Social Media ROI

Natalie Kortum - marketingmathgirl.com Brian Melinat - @BrianMelinat

Social Media ROI Measurement “The Good, the Bad & the Ugly”

• eMetrics Conference - Toronto • March 2012

2 2

First company to hit $1M a day in online revenue

One of the first companies to launch online

support

First to sell complex configurable items

Leader in online frictionless

commerce from order to delivery

Dell’s Online Heritage: Critical Enabler

Early adopter of social media

One of the first to launch online

discussion forums

2 Natalie Kortum & Brian Melinat

Global Marketing

January 2008 Dell aligns organization for success

August 2006 Blog outreach expanded beyond tech Support

December 2006 Ratings and reviews launched on Dell.com

July 2006 Direct2Dell launched Today Direct2Dell exists in English, Spanish, Norwegian, Japanese and Chinese.

February 2006 Michael Dell asked Why don’t we reach out and help

bloggers with tech support issues?

January 2007 StudioDell launched Dell’s video and podcast site, with helpful tips and tricks. Eventually expanding this into the YouTube channel making sharing easier.

February 2007 IdeaStorm launched A voting based site allowing customers and others to submit ideas for Dell.

June 2007 Dell joined Twitter

EmployeeStorm launched Internal Blogs Launched for Employees.

October 2007 Michael Dell quoted in Business Week In response to Jeff Jarvis question around whether companies want to be part of the online conversation: ”My argument is you absolutely do. You can learn from them. You can improve your reaction time. And you can be a better company by listening and being involved in that conversation.”

November 2007 DellShares launched The first investor relations blog by a public company.

March 2008 Accepted Solutions launched on Community Dell France begins Online Community Outreach

May 2008 Dell Outlet achieved $0.5M in sales via Twitter

April 2008 Inside IT launched Blog focused on business customers, and Cloud Computing.

June 2008 Channel blog launched

January 2009 Dell Organizes into four customer focused business units

Spring 2009 Members of Community and Conversations deployed within each of the new Dell Business units

June 2009 $2M+ Sales via Twitter

2009 Dell TechCenter

June 2009 Global Twitter revenues of $6.5 M

December 2009 Huffington Post Blog

March 2010 Dell joins Sina Weibo in China

2006 2007 2008 2009 2010 2011

Altimeter recognized Dell

with “Open Leadership Award for Innovation and

Execution”

Social Media & Community University (SMaC U) launched 5,000 team members trained by end of year

B2B pages on Facebook

Dell named the No. 1 most social brand

6 Awards for the Social Media Listening Command Center

June 2010 CAP Days launched In-person events for vocal online customers

December 2010 Social Media

Listening Command

Center launched

Over seven years of social media experience

3

2012

Natalie Kortum & Brian Melinat 3

KPIs/ Dashboards

Direct Attribution

Neural Net

Modeling

The Good

The Bad

The

Ugly

• Scorecarding/ tracking Social Media progression

• Strategic Modeling to understand Revenue impacts

4

• Comparison of Social Media to non-Social Media customers

Natalie Kortum & Brian Melinat

Easier Advanced

Global Marketing

Social Media Analytics usually start with basic tracking metrics

Social Media Analytics Phase I • Convincing the business that Social Media

participation is “valuable” or worthwhile

• Answering Exec question: “Why should we be investing in Social Media?”

• Intuitively, we know there is Business Value in:

– Engaging customers to develop relationships – Providing service/support via social channels – Listening to social for issue early detection – And more…

• As analysts, we need to provide quantified

insights

5

http://trackandfieldathletesassociation.org/blog/wp-content/uploads/2012/05/Track-Starting-Blocks.jpg

Natalie Kortum & Brian Melinat

Global Marketing

These core Social Media metrics often provide the foundation in Social Media analytics

6

Number of Fans and

Followers

Conversation Volume

Reach

Sentiment

Engagement

Traffic Delivered to Company

Website

Share of Voice

Trends Over Time

Natalie Kortum & Brian Melinat

Global Marketing

Most companies today recognize the value of Social Media and are familiar with (and likely track) the core metrics

7

http://www.business2community.com/social-media/fortune-500-companies-increase-social-media-use-0275757 *Umass Dartmouth Study:

Corporate Facebook Pages

by Industry*

Number of

Companies

w/Facebook Pages

 %

Aerospace and Defense 10/14 71%

Chemicals 9/17 53%

Commercial Banks 14/20 70%

Food Consumer Products 12/14 86%

Insurance: Property and Casualty (Stock) 11/16 69%

Motor Vehicles and Parts 7/16 44%

Specialty Retailers 25/28 89%

Telecommunications 12/15 80%

Utilities: Gas and Electric 11/22 50%

Fortune 500 332/500 66%

Corporate Twitter Accounts

by Industry*

Number of

Companies

w/Twitter

Accounts

 %

Aerospace and Defense 12/14 86%

Chemicals 13/17 76%

Commercial Banks 15/20 75%

Food Consumer Products 13/14 93%

Insurance: Property and Casualty (Stock) 13/16 81%

Motor Vehicles and Parts 7/16 44%

Specialty Retailers 24/28 86%

Telecommunications 12/15 80%

Utilities: Gas and Electric 16/22 73%

Fortune 500 365/500 73%

Natalie Kortum & Brian Melinat

Global Marketing 8 http://www.mining-technology.com/projects/platmin/platmin2.html Natalie Kortum & Brian Melinat

Global Marketing 9

Scorecard Example – Tracking Your Social Media Efforts

Consolidating data

on various core

Social Media metrics

in a regularly

reported “Scorecard”

can help a company

monitor/track its

Social Media activity.

Natalie Kortum & Brian Melinat

KPIs/ Dashboards

Direct Attribution

Neural Net

Modeling

The Good

• Easy, fast and inexpensive

• Customer-centric

The Bad • Difficult to compare with non-Social Media activity

The

Ugly • Not tied to P&L metrics

• Scorecarding/ tracking Social Media progression

• Strategic Modeling to understand Revenue impacts

10

• Comparison of Social Media to non-Social Media customers

Natalie Kortum & Brian Melinat

Easier Advanced

Not tied to P&L

Global Marketing

Question Remains: “How does this impact my P&L?”

11

“So What?”

http://www.kpua.net/images/2006hoolaulea/crowd2_full.jpg Natalie Kortum & Brian Melinat

Global Marketing 12

Social vs Non-Social

Customers

Comparing Social Media Customers with Non-Social Media Customer Can Help Quantify Social Media Value

Natalie Kortum & Brian Melinat

“Traditional” Business KPIs

Conversion Rate

Cost of Acquisition

Spend

Margin %

CLV (Customer Lifetime Value)

Etc…

Global Marketing

Example of measuring the value of a Facebook Fan

13

Facebook Fan Not Facebook Fan

Company’s Customers

$1111 $888

$1111 -$888

Incremental Value of Facebook Fan*

Annual Spend *Numbers for illustrative purposes; not actual Dell figures

$223

Natalie Kortum & Brian Melinat

Global Marketing 14

Direct Attribution has a big downfall

• Direct = All or Nothing

14 Natalie Kortum & Brian Melinat

Global Marketing 15

Direct Attribution has a big downfall

• Direct = All or Nothing

Traditionally Understated Traditionally Overstated

Social Media Coupons

Brand Campaigns Online Promotion/Referral

Events Sales

Corporate Social Responsibility Transactional Actions

15 Natalie Kortum & Brian Melinat

KPIs/ Dashboards

Direct Attribution

Neural Net

Modeling

The Good

• Easy, fast and inexpensive

• Customer-centric

• Dollarize impact • Easy to explain

The Bad • Difficult to compare with non-Social Media activity

• Overstates and Understates certain levers

The

Ugly • Not tied to P&L metrics

• Misrepresentation sometimes occurs

• Scorecarding/ tracking Social Media progression

• Strategic Modeling to understand Revenue impacts

16

• Comparison of Social Media to non-Social Media customers

Natalie Kortum & Brian Melinat

Easier Advanced

Not tied to P&L Easy to Explain

Introducing Neural Net Modeling

17 Natalie Kortum & Brian Melinat

Global Marketing

Social Media is only one of 400 variables considered.

18 Natalie Kortum & Brian Melinat

Global Marketing

Human Brain Network

19 Natalie Kortum & Brian Melinat

Direct Attribution understates the value of Social Media

$565

$223

$0

$100

$200

$300

$400

$500

$600

Neural Net Direct Attribution

• Includes “word of mouth” influence

• More than twice as large as direction attribution

Re

ven

ue

imp

ac

t p

er

fan

pe

r ye

ar

20 Natalie Kortum & Brian Melinat

*Numbers for illustrative purposes; not actual Dell figures

How does social media compare to other investment options?

Sales Marketing

Demand Gen Pricing

Marketing Brand

Marginal Return on Investment

0.9 X 1.3 X 0.4 X 2.2 X

Social Media

4.1 X

If $1 M additional were available to invest, what’s the marginal ROI?

21 Natalie Kortum & Brian Melinat

*Numbers for illustrative purposes; not actual Dell figures

Global Marketing

Neural Net: Want to calculate your program’s ROI?

Ensure you are setup to have data that can last 2+ years. • Data retention plan • Categorization that will last over the long-term • Ensure Model-ready data. (Ask your Decisions Sciences org.) • Collect costs associated with your project

Confidential 22 3/25/2013 22 Natalie Kortum & Brian Melinat

KPIs/ Dashboards

Direct Attribution

Neural Net

Modeling

The Good

• Easy, fast and inexpensive

• Customer-centric

• Dollarize impact • Easy to explain

• Considers full impact (“assists”).

• Comparison against other investments

The Bad • Difficult to compare with non-Social Media activity

• Overstates and Understates certain levers

• Requires over two years of data.

• Difficult to explain

The

Ugly • Not tied to P&L metrics

• Misrepresentation sometimes occurs

• Very time-consuming and costly

• Scorecarding/ tracking Social Media progression

• Strategic Modeling to understand Revenue impacts

23

• Comparison of Social Media to non-Social Media customers

Natalie Kortum & Brian Melinat

Easier Advanced

Not tied to P&L Easy to Explain Costly

KPIs/ Dashboards

Direct Attribution

Neural Net

Modeling

The Good

• Easy, fast and inexpensive

• Customer-centric

• Dollarize impact • Easy to explain

• Considers full impact (“assists”).

• Comparison against other investments

The Bad • Difficult to compare with non-Social Media activity

• Overstates and Understates certain levers

• Requires over two years of data.

• Difficult to explain

The

Ugly • Not tied to P&L metrics

• Misrepresentation sometimes occurs

• Very time-consuming and costly

• Scorecarding/ tracking Social Media progression

• Strategic Modeling to understand Revenue impacts

24

• Comparison of Social Media to non-Social Media customers

Natalie Kortum & Brian Melinat

Easier Advanced

Not tied to P&L Easy to Explain Costly

Global Marketing 25 Confidential 3/25/2013

Questions?

Natalie Kortum & Brian Melinat 25

Global Marketing

Introducing SNAP Social Net Advocacy Pulse

Aggregated Metric

Drill-down and Uncover insights

Targeted Listening

Natalie Kortum & Brian Melinat 26

Thank You

Natalie Kortum - marketingmathgirl.com Brian Melinat - @BrianMelinat

For more information on Dell’s Social Media Services:

Please visit: www.dell.com/socialmediaservices

Or email: [email protected] (Dir. Social Services Sales)

and/or [email protected]