CAN YOU MEASURE IT?

SOCIAL MEDIA ROI

Some Definitions

Measurement – A rule for assigning numbers to objects to represent quantities of attributes.

Metrics - A system of measures that helps to quantify particular characteristics. In SEO the following are some important metrics to measure: overall traffic, search engine traffic, conversions, top traffic-driving keywords, top conversion-driving keywords, keyword rankings, etc.

ROI - Return on investment (ROI) is one way of considering profits in relation to capital invested.

ROMI - Return on marketing investment (ROMI) is the contribution attributable to marketing (net of marketing spending), divided by the marketing 'invested' or risked.

More Definitions

Brand Awareness - Brand awareness is a marketing concept that enables marketers to quantify levels and trends in consumer knowledge and awareness of a brand's existence. At the aggregate (brand) level, it refers to the proportion of consumers who know of the brand.

Brand Engagement - is the process of forming an emotional or rational attachment between a person and a brand

WOM - It is sharing information about a product, promotion, etc., between a consumer and a friend, colleague, or other acquaintance.

Turn Your Thinking Upside Down

Traditional ROI – company investment then calculating returns in terms customer response

Social Media ROI should focus on customers’ investments as they engage with the marketers brands.

So think not only short term responses like increasing sales, decreasing costs but long term returns also.

Turn Your Thinking Upside Down

Company launches a blog- $$$$$$$$

Company expects increase in sales – $$$$$$$$

What is missing is none monetary returns Maybe blog satisfies brand engagement

Not always be measured in dollars, but also in customer behaviors (consumer investments)

Not only reach and frequency (traffic, visitors, likes)

But also time spent, comments, share –wom

Developing meaningful relationships with customers takes time

What to do and What not to do

Drivers of Consumers use of social media

Connections

Creation

Consumption

Control

Second, qualitative aspects of your efforts is important such as value of a tweet about a brand

Nope Nope Nope

Most Managers think that Social Media applications as “just another” traditional marketing communications vehicle.

HUGE MISTAKE

The social media environment is largely consumer-— not marketer- — controlled.

Raging Cow

In 2003, Dr. Pepper/7UP launched a product with its Raging Cow campaign. The company enlisted a group of six teenagers and 20-somethings to post favorable reviews and spread positive word of mouth about its new flavored milk drink, without disclosing that the enlisted bloggers received incentives like product samples, T-shirts and gift certificates. On the surface, the blogs looked impartial and did not appear to be affiliated with the company or the drink, except for a few obligatory links to the Raging Cow site.

Raging Cow

But closer examination by a group of suspicious bloggers revealed that the company was behind the blogging effort. The marketing campaign wassubsequently attacked in the blogosphere.

Bloggers started a boycott, and the productdisappeared.

Raging Cow

Raging Cow

Motrin

Motrin. Johnson & Johnson’s Motrin brand launched a video campaign in 2008 targeted to“baby-wearing” mothers. This was a 45-second commercial in which the voice-over of a supposed mom talked conversationally about the burdens of wearing your baby in a body sling.

Motrin

A number of mothers were so offended by the video, which was viewed as both condescending (“Wearing your baby seems to be infashion” was the opening line of the spot) and exploitive in promoting Motrin as a cure for the back-breaking pain of baby wearing, that they took to Twitter and the blogosphere to criticize the brand in real time. Riding off the momentum of enraged tweets from baby-wearing defenders, the “Motrin Moms” debacle immediately became a top trending topic on Twitter Search.

But instead of quick damage control, Motrin did nothing. Only aftermainstream media coverage, during which countless social media experts weighed in and branded the effort with a unanimous thumbs down, did Kathy Widmer, McNeil Consumer Healthcare’s vice president of marketing, finally offer a limp apology. What’s particularly relevant here is that the bulk of these events unfolded over the course of 24 hours on a weekend.

What is Your Objective

Direct sales, direct cost reductions or increases inmarket share are desired outcomes

Social media can

improve efficiency of market research,

decrease costs for customers services

Help product development by enabling crowdsourcing etc.

…….

Social media characterstics are best for especiallythree objectives

Social Media Objectives

Awareness

Engagement

Word-of-Mouth (WOM)

Metrics

After you set your objectives you need to define yourmetrics according to your objectives

Your metrics can change according to social mediaplatforms

Metrics

Metrics

To get an ROI estimate, managers would link the social media metrics to an additional set of proxy benchmarks (e.g., the likelihood of future purchase by a user engaged with the company’s brand through a specific social media application, or the reach of a specific word-of-mouth element and subsequent conversion to future sales

Metrics - Examples

In 2007, Kellogg created an integrated digital media experience for the “Special K Challenge” translate those website interactions and click-throughs to market response over 18 months, found that the online ROI for Special K cereal was twice as large as that from television

http://my.specialk.com/mealplan/start/step1/

Metrics - Example

Vocalpoint, Procter & Gamble’s social networking site, has over 350,000 members who talk about P&G products; by linking these customer investments in brand conversation to sales, the site is credited with market response increases of up to 30%.6

http://www.vocalpoint.com/

Lets see some good examples

Brand Awareness

Lets see some good examples

Several days before Election Day 2008, Starbucks ran a spot on the “Saturday Night Live” show as well as on YouTube, promoting a free coffee giveaway.

Twitter mentions of Starbucks skyrocketed,averaging a mention every eight seconds, which translated into a sizeable increase in brand exposure

Lets see some good examples

Lets see some good examples

K-Tec’s blender brand Blendtec posted a series of humorous demonstration videos in which the company’s founder, Tom Dickson, posed the question “Will it Blend?” and then proceeded to blend iPhones, glow sticks, golf balls and many other products previously thought unblendable using his line of hardy blenders.

Lets see some good examples

Lets see some good examples

The “Will It Blend?” campaign quickly went viral and as a result saw its sales grow fivefold. The BlendTecvideos have now been viewed more than 100 milliontimes on YouTube.

Brand Engagement

Nuts About Southwest

Southwest Airlines has a blog

“Nuts About Southwest” blog with podcasts, videosand other social media tools

Visits to the new and improved blog rose by 25%,

Page views increased 40% and

Visitors stayed 26% longer on the company’swebsite.

http://www.blogsouthwest.com/

Nuts About Southwest

Gretsch Guitars

Gretsch Guitars, for its 125th anniversary, held a

contest on its MySpace page

To find the next best unsigned independent band.

900 bands entered the contest, and over 55,000 site visitors voted for their favorite bands.

By soliciting participation from both musicians and their fans, Gretsch engaged its target customer and raised awareness of the brand more broadly.

Boğaziçi Üniversitesi

Word of Mouth

Word of Mouth

Technology journalist Jeff Jarvis blogged in 2005

About the shoddy customer service he received from Dell — his own “Dell Hell”

Dell saw its customer satisfaction score drop five points in one year.

Word of Mouth

In 2009, Burger King

“Whopper Sacrifice” Facebook application

Unfriend 10 of their Facebook friends in exchange for a free sandwich.

Word of-mouth campaign resulted in members unfriending a total of 234,000 Facebook friends

http://www.youtube.com/watch?v=nelYIQUfR4E

How about profit?

How can a company improve the ROI of itssocial media campaigns?

A Seven-Step Framework for Social MediaMarketing

Step 1: Monitor the conversations By monitoring brand-related conversations firms can gain

valuable insights

monitored 825,091 conversations involving 1,736 individuals across various social networking sites

Step 2: Identify influential individuals who can spread messages Use the data to identify a pool of influential individuals (we refer to

them as “influencers”)

(1) the number of times an individual’s messages were forwarded

(2) the number of connections that those messages jumped

(3) the number of comments and replies the users received for each message

How to Listen and find influentials?

A Seven-Step Framework for Social MediaMarketing

Step 3: Identify the factors shared by influential individuals commonalities among the candidates and create profiles of typical

influencers

Customer Influence Effect (CIE) metric

1. Activeness, 2. Clout, 3. Talkativeness of the receiver,

4. Likemindedness

Step 4: Locate those potential influencers whohave interests relevant to the campaign influential social media users who are particularly interested in the

company’s category of goods and services

Stickiness Index (SI), which measures the degree of WOM generated

A Seven-Step Framework for Social MediaMarketing

Step 5: Recruit those influencers with interests relevant to the campaign to talk about the company’s product or service

Step 6: Incentivize those influencers to spreadpositive WOM about the product or service

two stages: “Creations on the Wall” and “Share Your Brownies.”

Step 7: Reap the rewards from increasinglyeffective social media campaigns “comments” and “conversations” to the financial metrics

Customer Influence Value (CIV) metric that calculates the influence

of an individual’s WOM on future sales.

Results

the total revenue generated from campaigns about 23% was attributable to conversations on Twitter

about 80% was attributable to Facebook, with a 3%to 8% overlap between the two social networks.

Overall, the campaign was a huge success: Hokey

Pokey realized increases of 49% in brand awareness,

83% in ROI and 40% in the sales revenue growthrate.

Results