ROI of Social Media

MEASURING THE ROI OF SOCIAL MEDIA

Agenda

• Why should we care about ROI? • Social Media ROI today • Better ways to measure ROI? • Class Exercise

Why is ROI important?

•  If you can’t measure it, you can’t manage it.

•  “82% of marketers say their executive management expects every campaign to be measured.”

(source: ifbyphone 2011 State of Marketing Measurement Report)

• Marketing budgets are correlated to ROI.

Social Media ROI Today: What’s so hard about it?

“ROI intrinsically implies that you want to take out more than you put in. Social Media is about freely sharing with no strings attached. It’s a paradoxical relationship...”!" " " "- Rob Kozinets, Jan 11, 2012!

ROI = company gets more than company gives

≠ sharing freely = Social Media

Social Media ROI Today: The Stats

• Measuring ROI was the leading challenge for Social Media Marketers in 2010 & 2011.

Social Media ROI Today: Quotable Notables

Social Media ROI Today: Current Metrics

Source: The ROI of Social Media, MDG Advertising

Social Media ROI Today: The big “But”

Bu!. . . • Short term vs. long term

• Quantitative benefits vs. qualitative benefits

Turn your thinking upside down Tr

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2010

Company Returns = Customer Investments (behaviors + $)

Customer Behaviors Key Marketing Objectives Key Marketing Objectives 1) Awareness, 2) Engagement, 3) WOM

ROI= (new sales) or (cost savings) investment

ROI= (new fans) x (leap of faith) investment

Problem: short term & incomplete. Problem: blatant ignorance

Determine your Objectives

•  Know what you want out of a campaign before you try to measure it.

Key Marketing Objectives

From Fuzzy to Quantifiable Metrics

• Measure early • Measure often • Measure everything

Source: Hoffman & Fodor, 2010

Measurement Tools Available

Estimating Metric Values • Primary research (consumer panels, surveys) •  Traditional media benchmarks • Historical performance

Case: Danone Facebook Campaign

• What was the marketing objective?

• What metrics would you use to measure it?

• How would you try to measure ROI?

http://www.youtube.com/watch?v=R7F4zQWWaVs

Appendices

Relevant Metrics – Hoffman & Fodor