEDIA
EFFORTS WORTH THE MONEY?
Justifying the business case for
listening & engaging on social media
is a BIG question.
And executives want bottom-line
business answers.
BUT IS CALCULATING SOCIAL
MEDIA ROI EVEN POSSIBLE?
Skeptics think social media is too “fluffy” to
adequately measure return on investment (ROI)
Would you calculate the ROI of a phone?
Would you calculate the ROI of your mom?
Would you calculate ROI of your pants?
Social Media Myth #1
“Social media ROI cannot be
calculated because there are
too many unknowns…”
TRUTH IS…
Social business is still business…
…and the business of business is
increasing shareholder value.
WHAT IS ROI? A NUMERICAL
VIEW OF STRATEGY
High ROI means executive approval for
your initiative.
DOES YOUR STRATEGY INCLUDE BUSINESS FUNDAMENTALS
LIKE COST SAVINGS & REVENUE GENERATION…
If your strategy includes…
Reaching PR
objectives
faster, better,
cheaper…
Increased
awareness,
reach, relevance,
engagement…
Faster lead
generation/
increased lead
conversion rates
Better
Consumer
Insights…
Enhanced
Brand
protection…
Reduction in call
center costs/
increase in
customer revenue
Decrease in
customer churn/
inc customer
lifetime value
Social media ROI predicts if you’ll reach the goal…
Social Media Myth #2
“Would you calculate the ROI
of putting phones on every
desk in your company?
smROI doesn’t have to
calculated! ”
HMMM….
Except businesses do…
Evaluate productivity benefits vs. costs.
And also the systems needed to support the
business activities.
TRUTH IS…
There was a day when…
Secretaries answered the phones
and typed EVERYTHING for
workers.
Along came phone switches and
desktop computers…
Someone did ROI calculations for:
Getting a company-wide phone
switch and phones on every desk
top. (Ask Nortel and Avaya…)
And a computer on every desk.
And apps to get your work done -like email, word processing
programs.
Social Media Myth #3
Metrics = ROI
KNOW WHAT ROI IS AND ISN’T
Many people mistake social media data, metrics and
Key Performance Indicators (KPIs) for ROI
Metrics are used to measure: Reach, Relevance,
Shares, Likes, Engagement, Purchases
But that’s NOT ROI
COLLECT SOCIAL MEDIA DATA,
METRICS & KPIS
Website analytics and marketing automation data
help provide insight into what you’re doing right &
how you can improve.
TRUTH IS…
Metrics are the like ingredients in a good recipe.
They go into the ROI calculation,
but they aren’t the finished dish.
ROI VS. METRICS
Return on Investment
•
•
•
•
Earned Media Value vs. Marketing Spend
Lead Value vs. Marketing Spend
Brand Equity Growth vs. PR Spend
Focus group vs. Social Media Monitoring or Community
Activity Metrics
# of:
Reach Metrics
# of:
Relevance Metrics
# of:
News Releases
Media Interviews
Analyst Briefings
Blogger Engagements
Blog Posts
Video Posts
Podcasts
Web Site Page Edits
Earned Media Placements
Earned Media Impressions
Paid Media Impressions
News Release Downloads
Analyst Report Mentions
Key Message Penetration
Earned Media Share
Share of Conversation
Word of Mouth Volume
Click-Through Volume / Rate
ROI IS LIKE LOOKING AT
AN ESCHER DRAWING
It’s a complexity issue
• Traditional business goals & metrics
• Social media business goals
and metrics
• How social media affects
traditional business
THE STEPS FOR Social
Media ROI?
1.
An equation…
ROI = Benefit - Costs x 100
Costs
2.
Calculate Benefit & Costs.
They are NOT metrics.
THERE’S AN ROI
OF ANYTHING
THAT PROVIDES
VALUE
And there is an
ROI of your mom,
a phone and
wearing pants
http://www.flowtown.com/blog/what-is-the-roi-of-your-mom
WHERE ARE WE
WITH RESPECT TO BEING ABLE
TO CALCULATE ROI OF SOCIAL MEDIA?
Most marketers indicate social media measurement is a high priority &
48% feel pressure to report qualified outcomes of social media.
MARKETERS ARE UNSURE HOW TO
CALCULATE SOCIAL MEDIA ROI
Less than 20% of marketers can calculate the ROI of
Social Media
WHAT’S SHIFTING THE NEED FOR
SOCIAL MEDIA ROI?
Justifying ROI is becoming more important now that we’re in
the “third wave” of social media.
The first two phases were driven by the Innovators and Early Adopters;
they don’t need business cases to adopt something.
SOCIAL IS JUST IN SOME BRANDS’ BLOOD
Some brands forge new ground by actively making
social media part of their cultural DNA.
OTHERS WANT PROOF
BEFORE THEY TAKE THE LEAP
SOCIAL MEDIA ADOPTION HAPPENED QUICKLY
Companies jumped into social media without extensive ROI calculations
There wasn’t any real business analysis.
It happened because the boss said so, or because
a social media PR disaster could cost much more.
Examples:
ISN’T IT INTERESTING THAT A
WHOLE INDUSTRY GREW WITHOUT
CLEAR BUSINESS CASES FOR SOCIAL MEDIA?
THE EARLY MAJORITY ARE
PRAGMATISTS
They need assurances.
They dislike unpredictability.
They are hard to win over.
PRAGMATISTS OFTEN BECOME
EVANGELISTS
Get the Early Majority to see what the innovators and Early Adopters saw.
Loyal once they become “sold” on an idea.
They influence others through WOM channels,
especially the Late Majority
HOW DO WE GET STARTED DOWN THE ROAD
OF SOCIAL MEDIA ROI?
ALIGN BUSINESS GOALS WITH SOCIAL MEDIA STRATEGY
To be successful in social, you need to determine why you’re doing it and
what strategic objectives you’re trying to reach
HOW DO THOSE GOALS COMPARE TO
SOCIAL MEDIA GOALS?
Apply SMART methodology to all business objectives:
Specific
Measurable
Actionable
Realistic
Timed
THE SOCIAL MEDIA ROI EQUATION
A SOCIAL ROI EXAMPLE
Sea World San Antonio launched a social media campaign for their new
“Journey to Atlantis” ride:
• Identified top roller coaster enthusiast bloggers and
forum participants
• Shared construction videos & photos from start to finish
• Treated them like VIPs, inviting the American Coaster
Enthusiasts to be the first to ride the new coaster
THE RESULTING ROI?
BENEFIT: Using a survey and formula that applies a value to each visitor to the park,
Sea World was able to attribute more than $2.6 million in revenue from people who
heard about the ride through the Internet.
COST: The total costs for the campaign, for people, process and technology was $44,000.
ROI = 2,600,000 – 44,000 x 100 = 5809% ROI
44,000
For each dollar spent, $58.09 of value was added to the bottom line.
CALCULATING SOCIAL MEDIA ROI
IS POSSIBLE!
There isn’t one answer for how & what to
measure in social media – the metrics to
evaluate your success in social are as
unique as your business.
Prove social media efforts are providing
value to your organization by taking the
plunge and start crunching your
own numbers today.
Go forth & measure!
ADDITIONAL ROI RESOURCES
Video: How To Build a Business Case for Social Media
http://www.youtube.com/watch?v=_59iJrYanw0&feature=relmfu
Video: How To Calculate the ROI of Social Media
http://www.youtube.com/watch?v=UhUO30VRN1M&feature=relmfu
Video: How Social Media Benefits the Whole Company
http://www.youtube.com/watch?v=e1SfQaMSbH0&feature=relmfu
Ebook: ROI of Social Media: Myths, Truths & How To Measure
http://www.radian6.com/resources/library/roi-of-social-media-myths-truths-and-how-to-measure/
Infographic: ROI: Are Your Social Media Efforts Worth the Money?
http://www.radian6.com/resources/library/roi-of-social-media-infographic/
White paper: Calculating the ROI of Social Media
http://www.salesforce.com/social-crm/?lbt=/form/pdf/socialcustservice_roi.jsp&d=70130000000G5cI&lbh=600&lbw=510
PRESENTS A WEBINAR WITH
Dr. Natalie Petouhoff
UCLA Director and Professor of the Social Enterprise
Executive Education Courses and A Consultant/Analyst
@drnatalie